AFM*** P4 December 2014 Exam was.. Instant Poll and comments ***

@angelkay said: I felt like I was fighting a world war! My head went completely blank after reading Q1, I can still feel that headache. Now I feel like it was a waste taking time off from work to do all this studying. Worked hard and it doesn't seem to be paying off...sometimes it easier to be a bum! I feel like giving up but I know its not in me to give up.

Yes i felt the same. And the annoying thing is - i genuinely feel like i understand most of the syllabus quite well (revision/mock/past papers completed relatively well) which is why its demoralising hitting a q1 that had enough variables and different calculations... But then theyre not even very clear nor follow the pattern of info we are used to recieving eg not providing the standard deviation. I went home and looked at the work ive done... I couldve done more past papers and still would be nowhere near a pass

@williams1977 said: but in the above you have not used gordons growth model, and it sounds like a lot of people used that way to calculate the MV of Fugae co

the retained rate b = 1- 77...% (distributed rate) r = 11% so g=br. then you can use growth model

@gabrielacomann said: I am taking P5 too, now.... Hope to be better than q4. The MV for debt was indeed 102.4 something

I pasaed p5 in the last sitting and it is a godsend compared to this. It was a strangely nice paper to sit - it was tough and tested you hard, but it is very fair

Regarding the standard deviation, if its a case you were not given one, I just made up one. They don't expect you to get the thing correct, they are just looking for the application of the knowledge. I doubt if anyone got it right but if you can demostrate your method you will get the majority of the marks if indeed it is correct. They will have to mark part c easily.

They publish an article in Technical Article section and expect us to be ready with that only piece of information as an example, am sure both bpp,kaplan, and any other text do not have a examples of expected values method of decision tree to derive an NPV, it was too much to understand in limited amount of time and also increasing level of complications, I don't think this is a strategy for ACCA to generate revenue, Its really hard earned money + hard work + not socializing with family and friends to pass this paper and all in vain. Imagine ACCA conducting 4 sessions in a year and with this difficulty level...! Can some one pass our messages to ACCA.

@eyelash said: Yes i felt the same. And the annoying thing is - i genuinely feel like i understand most of the syllabus quite well (revision/mock/past papers completed relatively well) which is why its demoralising hitting a q1 that had enough variables and different calculations... But then theyre not even very clear nor follow the pattern of info we are used to recieving eg not providing the standard deviation. I went home and looked at the work ive done... I couldve done more past papers and still would be nowhere near a pass

Totally agree. I think I understand the paper quite well, did quite good practice (last 6 exams + pilot + about 15 questions but I still did not know how to tackle Q1. Just wrote down all the workings that I thought they might luckily appear in the examiner's answer.

I decided to do section B questions first and managed to get 3&4 done to what I hope is a satisfactory standard. I didn't have time for, I think, 3c relating to legal risks so i skipped it and moved on to question 1 with 90mins left. Question 1 - wowza what a nightmare. The question was closely related to one of acca's technical articles --> https://www.accaglobal.com/uk/en/student/acca-qual-student-journey/qual-resource/acca-qualification/p4/technical-articles/conditional-probability.html I didn't manage to finish the assessment of the project with the offer to sell the project after year 1 however I'm pretty sure that this was not a real option question. A lot of people will disagree with me on this but if you read the article linked to above it shows how to assess an offer to sell using probability adjusted cash flows (you look at the probability adjusted present value of cash flows after year 1 and then compare this value to selling the project - the article explains this much better than me). There was no standard deviation in the question so there was no way to calculate the value of a real option. As I said though I didn't do any better as I didn't finish the last 2 parts of Q1 (which will also have cost me at least 3/4 professional marks and caused me to fail I'm fairly certain). My issue is not the difficulty of the question, it's the time constraint. I really struggle to see why ACCA papers, particularly at the professional level, are so time pressured?! Surely examining someone's ability to sit and think through a problem is more valuable than assessing how quickly than can get a semi-sensible scatter of relevant numbers down. Giving more time would improve the quality of answers, ensuring that candidates are assessed on what they know rather than how quick they can work. Surely it's better for an individidual to work a little slower but work in a neat methodical manner providing sensible logical and useful advice for the given scenario. No doubt a reduction in time pressure would also make the markers job easier as well because answers could be presented better. Even before this I was considering writing to acca to get an understanding of why we are given a tight time constraint, I don't see much value in it. If candidates have the knowledge but it takes them longer to get it down then I think they deserve to pass, there should not be a punishment for being a slow writer or for being having a bit more thinking time. In the real world it is a much bigger error to steam in to your work and make mistakes than to stop and take a few minutes to really consider what you need to do and how best to present it. This reality should be reflected in the ACCA exams. Super frustrating to know more than you have time to write. I'd like to know what others think on this. AJ

Well at least I'm not alone here. I think Q4 was put in there with some easy ratio/trend analysis to make up for Q1 which was really hard. Remember ACCA request feedback on the sitting (via e_mail). If everyone responds stating how tough and at times unfair the paper was it may have some bearing on the marking.

