To those who who took the CFA provided Mock... careless, anything, provided, afternoon

mouse123

What did you guys think difficulty-wise? I can honestly admit that my confidence has taken a bit of a hit, but I am not too upset because alot of the mistakes were careless rather than not knowing the concepts (I scored a 68, which is lower than most of my previous results)

Some Questions

1) Question 1 on the afternoon session really angered me. I know C is the best answer, but after reading it about 10 times, I still don't see anything wrong with B.

2) Question 6 on the afternoon session. First of all, I don't see how he referenced the program incorrectly, maybe saying level II. But more importantly, shouldn't 'not lying to my employer' fall under duties to employer?!?!

3) Question 16 on the afternoon session. Ok I officially don't understand referencing data at all. When can we do it? If he references statistic data from the World Bank, is that not something that is widely available and therefore does not need to be referenced?? I was once told that unless you are referencing a stock price, or LIBOR, or some actual widely used quote, reference everything?

4) Question 72 on the afternoon session. I guessed and got it right, but why do we use the 10y treasury as the risk free rate rather than the 3month Tbill?

It's crunch time, good luck to all of you.

Finalnub

Re: Your #4. Because it relfects expected inflation, it is a proxy for: nominal RFR = real RFR + E(I))

sdada

Gooner are you off ASF?

Bulla564

I took a few days to take and analyze the mock and I conclude:
1. it is impossible to get less then 50% if you at least read through readings. They have questions that are too easy to get wrong.
2. I believe people shouldn't worry about the mock score since in my opinion they made it hard because of what happened such low scores on last exams. They deliberate designed mock with the notion that people will learn from mistakes made on mock.
3. People should also stand back and view the questions from a test makers point of view. Some of the questions were so simple that I was actually questioning the correct answer like wtf it can't be this easy and thus actually picked the incorrect answer thinking they were trying to trick me.
4. They are questions that the designed to humble you. I honestly doubt the exam is going to be as hard as the mock.



Edited 1 time(s). Last edit at Monday, May 24, 2010 at 08:08PM by timotimo.

MythosHF

I had the same question as your question #4. I don't remember reading to use the 10 yr Bond as the Risk free rate and from a risk standpoint, using a 3 month Treasury makes more sense.

Is this a black and white rule to use the 10 yr bond as risk free rate every time?

Thanks. These small details are tough!

hariRaj

3-month T-Bill rate is used in Investments...but 10-yr T-Bill rate is always in Corporate Finance i.e. capital budgeting....(which longer term investment decisions are made)

The reason being it doesn't suffer from the roll-over risk that would exist from the 3-month rate!

waldziuchna

3-month T-Bill rate is used in Investments (short term investing e.g. money market)...
but 10-yr T-Bill rate is always in Corporate Finance i.e. capital budgeting....(which longer term investment decisions are made)

The reason being it doesn't suffer from the roll-over risk that would exist from the 3-month rate!

ftwcfa

I apologize, I shouldn't have said "always"
Correct me if I'm wrong, but also if given the projects time frame, you should attempt to match the appropriate maturity...30 year project should use a 30 year T-Bond as the RFR...

evolsteevol

Thanks for clarification!!

JoeyDVivre

hey there,
i spent the last day going over these same questions. what is great about the mock exam answer key is that they give you the corresponding pages in the cfa books to reference....

for question 1 afternoon...answer C is correct because even though newton disclosed to clients that only after a month they can receive of a hot issue or new security that doesn't make it right. the key is the disclosure of inequitable allocation methods. I spent about 20 minutes tearing my hair out on this and the key is on the second to last line.. "this policy is disclosed to all existing and potenial clients". If you see any question on the exam on June 5th that says anything about disclosure...just remember that disclosure doesn't obsolve you from unfairly allocating shares. you can review this on page 55 in the cfa book...paragraph above recommended procedures for compliance

question 6 afternoon....totally agree. i would hope that during the review process of grading the exams the CFA institute would see that answer is totally misleading and throw that question out.

question 16... after reviewing all 3 answers, that is the only one that fits the criteria. obviously schulmberger didn't violate misconduct..and record retention is only needed for giving investment advice for securities. when taking this question, i thought it was easy to get the info off the web (even though he didn't provide the reference on his research report) and wouldn't constitute a violation of record retention. lucky guess on that one

question 72...(actually 73) see page 52 in Corp Finance CFA book...its in the paragraph before example 7

a wise man once told me.....the devil is in the details!! CFA institute will be sure to test that on June 5th. EFF THE MAN!!!