Where is the online explanation key for the PM session?
Assuming I still have 3 full practice exams left, I am getting the vibe I should just pass on the time/$50???
Schweser Mock Exam - PM Exam ID: 7072172 Questions: 60 Points Possible: 60 Points Correct: 44 Score: 73% Will take AM tomorrow.
Does anybody know whether there is a performance tracker for the AM session? I can see one only for the PM.
Honestly speaking it was rather easy. Scored 70 on PM, while average result in PM was 67 (ethics 2 and behavioral killed me). So everyone are very close. Somehow i even felt some sense of security, that i could pass. But this sense is false and even dangerous. I expect real exam to be much more harder. So forget your S mock results and back to books.
Ethics2 - 2/6 Behavioral Finance - 3/6 Attribution - 3/6 Overall: 16 incorrect, score 73%
Question on the Asset Allocation item set, the last one in the PM… question 56… I feel as though comment 1 should be correct… Correlations do increase when periods of volatility increase, and this means that at the time you need diversification most it fails the investor… schwesers explanation says: Statement #1 is incorrect. Correlations between markets do appear to increase when volatility increases in international markets. However, this has been shown to be primarily a statistical aberration related to the calculations of standard deviations and correlations. I understand that it may be a statistical aberration, however the comment is still correct in that higher volatility increases correlation which hurts someone who is trying to diversify… anyone else feel that way about this question? typical schweser with these questions
I feel it is incorrect
what do you say is incorrect about the statement?
about the question
Went to the venue for this exam , I think this one was well rounded AM session: 70.5% PM session- 75%
That correlation in volatility question got me too , I thought that statement is correct and I recollect on this forum Char-Lee discussed it in detail . Anyone has a better explanation.? International Market Correlation Posted by: Char-Lee (IP Logged) Date: February 15, 2010 07:53AM Has anyone else recognized the seemingly contradictory comments in Schweser vs CFAI text on this topic? CFAI Vol 3 page 249 Asset Allocation When investing in international assets, investors should consider the following special issues: INCREASED CORRELATIONS IN TIME OF STRESS. Investors should be aware that correlations across international markets tend to increase in times of market breaks or crashes (footnote 27) Then footnote 27 goes on to say: Increased market volatility during such times will by itself tend to produce upwardly biased estimated correlations; after correcting for that bias, however, EVIDENCE REMAINS THAT CORRELATIONS INCREASE DURING TIMES OF STRESS. Then the Schweser Material Book2 Reading #27 page 209: In addition to correlations increasing over time, correlations between markets appear to increase when volatility increases in international markets… The problem with estimating correlation during periods of rising volatility is that the calculation will be biased upwards when in fact it has NOT CHANGED… ACADEMIC RESEARCH HAS FOUND THAT THE PREVIOUSLY REPORTED INCREASES IN CORRELATION DURING VOLATILE STOCK MARKETS WERE, FOR THE MOST PART, MANIFESTATIONS OF HIGHER VOLATILITY AND NOT INCREASES IN THE TRUE CORRELATIONS. So which one is it? By default I side with CFAI of course, but it seems too sloppy of Schweser to have miss the final point about correlations still increasing even after adjusting for statistical biases. That’s why I’m suspicious. Options: Reply To This Message•Quote This Message Re: International Market Correlation Posted by: CardShark (IP Logged) Date: February 15, 2010 09:18AM It’s called correlation breakdown. I believe Schweser is correct…but for the test CFAI is always correct. Options: Reply To This Message•Quote This Message Re: International Market Correlation Posted by: bballcoasty (IP Logged) Date: February 15, 2010 09:30AM It’s an academic vs. pragmatic difference. Acadmically speaking, one cannot segment the data by “high volatility” time periods and run a simple regression to determine a new correlation, that would be a clear example of data mining. The CFAI material does go on to say that researchers have made statistical corrections to high volatility periods to adjust for data mining effects, and determined that claims of higher correlations in those periods are not valid. Practically speaking, though, markets do move more in tandem from macroglobal shocks and it’s hard to argue with the higher correlations, even if it is “normal” to have periods of above/below average correlations. Options: Reply To This Message•Quote This Message Re: International Market Correlation Posted by: hiredguns1 (IP Logged) Date: February 15, 2010 10:47AM Agreed. I was expecting to see this tested in 2009 because the topic came up several times. My understanding of the bottom line on this argument is that correlations do increase during market turmoil, but not as much as the correlation measure itself would suggest and not enough to negate the benefits of international diversification. Options: Reply To This Message•Quote This Message Re: International Market Correlation Posted by: Char-Lee (IP Logged) Date: February 15, 2010 11:10AM yes! 131 pages later on pg 380 CFAI does go on to say the correlation is a statistical aberration and not necessarily due to a change in true correlation… it would have helped if the follow up was on , say, the next page… not 131 pages later… typical CFAI. thanks for the input as well you two Options: Reply To This Message•Quote This Message Re: International Market Correlation Posted by: Char-Lee (IP Logged) Date: February 15, 2010 11:11AM make that you three (hiredguns1 as well)
i agree with you. too many calculation questions. cfa exams are always more conceptual. the suggestions for part marks are incorrect as well. for the return object and calculation, cfa would like give 12 marks like in the 2009 exam. 4 marks for object and 8 for return. and if your return is not correct, they will give you lots of part marks. the question of the bank threw me off,never seem something like that. i highly doubt they would ask a questions on bank,but you never know.
