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I had a similar experience to awogbod2 and tekka.
It took me three attempts, and the thing that made the difference was classroom tuition with Gamel Taher, via a residential course at Reed Business School. Gamel is brilliant. I also found the residential aspect hugely beneficial, as you don’t have think about anything except study.
It’s a weird paper. I think the syllabus content is (mainly) really interesting and relevant in pretty much any organisation. There is however a huge volume of information you are supposed to be able to recall and apply as required under time pressure.
The knowledge phase of the course took three days. We covered the whole syllabus in that time however I don’t think it would have been enough on its own. I did a lot of reading outside the classroom.
It was a small class and there was plenty of time for discussion, like a seminar group.
Assuming you have the right level of knowledge in the first place, you need to be clearly instructed by the examiner as to what you’re supposed to be doing with it.
Gamel taught us how to interpret the question and plan an answer in response, broken down into points to make and a time allocation for each point.
There is a pattern to the wording of the questions that becomes apparent with enough practice.
I find it very difficult to make myself answer practice questions in simulated exam questions. We did loads in the classroom, including a full mock, where there was no choice. That made a big difference for me, both in terms of technique and confidence.
Gamel taught us a number of things that can make the difference between 45 and 50 eg:
– How to get all the professional marks in Q1.
– 1 page of writing is worth an average of 5 marks
– A page of a passing script will typically contain 5 or 6 short paragraphs, with a blank line in between each paragraph
– A marker will read an answer to a 25 mark question in 5-10 minutes. Try to make it easy for them to spot where to give you marks.
– Candidates tend to score marks much more efficiently in the time it’s supposed to take to write an answer, ie for a ten mark question you’re likely to score 5 or 6 in 18 minutes or 7 or 8 in 30 minutes.So it’s important to stick to time for every element of every question, and to move on even if you have more to say
– Pay attention to the marking scheme in practice questions
– Being aware that there are often marks available for any relevant point if it’s well constructed.
– You don’t have to answer the questions in order. If Q2 and Q3 examine subjects you are strong in, you might as well do these first and approach Q1 with 25-30 marks already in the bag.
– Use the reading time at your own discretion. It’s fine, for example, to allocate your time at 50, 50 and 100 minutes and to start writing as soon as you’ve done your first answer planIn the exam I panicked and most of the above technique fell apart for me, but I still blundered through with a score of 54. I reckon 45-50 of my marks came from questions 1 and 2 . Question 3 was a bodged, rushed mess.
Why do you think the marks don’t count?
@osamasyed123 said:
Passed i dont think the marks count am a bit dissappointed but still passed i think i didnt do enough past exams pratice?Apologies for posting the same question three times. I forgot about the ‘quote’ button.
Q1: FCF valuation of acquisition (behavioural factors for overvalued high-tech companies, PER of business unit, CAPM -> WACC, strategic aspects, financing factors)
Q2: currency hedges (rationale for policy and for communication of policy, recommend between fwd/futures/contracts, impact of open futures position under different settlement prices)
Q3: investment appraisal (NPV, expected values, usefulness of capital investment monitoring + post-completion audit)
My comments:
This was my 4th time sitting. Thought it was a fair test The requirements were clear and the information not excessive.
Usual grumbles re extreme time pressure. I tend to go over time on the calculations.
Liked the way the requirements followed the same order that information was presented in the case text. Liked the way the information you needed to use from the case text in the calculations wasn’t jumbled.
Approached it Q3, Q2, Q1, allowing 2 mins per mark and starting to write more or less straight away. Works for me.
Did OK on Q1, good on Q3 and badly on Q2. Didn’t practice FX techniques enough. If it had been an equivalent exercise about interest rate risk I would have passed. Hey ho.
Don’t mind sitting it again – getting better at it each time. Bit anxious about the CBE testing however. It sounds, and looks, like the resources they’ve come up with are harder to work with than pen and paper.
Q1:
Cost centre vs profit centre required some form of mental gymnastics that escaped me on this occasion. Wrote some words. Found it hard to imagine how you would run a treasury department as a profit centre, as you wouldn’t expect it to generate income as such, based on my understanding of what a treasury department does.
Multilateral netting – did well. Nice way to ease into the calcs, providing you know how to do it. Had to use my driving licence as a ruler, having forgotten my ruler. that was a bit annoying.
MMH – Wrote an answer that made some sense, but probably got the borrowing and depositing the wrong way round.
FX futures – had to think about the best way to trend the futures price, having forgotten the method. Think what i did made sense.
Recommendation favoured the futures.
Interest rate FRA – Easy. Nothing to do except choose the right one.
Interest rate options – All the questions I had done previously required calculation of diminishing basis, whereas on this one they did it for you. Whilst that made it easier, it actually threw me a bit. I suppose one gets used to following a method. I think I did it OK, although the APR it came out with were quite high.
Recommendation was the FRA.
Bank offering OTC options to protect against delta and gamma risk – don’t know much about delta and gamma beyond the basics of what they represent, so made a few informed guesses based on that.
Last bit about the cost/benefit of risk management from the perspective of diversified investor – ran out of time, didn’t do it. Thought 90 minutes of writing time had passed, which they had.
Felt OK at this point, like I’d probably scored around half marks so far., evn without doing the last bit. Got confused about time because the exam started at 10.15. Decided I was actually 15 minutes behind. Things went downhill from here onwards.