I wonder how much practice I must put in to finish all three questions in P4. Prior to this exam I had not failed a paper in my entire student life more than once. Today was third attempt on P4. Question 1 was very complex. Most likely I will have to retake. Hopefully more practice is what is required

It's reassuring to hear so many brothers and sisters suffering the plight of P4 Dec 14 with me. Was solidly getting over 50% on exam attempts at home, studying for 4 months with little life to speak of and then hit with that car crash of a first question (and I literally felt like I had been hit by a car!) Can anyone explain something to me: the average pass mark for this paper historically is in the mid 30s and even the 20s according to the ACCA website. What does that even mean? Does that mean they had to mark people up who got that far below 50??? I'm going to need a hefty mark up on this as I realistically scored between 30 and 40. What an absolute nightmare!!! Need to start going to classes to learn how to do it with extreme hand crippling and brain ratcheting speed!

This is the first time ever that I am seeing the technical article on decision tree. Gobsmacked!

Can anyone remember the marking scheme for questions 1, 2 and 4? Agree with everyone's comments - q1 was awful. I muddled through and managed the bsm and put option. I knew the answer was wrong so I substitued some numbers, hope it gets me some scores. I also hope the discursive elements get me somewhere.

Andy ^^^^^ I thought it meant that only 30% of people who sit the exam pass is that not right?

With all what I have done in preparing this exam today has given me peace not to prepare again!!! Am just disturbed that the examer can't even time himself on what information to put and its all about speedy. Was killing myself were am I not getting it right on the last course yet I wrote all others without challenges and now the last one is stopping me to see my end. I now have comfort from what you have experienced but surely something has to be done for a fair exam. Q1 had all scattered information and as if it was enough many requirements to calculate options, CF, probabilities, tricky beta and valuations whole lot of stories. Moderation should be very generous but looks like acca is enjoying that suffering of us am tired not sure what to do red the book from cover to cover and what was in all the questions all gud but too much information to do a decent solution in the time allocated. Q1 looks it was worth 75-80 markes alone to finish all.

I think in question 1,examiner want us to calculate CONDITIONAL PROBABILITY OF NPV(very similar to Article on Conditional Probability),where we should decision tree and all.....but,I was totally stuck and completely blank,If this is the situation after lots of hardships on this paper,theres no hope that any future papers will make difference to my attempts.

my class teacher told me the last examiner was quite intelligent and had a vast knowledge while setting a question ....but this new examiner is *STUPID* and he dont have the scope of setting a real difficult exam ....and guess what he proved everyone wrong this is the most terrible exam i have ever experienced ....i had now idea what he actually wanted me to do how he wanted me to do ...He knows all over the world lots of different nationalities are sitting this exam then why use the word (multiple of FCF) 2 seats behind me was a girl and i heard the invigilator asking her why aint u attending the exam to which she replied ..." its not do-able and i laughed that atleast she had the courage to say the fact . i studies so hard yet i feel like i wont pass ...aims of EU oh comeonnnnnn .... if any acca personel visit this site kindly pass on this message to examiner ...if u cant stay happy try not to spoil others mood .. Nutshell : worst paper set

Ashetray: Of course yeah that would make a lot more sense! God that question 1 has ruined my rational thinking process. Should be studying for P5 on Thursday but that question has made me feel like my brain cells have been violated! Demoralisation doesn't even cover it

@andyrenouf said: It's reassuring to hear so many brothers and sisters suffering the plight of P4 Dec 14 with me. Was solidly getting over 50% on exam attempts at home, studying for 4 months with little life to speak of and then hit with that car crash of a first question (and I literally felt like I had been hit by a car!) Can anyone explain something to me: the average pass mark for this paper historically is in the mid 30s and even the 20s according to the ACCA website. What does that even mean? Does that mean they had to mark people up who got that far below 50??? I'm going to need a hefty mark up on this as I realistically scored between 30 and 40. What an absolute nightmare!!! Need to start going to classes to learn how to do it with extreme hand crippling and brain ratcheting speed!

Andy doesn't this mean that only 30% of people who sit the exam pass?

Best of luck andy :-) Have an evening off and hit the books again tomo :-)

I never got time off work to study and from the comments I am reading, it seems I am not any worse off. I do believe the examiners would cut Us some slack in the paper. there were too many variables so it's quite easy to muddle things up. Q1 - Attempted only the Probability based NPV & the degearing and gearing bit. Am sure I messed up the figures but hope to get marks for trying at least Q2 - IRS swaps was straight forward but had a bit of twist, settled for a put option (initially thought it was call) but didn't get to analyse if this was better than a swap. the listing of the basis risk across the months was a further confusion Q3 - Only did the IRR - 16%, messed up the MIRR computation and couldn't attempt the VAR - i did write out the formula before they called time. Let's hope the examiners are a little more lenient, one would be a genius to attempt at least 70% of this exam within the allotted time.

