Does anyone else ever do this with quantitative questions?

example, correct, because, original, multiple

I’m not sure if this is a trick, or I’ve just been lucky, but a lot of times I don’t even do the quantitative questions because based on the answers I know which one is correct. For example, if CFA is asking for EAR on a loan, and it gives you the original term rate (LIBOR +X) and the call option that is purchased (Strike at Y) and then the final ending rate at option expiration (Z) the multiple choice will usually be:
A) Z
B) New Number not mentioned in problem set at all
C) LIBOR+X
If the option strike Y is lower than the ending rate, Z, then I know the answer is B. Likewise if the option is out of the money, then the EAR will just be close to the LIBOR+X, or C. It might be slightly higher if the premium is super high on the option but you get my point. Does anyone else do this? Is this luck or just a benifiting from understanding what the answer should look like?

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OmarAdnan

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2^#

发表于 2013-4-19 21:31 | 只看该作者

I do something similar, before I even begin my calc I try to eliminate a number that looks wrong. That said, I always end up doing the calc as a check.

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thisisbrianly

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3^#

发表于 2013-4-19 21:33 | 只看该作者

I do that as a last resort only… and I guess wrong 66.66% of the time. I think it is nearly impossible to game their answers. They are rarely as simple to eliminate like you mentioned, but I am curious to hear more about your strategy if it actually does work and you are not just exhibiting representative bias - sample size neglect.

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leadcfa