September 2006, Paper 1, Question 7

[selkirk]

In the current Mini-ASET, at the end of April 2012, Paper 1, Question 4, it suggests looking at (among others) September 2006, Paper 1, Question 7.

I had a long look at this question before concluding that I don't know how to answer it. I looked at the Examiners’ Report and I still don't know how to answer it. Am I missing something, or has the syllabus changed?

 

[Katherine Young]

Hi Selkirk,

This is still examinable.

Part (i) asks for the features required of the model. This is standard bookwork and is examined regularly so you must make sure you learn it. The only unusual twist is that you need to apply it to the details of this question; a little more tricky but you should have a stab at it.

Part (ii) is more difficult.

Try asking yourself the following questions:

Why would you want to use a different model for each purpose? What will be different in each case?

Why would you want to use a different basis for each purpose?

Think about different components of the model, and why they might ideally be different for each purpose, eg the time horizon, the choice of assets, the cashflows to be modelled, the level of prudence needed for the assumptions, the amount of data required etc.

I do agree that this is a hard question (and in fact the examiners said so as well). However, it is entirely possible that next week you are faced with other hard questions which you don't know how to answer too. Therefore it's good practice for you to persevere with this one.

Good luck!

Kind regards,

Katherine.

 

[justine otieno]

Hi Selkirk,
However, it is entirely possible that next week you are faced with other hard questions which you don't know how to answer too. Therefore it's good practice for you to persevere with this one.

CA1 is quite a difficult exams, especially the wordings that the examiners use in the questions and how they interpret the words. There are time when the examiners give a high level answer yet the question has a lot of marks, there are times when they give too many details and it leaves you wondering which way to go.

Another issue is the marks available, in the Q&A I have seen half marks, does that mean that every point I generate is half a mark?? And how many points would be required given that in some questions you can generate very many points (answers)??

 

[Katherine Young]

Hi Justine,

It's pretty much always half a mark per point. So if you have a 10 mark question say, you know you need to think of twenty ideas.

Kind regards,

Katherine.

 

[justine otieno]

That's so discouraging! Anyway, I guess that means that pretty everything one writes is always right provided it answers the question.

 

[Jimmy white]

I guess that means that pretty everything one writes is always right provided it answers the question.

I don't think that's the case. The examiners have only a little bit of scope to add marks for anything not on the schedule but relevant to the question, so if half of the points you are making are not on the schedule I wouldn't expect a lot of marks for them, even though they might actualy be relevant to the question asked. For example, in a "describe" question, marks can be given to elaborate on a specific point. If you elaborate on a different point instead of the one the examioner chose as being most relevant, then although the points you make might also be relevant, I doubt you'd pick up marks for it if that level of detail is not on the schedule. It's very tricky.

Most of the discretion is used for questions which could have a wide range of answers e.g. questions like "give examples of...". From my understanding, most questions in the exam have some but not much wiggle room to pick up marks that are not on the schedule.

 

[Katherine Young]

That's right Jimmy.

On the plus side though, there are many more points on the schedule than are needed for full marks. It wouldn't be unusual to have say over 150 possible marks to pick from.

Good luck for this week!

Kind regards,

Katherine.

 

[selkirk]

Thanks for the reply Katherine.