Grading the final exam Question 1 a: if they give 1/df instead of df but do calculation correctly then give 3 points, if they used the wrong kind of rate but did the calculation correctly then mark off ½ give two points if they have interpreted the df as PV/par even if they haven’t gotten PV correct. b) if they used a standard formula using a financial calculator then give 3 points… Give two points if they have laid out the problem but not had time to do it. Subtracet a point from b&c in total if they have laid out the bond incorrectly but did the calculations correctly. c) If they interpreted the interest rates incorrectly but did the problem correctly otherwise then give full credit. Give 2 points if they showed they knew how to answer the question but didn’t have time to put numbers in. If they laid out the problem correctly with numbersand didn’t calculate an answer give 3.5 d) give some credit for working through the right logic (2 points?). Give 2 points for setting up the problem correctly, another point for adding in cashflows but making a mistake somewhere, 3 points if they messed up only on the cashflows but set up correctly… e) be careful as the answers are slightly different. On version B the last rate is unchanged and thus the rates have all gone up slightly. Therefore the price goes down. In the other version the last rate went down a lot and therefore the price goes up. Question 2 Credit default swaps is a reasonable answer D&e) If answered with Maiden Lane III then 1 point. Question 3 if they just switched some of the rates buys and sells then subtract 1. If they get the right idea but wrong execution +2. Question 4 a) 2 points for correct formula incorrectly executed c) -0.5 for not having supply be vertical but otherwise correct answer, -1 for coming up with the wrong supply/demand but the correct answer Question 5 lose ½ point if not recognizing trader B buys the other 2K shares, lose 1 point if not executing A and C correctly (only executes if touched). Give 4 points if everything executed as a market order.
Grading the final exam Question 1 a: if they give 1/df instead of df but do calculation correctly then give 3 points, if they used the wrong kind of rate but did the calculation correctly then mark off ½ give two points if they have interpreted the df as PV/par even if they haven’t gotten PV correct. b) if they used a standard formula using a financial calculator then give 3 points… Give two points if they have laid out the problem but not had time to do it. Subtracet a point from b&c in total if they have laid out the bond incorrectly but did the calculations correctly. c) If they interpreted the interest rates incorrectly but did the problem correctly otherwise then give full credit. Give 2 points if they showed they knew how to answer the question but didn’t have time to put numbers in. If they laid out the problem correctly with numbersand didn’t calculate an answer give 3.5 d) give some credit for working through the right logic (2 points?). Give 2 points for setting up the problem correctly, another point for adding in cashflows but making a mistake somewhere, 3 points if they messed up only on the cashflows but set up correctly… e) be careful as the answers are slightly different. On version B the last rate is unchanged and thus the rates have all gone up slightly. Therefore the price goes down. In the other version the last rate went down a lot and therefore the price goes up. Question 2 Credit default swaps is a reasonable answer D&e) If answered with Maiden Lane III then 1 point. Question 3 if they just switched some of the rates buys and sells then subtract 1. If they get the right idea but wrong execution +2. Question 4 a) 2 points for correct formula incorrectly executed c) -0.5 for not having supply be vertical but otherwise correct answer, -1 for coming up with the wrong supply/demand but the correct answer Question 5 lose ½ point if not recognizing trader B buys the other 2K shares, lose 1 point if not executing A and C correctly (only executes if touched). Give 4 points if everything executed as a market order.
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