Co delat? What do we do?

Scores on Midterm < = < y < = < y < = < y < = < y < = 802 > 802

Scores on Question 1

Scores on Question 2

Scores on Question 4

Scores on Question 5

Potential Causes for Poor Performance Unexpected questions Lack of proper preparation Lack of problem solving skills

Unexpected questions? The Evidence: Quote from FAQ One media article-based question on Firm Objectives (Chapter 2). One question on present values (material from Chapter 3); however, this material could be part of another question as well. One question from Chapter 4, which, very likely, will be on the capitalization of R&D and the capitalization of lease payments, as well as the modifications to operating earnings due to these computations (p. 90 and 91). (I will not ask any questions on Statement of Cash Flows, or on the financial ratios.)

Unexpected questions? The Evidence: Quote from FAQ (Cont ’ d.) One quantitative question on the computation of portfolio mean returns and variances, and on the computation of covariances and standard deviations of returns, from scenarios. One question on risk and return, including related topics such as diversification, the CAPM, etc. This question may be media article-based and/or quantitative.

Unexpected questions? The Evidence: Format of Exam One question on Firm Objectives (Media Article based) One question on Diversification (Media Article based) One question on covariance computation One question on capitalization of lease expenses One question on present value computation

Potential Causes for Poor Performance Unexpected questions Lack of proper preparation Lack of problem solving skills

Unexpected Questions? The Conclusion Unlikely!

Lack of Proper Preparation The Evidence I announced that there would be a question similar to Q. 3, and the question was straightforward. On Q. 3, I gave 20 points for saying pretty much anything that made some sense. Yet, 8 students out of 23 got 20 points or less on Q. 3

Lack of Proper Preparation The Evidence Subpart (a) on Question 1 only required you to know the definition of covariance Subpart (c) required you to know when beta would be used to measure risk, and when standard deviation, something that we emphasized time and again in class, and went to the heart of the entire discussion of risk. I gave 5 points for answers that made minimal sense. Yet, 14 out of 23 students got 20 or less out of 30

Potential Causes for Poor Performance Unexpected questions Lack of proper preparation Lack of problem solving skills

Lack of Proper Preparation The Conclusion Very, very likely, for at least half of the students in class.

Lack of Problem Solving Skills The Evidence The basics of Q. 4, i.e. present value, should be known to everybody. Subquestion (a) was direct I was very liberal in awarding points. Nevertheless, 16 out of 22 students got 13 points or or less.

Lack of Problem Solving Skills The Evidence The first part of Question 3 (capitalizing operating lease expenses) was straightforward; the only “ complication ” was that there was a lot of additional information. Yet, only two students attempted it. One student complained that we had not done balance sheets – Also specifically question with balance sheet, etc. Never even was mentioned in class of were told how to do.

Potential Causes for Poor Performance Unexpected questions Lack of proper preparation Lack of problem solving skills

Lack of Problem Solving Skills The Conclusion Clearly, a problem for most of the students in class.

What then must you do? Work harder on assigned material Come prepared to class, and ask questions. Talk less in class. Come see me after class with questions. Participate more on WebBoard.

What must I do? Be more willing to field questions. Do more problems in class. Give more problem assignments. Other?

How you can help me Tell me what specifically is difficult for you. Follow it up with specific suggestions as to what I can do to help you. Show me that you mean it by doing the things that I am asking you to do.