I think that most of us have experienced the fact that, on a daily basis, we are swamped by increasing amounts of information related to our professional lives.  As a result, we develop coping strategies such as “data surfing” to quickly assess if certain information should be retained and, if so, determine why it is important and what its potential impact might be on our daily business activity.

Data surfing helps us in this daily information screening effort by quickly reducing information to a manageable number of “data bites”.  Usually it works pretty well for us but it does have a dark side when data surfing is applied to CTP exam questions, because you might misinterpret what the question is asking.  Therefore, it is absolutely necessary to “drill down” into the exam questions and carefully dissect them to determine what the question is asking.

Here’s a few “questions” you should ask of an exam question to help you to clarify what it is asking:

1)      Does the question contain TMI (too much information)? 

Some questions might contain information that is related to the question but is not pertinent to determining the correct answer.

2)      What calculation am I being asked to perform? 

Some calculations in the BOK have a spin off calculation such as with Days Sales Outstanding where Days Past Due is a spin off of DSO.

Some calculations have very similar variations such as with the Current Ratio and the Quick Ratio.

3)      Who am I in this question? 

This is an especially important question to ask when dealing with short term investing and borrowing calculations questions for example, because these two activities are mirror images of each other and therefore their equations are very similar.

As a general rule, read every exam question very carefully.

-George Schilling, CTP