- Hello students and welcome to BS 101 -

So I took my first 3rd-year exam today, and spent half an hour on a question which I eventually cancelled out and did not do. For those in the know, it was a question on the intertemporal model, and was a carbon copy of one that had come out 3 or 4 years ago, with a slight difference: instead of asking students to assume that beta = 1/(1+r), the question stated: "You can assume that beta = r in this question."

The only problem with this was, assuming beta = r led one down a labyrinthine maze, with the cheese at the centre of it being replaced by a loop of interminability and a lifetime of suffering born of charging at windmills. Or half an hour with the eventual effect of having to cancel the question.

It was not shocking, thus, that an irate troop of 3rd-year students stormed the computer labs in a blur of conniption shortly after the paper to make our feelings known to the culprit.

My email: Dear -- ---------- (name omitted to protect the guilty),

Hello there! Just emerged from the EC315 paper and just wanted to let you know it was okay........except for one question, which I'm quite certain had an error in it (which I raised to the invigilator who said there was nothing wrong with it):

Q 13, the intertemporal question, stated that we can assume beta = r
However, this makes the whole question extremely messy and virtually impossible to finish within 45 minutes. I think the appropriate equation should have been beta = 1/(1+r)? Then C1 = C2 and so on and so forth.

Ended up spending 30 minutes on the question, before cancelling it to do question 14, leaving me with very very little time to finish the paper.

Could you advise me on this?

Kind regards,
Jonathan Ng

The very repentant reply: 'Dear All:I have gotten many many emails regarding this question. I'm afraid I cannot answer individual inquiries on the exam at this stage (the School does not allow me). The question said: "You can assume r=beta in this question." You didn't need to assume it'

The troglodyte.