afjunkie, that question on the bank is right in the CFA text… Volume 2 page 430… I dont remember schweser covering it in that much detail at all, so I was shocked that they had an entire question on it… That is why I am completely reading the CFAI text for IPS individual and institutional… it is an absolute must… as well as doing all EOC questions for these two sections…
thanks for the tip! yeah schweser did not cover it very well. i agree that its worthwhile reading the cfai text for these sections, just in case they throw something in like this.
As I promised, I went there and took the entire live session. I think I like it, or I should say it worth the money. The mock has everything I expected. Closed road. Cannot find place to park, so have to park illegally and get a ticket. Arrived late and sit right in the middle of row 1. Got distraction from the guy next to me. You name it. Good experience. Now back to the exam, I believe it is well designed. Slightly easier than P1 (especially exam 1), about the same as P2. Light calculation. With something I completely don’t know, such as the commercial bank’s objectives. I am shooting for 70%. In the past 2 years I always have completely blank parts. The return question got me. I spent 45 minutes on the 16 min question. (In total I spent 2 hours and 10 minutes in the morning.) And I still didn’t get full credit. For those who said return is not important, I just checked all AM sessions from 2000-2009. Except in 2008 Individual Port return was 8 min and 2005 was 10, the rest 8 years were all 12-13 min. I think it is a very good question, incorp with multi-year cashflow, tax, existing portfolio return, charitable contribution and inflation. Comparing curriculum of this year and last year, I think the requirement for port return is indeed slightly heavier. I am expecting a 15 minute question in the real exam. How many points to allocate “grow the port in a real term and meet living expenses”. If I am the grader, I will not allocate even 1 point on it. It is automatic that everyone put it down and it applies to almost all this type of questions. How I can diff you from all others? Anyway, in my test center I did meet a guy got the question completely right. Hats off to him. I did bad for the 2 tax questions. Screwed up with the formulas again. 
I was tired at the end of AM session and rushed out for coffee. When I just walked out, I realized I forgot to discount the cashflow for the couple in their 90s.
Some concerns on SchweserMock-PM Q7 - Ethics - Where was it said that S&P500 was company’s standard benchmark? Q9 - Ethics - hmm, nice. Threating is permitted by C&S. Ethics - So apparently, it looks like you can call up a client and discuss with him about the ‘upcoming’ IPO and promise him to give him pro-rated allocation. Wonder why that’s not a unfair treatment to other clients? Q29. Futures market have Low margin requirements than cash markets - is it? Q53. Why is this not (active)SCG? Q56. Statement-1: Taken at face value - it’s absolutely correct. (We are supposed to assume we do not imply/interpret any information not given in the vignette.)
totally with you on some of those… it is a joke that she did not violate anything by threatening someone like that… and question 56 i think is a terrible answer by schweser as well… that statement is 100% correct… we are supposed to answer whether that statement is correct or not, not think about the reasons why the correlation may go up… i got a 5 of those 6 questions wrong that you talk about… and i think at least 9 and 56 my answer should be correct…