OK so , does ACCA use any kind of percentile system which effectively reduces the pass rate to a adjusted exam difficulty level , say a pass at 45 or 43 ? Of course when they read all the scripts which might be below par, they would have to pass people on a lower percentage or else i see the pass rate for this session significantly dropping to early twenties which might be the worst ever pass rate for p4 . Also i heard is some where that there is some sort of quota of maintaining the pass rates so that might be the underlying variable to adjust the percentile.So lets hope that there are not those geniuses who fill up that quota and the rest of us talking here are, well left talking ! Now to the value of option to sell , even though the S.D was not given and that technical article mentioned before does kind of tell us that BSOP was not to be used. I still believe that as business valuation are not an exact science but an art . For all those who applied BSOP to any extent would get credit according to their efficacy of application.

Lucifer himself.

U calculate the total of the proxy company first..... Then u calculate the component beta In this exam ....should have been Tb=luxury bata + non-luxury beta

@esoluyemo said: Key differences are: Salam Contract i) Not standardised ii) Not traded on Exchange iii) Risk of default very high iv) It is an over-the-counter transaction

I said there are no fixed contract amounts is this correct?

Well, I cant resist not to write a few words about this exam. I have taken 2 weeks off purly for practicing the whole book and doing every single practice kit question including the 50 markers, so was hopping to come back from exam confident, but what a mess! This examiner is a disaster!!! I hope he reads this note and realise. Test us on knowledge, not your native trickly slang words put in between the text and you expect the students to read your mind and figure out what you mean!!! In Q1 I have missed to realise the need to cacluate options, I did think about it, but than i said, if options were requried than there maybe some indication of volitality. I just did not realise the proabilities were indication for the strategic options! The requirement stated was keeping students confused, what is wrong in being a bit more clear in your expectations? This paper (Q1) been a disaster and it has confused most of students. Other questions were fairly okay, but like me many other students got trapped with reslovling the big mystry of Q1 first which left us hardly any time for other questions! ACCA is certainly not after testing knowledge, rather they are testing you on how well do you guess the the full sentence when only one word of a sentence is quoted and how fast can you write.. As students we will have a chance to convey our concerns in next survey, so lets remember to do that. I think its fair to expect a fair amount of guidance from the examiner and being a student does not mean they can through anything at you as they want, even though its not fair! I certainly see I was not the only one confused about the Q1 and if that was the examiners intention than i guess objective well acheived Mr. Examiner! For next sitting I will make sure I take some scrabble training so I can become an accountant!!!

Exam was definitely unfair. I am sure the best accountants in the world would not be able to do Q1 within 90 minutes. It is impossible especially with all the little tricks. And I would love to know if anyone got the 4 professional marks. with the time limit it is impossible to write a report in a structural way, how can the examiner expect this? I think we should start a petition against the examiner for the unfair test of our knowledge with given time limit. I will start a petition forum on Open Tuition if people are interested. We have all worked very hard for this!!!

Entered the exam with all bases covered but was definitely cooked after p7 previous day so this is moot! HOWEVER, overall I felt it was a very unfair paper.a) Q1 was poorly worded and some of the terms used were untypical of syllabus eg FCFE times b) the probability theory was hardly covered at all in my syllabus notes.c) Q2 was confusing, for example the basis on the option future and the fixed/floating choice on the swap. Throw this in with the existing time preessure and it just makes it very difficult. This is my first time sitting this paper and key lesson is do Q1 last. I couldnt really make any decent attempt at Q1 butstill spent a large chunk thinking Iit through. When you're in this position in an exam its demoralising. Did Q2 but didnt have time to consider a collar, just the cap. Q3 was fine. I really like this paper, its the best course on the ACCA syllabus by a mile but I think this examiner needs to think and make an effort to give students a fairer. The simple things are all wrong!!

@ashetray said: Can anyone remember the marking scheme for questions 1, 2 and 4? Agree with everyone's comments - q1 was awful. I muddled through and managed the bsm and put option. I knew the answer was wrong so I substitued some numbers, hope it gets me some scores. I also hope the discursive elements get me somewhere.

1a) 7, b)5 Ci) 10, ii) 18 iii) I guess wud b 10 Sorry can't remember fr 2 n 4

See you p4 in June 2015... I honestly felt i was prepared enough???? But i didnt know how to do question 1 at all... Stuck for 30mins thinking and moved on... and i wondered why am i even wasting 3 hours of my time doing a paper which i would surely fail......

This morning it suddenly strike me.. Expected NPV.. To get standard deviation is it to get sq root of varience.. Then can apply to bsop in valuation of put option? *shake head*