April 2010 q8

[ProCyclist]

So the question is quite a big one (14 marks) and reads as follows:

Describe the effect of, and the stress and scenario tests that can be used to
understand and assess the impact of, each of the following events on a
portfolio of insured motor, property and creditor business in a particular
country:
(a) An unusually large windstorm and flood event which impacts an entire
country.
(b) A deep recession which impacts a country’s economy.

But I simply cannot get the link between the question and the examiners answers. The explanation in the ASET isn't too clear to me either.

The answer are just "impacts" to the product classes as a result of the events and have nothing to do with stress or scenario testing. It's almost as if the question should read

Describe the impact of, each of the following events on a portfolio of insured motor, property and creditor business in a particular country:
(a) An unusually large windstorm and flood event which impacts an entire
country.
(b) A deep recession which impacts a country’s economy.

Anyone able to explain to me how I should read the question?

Thanks!

 

[Darren Michaels]

Hi there

This part of the question is asking you to do two things:

1. Describe the effect of the events listed on the insured portfolio

and

2. Describe the stress and scenario tests that can be used to understand and assess the impact of these events on the portfolio.

 

[WTang]

Hi there

This part of the question is asking you to do two things:

1. Describe the effect of the events listed on the insured portfolio

and

2. Describe the stress and scenario tests that can be used to understand and assess the impact of these events on the portfolio.

Hi Darren, I also find the way they ask this question very confusing/ misleading. It is easy to say what they are looking for after looking at the question but it was not so obvious.

From looking at the examiners comment, we know that a lot of candidates focused on describing the tests. I did the same when I tried this question because the question reads "describe the effect of, and the stress and scenario test...", which made me think I better describe stress tests...etc
However the answer did not mention any detail description of any tests. It looks like student would have scored nearly full mark by just talking about the different risks which I did not expect based on the way the question is written. This would have caused my problem in the exam.

Do you have any advice for us on how to deal with ambiguous question wordings?

Many thanks
W

 

[Darren Michaels]

To improve your understanding of what the examiners are looking for based on the wording of each question and the number of marks available, I would recommend that you look through as many past exam questions as possible (eg 20 years). You don't necessarily have to attempt the questions but you could look at the question wording and the detail required in the solution.

Also don't forget the document on the Institute website "Command verbs used in IFoA Associate and Fellowship written examinations" which gives you guidance on what the examiners are looking for based on the verb used in the question.