SILLY mistakes when you did the mock/ CFA AM

Post your silly mistakes when you did the mock/ CFA AM… This helps remind you not to do the same thing on June 06! We can’t afford to lose these points!

I misread the “least likely” as “most likely” two times in one CFA pm mock… from marginal pass to band 9…

two most common I do is

as you mentioned sometimes ignore least likely or most likely

annualize or unannulize returns/ std dev or rates etc. i tend to forget these

2010 AM - Read “corridor widths set at +/- 10% of the target allocation” as meaning take the target allocation and add or subtract 10%. So I made the corridor of a 40% SAA target weight 30-50%, instead of 36-44% and got the question wrong.

Better now than next Saturday, though!

^ I did the same thing, wct.

^ me too!

Well we will all have that issue covered if it shows up next Saturday!

For the “least likely”/“most likely” issue, I like to read all of the questions for the item set or case first. If it says “least likely” I circle the words “least likely.” If it says “most likely,” I underline “most likely.” Helps to set them apart when going back through and actually answering the questions.

2009 AM Question 1.

Forgot to scale up the living expenses for tax (when withdrawn from the account). IIRC the question stated withdrawals are taxed at some %.

Made that same mistake on the rebalancing question

Good idea! Thanks for sharing.

Guilty. Not reading everything 100% - mistake numero uno

For me, not reading the entire question and missing some piece of important information. I make this mistake at least once every AM and PM session

I think too much about a problem and do not trust my gut feeling (e.g., when it comes to ethics questions).



  • Did the hedged return question without consider investment time horizon…

  • Forgot to add management fee in liquidity needs.

  • Misread. Foreign-currency should mean the return of foreign asset measured in local currency. Domestic-currency return should mean R_FC + R_FX.

  • Misread the based currency. CFA convention: Price currency/ Base currency.

  • Forgot min buy option value is 0.

  • The value of covered call need to include underlying.

the most common mistakes I do are

  1. not read throughly and answer the question wrong

  2. make up my own answer because i don’t know it and pretend to read it as something I know or want so I can answer it haha

Which hedged return question ?

I gave up on trying to understanding this so I am planning to just memorize it cold:

Difference between Multiple Immunization and Cash Flow Matching:

  1. Cash flow matching has low return assumptions on short-term cash, potentially high cash balances; Multiple immunization is fully invested at the remaining horizon duration

  2. For Cash flow matching, funds must be available on/before date liability is due, with low reinvestment return assumptions; Multiple immunization just needs to meet the target date of each liability, and funding is done through rebalancing.

I have no idea what any of that means, haha, but I don’t think CFAI graders do either, since they just repeat more or less verbatim from the curriculum. High-5.

2014 CFA AM Q7C

You need fees for required return, but in liquidity? Never seen it there…

Yes, otherwise, who pays the management fee?