Q2:
NPV was OK. Ended up with +1.25. Forgot how to do the sensitivity analysis but had a go. 8% was in there somewhere. Think I got the VAR calculation right.
Missed out part b to save time. Can’t remember what it was about.
Part c was about questioning the CEO’s opinions about strategic options, and it not being worth considering their value. Wrote some OK points.
Time realigned itself in my mind. Entered Q3 with 43 minutes left. Felt things were getting away from me but maybe a chance remained…
Q3:
No chance remained.
First bit about forecasting cash effect of restructure looked like it should be easy, and was only worth 2 marks, so should be done in less than 6 minutes I suppose. It took me about 20 minutes I think. Too much information to process in that time, and it was hard to assign a sensible value to the 10% improvement in operating profit for restaurants that will stay open.
Made a forecast balance sheet that didn’t balance. No time to assess whether they would breach covenants.
Wrote some words in the last bit about whether the arrangement would be acceptable to providers of finance.
Overall, I found it quite frustrating.
Point of interest re Q3:
Newimber and Poynins must be based on Newtimber and Poynings in East Sussex, UK.
See https://goo.gl/maps/pxgc78yryZV1f1aA6
I live nearby, and go walking around there, so it was nice to see them on the question paper.
The downside was that I kept referring to the companies by the village names, and kept having to go back to the question text to check which letter I was supposed to miss out. I would lose my flow, find it again and then realise that it didn’t matter, all in the space of a couple of seconds. This happened like 8 times.
I thought the paper was OK, but required some non existent thinking time.
I did Q3, Q2, Q1 and spent about an hour on each.
So obviously I didn’t finish it. Missed out points ii and iii of the report.
I reckon I got between 45 and 50, and would be pleasantly surprised to pass.
Q3.
a) Evaluate the likelihood of failure as suggested by the application of Argenti’s A Score.
Or words to that effect.
This was straightforward. They gave us the overall score of 47 ie over 25 and therefore bad.
The defects and mistakes were obvious and I had a lot to say about them. Autocratic CEO, unusually high operating gearing, entering a new area of business without the necessary expertise, potential failure of a large project.
There was less to say about symptoms. Declining morale and staff leaving was all there was to go on really.
b) Suggest changes to performance management systems in order to address the defects and mistakes
I thought this was quite hard to answer. On reflection, much of what I wrote was about what they should do to rectify the situation, as opposed to how performance management systems would need to be adjusted.
I said they should pay close attention to cash flow, as businesses fail when they run out of cash.
I wrote something about project management, as it was lacking.
I wrote something about adjusting employee targets to make sure the housing project was completed to time and within budget.
It might have been easier if the scenario had said what the existing performance management systems are designed to measure.
c) Evaluate the usefulness of qualitative models in predicting corporate failure
I wrote some fairly generic stuff about the pros and cons of Argenti’s model compared with Altman’s Z score.
As an aside, do you think it’s a coincidence that one is called the A score, and one is called the Z score?
Q1
i) Evaluate the presentation of the report and the measures in use.
Or words to that effect.
I had a lot more to say about the presentation than the measures. It was a good report – informative but still concise, easy to read, well laid out etc.
I thought it was interesting that the measures went some way beyond measurement of performance against the mission. It was like a balanced scorecard report without the headings to distinguish between different perspectives.
I think I said the report was fit for its purpose. The mission itself was a bit lacking – become the biggest clothing retailer and deliver exceptional value to shareholders. It’s brief. I felt the measures were adequate for measuring performance against it.
ii) Suggest and justify 3 more measures to address key performance issues, using the data in appendix 1
I suppose the key issues were that shareholders were disappointed with declining dividends and that market share was slipping (4th largest to 5th).
I didn’t have measures to suggest in relation those concerns. I suggested they should be looking at measures of efficiency. I suggested 3 measures like revenue/ number of stores.
I think what i wrote was justified but I was starting to panic at this point. Probably missed a few easy marks.
iii) Advice about the use of value chain analysis in simplifying the supply chain
Or something like that. There wasn’t a lot of information about what they wanted to do with the analysis. Uncertainty about what the question meant made me panic further.
I took the supply chain reference to mean an assessment of how well supplier processes integrate with Chiven’s, and suggested some ways this might be improved.
iv) Discuss the development of big data and explain some risks and systems implications
Pretty fair question, and kind of them to put the three Vs in the scenario.
I gave a decent answer, explained what each term meant but should probably have related it back to the company a bit more, ie what use could they make of the information.
– Professional marks, up to 4.
I learnt this time round that you can get these by:
– writing report at the top
– providing to/ from/ date/ subject
– writing an introduction and heading it ‘Introduction’
– using headings for each new section.I did all those things so would like to think I got all 4 marks.
I thought it was a fair paper, although the wording was a little confusing in places.
Mine was a third time resit, following a three year break.
I was a lot better prepared this time round but still struggled. I panicked a bit and made some pretty basic errors in time management.
Overall, I’d be more surprised to fail than to pass, but the paper I wrote was pretty borderline.
Reflections on individual questions to follow.
Pass: 58!
Magnificent. I thought I’d failed – I was so tired in the days leading up to the paper I could barely string a sentence together in the exam. I was well prepared though – knowing the standards, good at consolidating and up to date on the current issue that was examined.
So I guess the marker must have seen through my rubbish answers and recognised that I’d done the work. I don’t know, Whatever. Happy days.
