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3. Research Challenge-Grader Guidelines

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17 views3 pages

3. Research Challenge-Grader Guidelines

Uploaded by

Duy Anh Nguyễn
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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www.cfainstitute.

org/researchchallenge

CFA Institute Research Challenge


Grader Guidelines

Overall

▪ Reports are for educational purposes only and the information contained in them may not
be used by graders to make recommendations to clients or to the public at large.
▪ The teams typically consist of both undergraduate and graduate students. They are not
CFA Charterholders and have not worked previously in equity analysis.
▪ Please disclose any potiential conflicts of interest.

Time Commitment

▪ The time required varies widely from grader to grader. On average, each report should take
about two hours to evaluate.

Evaluating the Report

Each team has produced an equity research report that explains their buy, sell, or hold
recommendation and highlights the key points of their research. The reports are limited to ten pages
and may include an appendix, which is limited to 20 additional pages. Teams have to autonomy to
decide on the report format, but they must utilize the Headings outlined on the Written Report
Scorecard.

Teams can read existing research on the company, but all analysis should be their own. They should not
cut and paste analysis from another source into their reports. The data sources for all tables, graphs,
etc. must be cited.

If you discover any part of the report to be plagiarized, please contact the Research Challenge
team ([email protected]) immediately.

Keep in mind that:

• Teams DO NOT choose the stock or industry they research for the competition – this is
what differentiates us from stock pitch competitions;
• Teams are not expected to make a bold stock call – rather, they should be judged on the
quality of their research, their ability to apply appropriate valuation techniques, and the
soundness of their reasoning;
• Students are simulating the role of an independent buy-side or sell-side analyst;
• Teams may consist of both undergraduate and graduate-level students.
www.cfainstitute.org/researchchallenge

Scoring

After reading each report, you will complete a score sheet and assign the team a score. Reports should
be assessed on a relative basis, and graders should be consistent in their assessment across all
reports. It is up to the individual grader to decide the criteria within each Heading that constitute a
specific score.

You will score students in the following areas:

• Business Description - This section should include a detailed description of the company and
its products and services. It should also convey a clear understanding of the company’s
economics, including a discussion of the key drivers of revenues and expenses.
• Industry Overview & Competitive Positioning - This section should include an overview of the
industry dynamics, including a competitive analysis of the industry.
• Investment Summary - This section should include a brief description of the
company, significant recent developments, an earnings forecast, a valuation summary
and the recommended investment action
• Valuation - This section should include a thorough valuation analysis of the company
using conventional valuation metrics and formulas.
• Financial Analysis - This section should include a detailed analysis of the company’s historical
financial performance, and a forecast of future performance.
• Investment Risks - This section should address potentially negative industry and
company developments that could pose a risk to the investment thesis.
• Environmental, Social, Governance –This section should provide information on the
subject company’s corporate governance. We define corporate governance as the system of
rules, practices and processes by which a company is directed and controlled. Board of
Directors, action plans, corporate disclosure, and internal controls can all be included in this
section.

Students - especially those who do not progress in the competition - are eager for specific feedback.
Let them know how they did by including notes for each section:

• What could they have done better?


• How did the report differ from a professional report?
• What did they do well?

Students may be given a copy of your completed score sheet, so bear in mind that they will see
everything you’ve written. They will not receive your name. This feedback will help students improve the
skills they hope to use in their careers.
www.cfainstitute.org/researchchallenge
Feedback from Past Graders

Previous graders have suggested:

• Grading can be time consuming – make sure you’ve set aside enough time to dedicate to the
task.
• Do a little background research on the subject company before reading the reports.
• Read previous winning reports to get a sense of the quality of writing and research you
should expect.
• Skim the report once before beginning to score the report.
• Compare each team’s individual sections when assigning scores (for example, compare the
Valuation section of each report you grade to make sure the best Valuation section is awarded
the highest score; compare the Financial Analysis section of each repot to make sure the best
Financial Analysis section is awarded the highest score, and so on.). Some graders even
grade across sections for each report rather than grade an entire single report at once.

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