What to do if your answer isn't one of CFA guideline answers

An example from a previous actual CFA paper asking about why the Endowment has a high risk Tol.

I list 2 reasons:

Long perpetual time horizon

Endowment does not have legally defined/contractual obligations

Institute does not list the second point yet I know it is true having seen it in so many other mocks. In this case, if it was not in the guideline’s for the marker, would he still accept this as an answer? And for self marking, how are you doing this when you write an answer you are sure is relevant but not in the guidelines.


nothing you can do really.

sure you can try to defend your answers or accuse the guidelines as being incorrect/incomplete but really, what are the odds you’ll succeed.

for self-marking, be as harsh as possible and follow the guideline. anything you wrote missing out of the guideline is a missed point and anything extra you wrote that is not in the guideline is not extra point.

cfa exam is not a democratic system, I’m afraid.

Unless there is something specifically in the CBoK, I have to go with Edbert on this one.

Are you referring to Question 1B. i.) of CFA 2016 Essay?

Then maybe a little bit OT, but I always wondered: would an answer like “Long perpetual time horizon” be enough to get full credit or should we add also for example “…allowing time to make up for poor short-term investment returns.”

What I have seen doing mock is that I have the feeling of writing to much sometimes, because I just don’t know if saying for example “long time horizon” would be enough…

@Taytus Long perpetual TH would not be enough no.

As the Fitch instructors say, whenever you write an answer, always ask youself - “so what?” - spell it out for the graders. Above I was just shorterning it for the purpose of the question above.

In the exam you will need to say something like this:

Long perpetual time horizon (so what?) - This allows the portfolio greater time to recover from losses. Therefore, the portfolio can endure more volatility.

On occasion I’ve had candidates I’m tutoring give answers that I think are perfectly valid, but which are not included in the CFA Institute guideline answers. I’ve written CFA Institute to ask if they would have gotten credit for those answers, and the replies have generally been that they would have.

So . . . you’re not quite so out of luck as people might suggest.