April 2008 - The Northern Rock Exam

Does anyone else agree that there were aot of questions linked to the NR crisis last year?

 

I thought Q1 applied to Northern Rock.

I thought it was a very difficult paper, with Q3 being the worst question for me.

It also felt very CT2 orientated to me !

Also, did anyone talk about behavioural finance in Q6, or did I get that completely wrong!!

 

For non-UK students like me, wouldn't have thought about NR! So i found Qn1 to be tough.

Agree the exam is very difficult (is it only us?), especially so if u compare with 2007 papers. Even though the 2005 and 2006 papers were hard, at least there were straightforward bookwork and performance attribution calculations. I think the only easy bookwork was on the self regulation? Maybe PER but then again, it had to be applied.

Qn 3 was tough and nope, didn't use Behavioural Finance for Qn6. Was really vague wasn't it? I used speculation of option. Anyway, I didn't really understand what the question wanted by describing the exposure with banks.

 

I had a small feeling that there was theme common to some questions - maybe it was NR (of course being a non-UK student I have no idea about anything about NR's story)

I used Behavioural Finance for the one where the investor didnt sell the bad share. I guess that was Q6? I did it only because I had absolutely nothing else to say and I had "crammed" BF just before the exam. Better something than nothing. However I think it would have been very difficult to think about using BF there. I did wonder if I was writing rubbish, but perhaps that was what they were looking for, seeing how other people used it as well.

Rightly or wrongly, the ST5 papers do seem to have questions requiring CA1 knowledge. May be a bit unfair but that seems to be a trend.

I was hoping for an attribution question (which used to come quite frequently) or a valuation question (which never came before). (I think a risk seeking student may do well ignoring the middle chapters completely.)

 

Yup, come to think of it, behavioural finance could be right, but that part was only a few marks? I wrote some crap for that... he didn't sell share cos he had already made such a loss that he is hoping to recoup the losses if share price increase again/he believe share price has reached bottom low/ he wasn't able to get a good deal for the sale. "Cheating" by using the question.

 

They(Acted) do recommend that you write down the absolutely obvious. Who knows you may have picked up a mark.

 

Results

So how did everyone do? Luckily I passed, 2nd time!

 

Yep - I passed. Wrote all about relevant Behavioural Finance bits in the question discussed above. So relieved to have got it!

 

I've also passed and am very relieved to have passed first time.