Creative Assessments
in the College C/assroom
Richard J. Mezeske
Barbara A. Mezeske
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JOSSEY-BASS
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Copyright © 2007 by John Wiley & Sons, IIjc. AlI rights reserved.
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ten permission thereof.
1. For the year 2006, what will be the immediate result(s) of Bath
Industries' decision to issue $8 million in stocks? Base your
answer on this decision alone. You must explain your answer
to receive credit. (4)
a. Bath Industries' earnings per share (EPS) will decrease.
b. Bath Industries' total assets will decrease.
c. Bath Industries' totalliabilities will decrease.
d. AlI of the above.
e. None of the above.
2. For the year 2006, what will be the immediate result(s) of Bath
Industries' decision to borrow $15 million through a long-term
loan (bonds)? Base your answer on this decision alone. You
must explain your answer to receive credit. (4)
a. Bath Industries' totalliabilities will increase.
b. Bath Industries' cash will increase.
c. Bath Industries' overall riskiness will increase.
d. AlI of the above.
e. None of the above.
3. Recall that the equation for the Security Market Line (SML)is
as follows: ki = kRF+ (kM- kRF)bi
Assume the required rate of return on a one-year U.S. Treasury
bond is 5.0% and the required rate of return on the market
portfolio is Il. 5%. Also, assume the expected rate of return for
Bath Industries is 13.0% and the beta for Bath is 1.20.
Now, also assume the federal government is successful in
implementing massive tax cuts for both individuals and
corporations. How will this new governmental policy affect the
default risk premium on Bath Industries' bonds? You must
explain your answer to receive credit. (3)
a. The default risk premium on Bath Industries' bonds will
increase.
b. The default risk premium on Bath Industries' bonds will
decrease.
c. The new governmental policy will have no effect on the
default risk premium on Bath Industries' bonds.
administered. Exams are not graded until students show
up at their prearranged time. The primary purpose of the
appointment is to systematically discuss each exam ques-
tion and its corresponding answer. The focus of this discus-
sion is on the student's justification of his or her circled
choice. It is at this time that the amount of credit to be
received for each answer is determined.
The actual process of grading the exam occurs at a
table where the instructor and student sit side by side with
the student's ungraded exam placed between them. Th~
instructor begins to read the exam, item by item, together
with the student. Mter each answer, one of thr.ee things
happens. First, a quick discussion and determination of
credit occurs when the student has provided the correct
circled choice and an adequate and thorough justification.
It is clearly evident that the student understands the think-
ing process required for this particular scenario. ln this
situation, because time is limited, a few words of encour-
agement and compliment must suffice.
Second, a fairly quick and somewhat more difficult dis-
cussion occurs when the student has provided the correct
or incorrect circled choice but has not provided a proper or
reasonable justification. As in the first case, the determina-
tion of credit is quick and easy because it is clearly evident
that the student does not grasp the concept or the required
thinking process. To begin the discussion for this particular
situation, l make the following straightforward request that
takes the general form of "Describe your thinking process
when trying to answer this question." When this request is
on the table, most students quickly confess that they do not
understand the concept or the required think,ing process.
ln any case, the discussion must soon be directed toward
providing the information, knowledge, and/or skills nec-
essary to bring the student up to the appropriate level of
understanding or to correct his or her misunderstanding.
The length of time devoted to this discussion will depend
on the degree of understanding. Students with little to no
understanding are advised to sc::;t up a time with the instruc-
tor at a later date. '
The final situation occurs when the student has pro-
vided an incorrect circled choice with a justification that has
sorne redeeming value or when the student has provided the
correct circled choice with a less than adequate or thorough
justification. Unlike the first two situations, l try to spend as
much of the allotted time discussing the student's thought
processes on these particular questions as needed. This is
precisely the situation in which critical, and often hidden,
information can be gleaned to improve the teaching process
to ultimately improve the learning process. Therefore, much
care is taken in listening to the various assumptions, cause
and effect relationships, and analytical reasoning that were
used in arriving at a particular answer. An analogy can be
drawn from the Total Quality Management movement in its
early years of implementation in Japan. Although producing
products with minor defects was not the objective, a product
that was discovered with a new or unique defect was cause
for celebration. This was because the ultimate discovery of
the root cause of the problem inevitably ledto a positive and
long-lasting change in the production process. Furthermore,
until the specific defect was produced and detected, the flaw
in the manufacturing process remained unknown (Deming,
1986). Now, the point here is not to celebrate when a minor
defect is detected in a student's answer but to treat it as a
wonderful opportunity and gather as much information as
possible.These are prime teachable moments for both the
student and the instructor.
An interesting phenomenon occurs after the first day
of appointments. The correct answers and reasonable
approaches to reaching these answers spread to the rest of
the students. Whereas students on the first day are some-
what anxious, nervous,' and tentative, many students now
arrive at their appointment armed with newfound knowledge
and confidence. They also arrive with an understanding of
where and how they "messed up."-The primary objectives
of the discussions 'remains the same-increasing students'
level of understanding and ability and assessing where the
teaching methodology may be improved, but the determi-
nation of credit becomes a bit more difficult. Students are
now able to verbally provide a reasÇ>nablejustification for
their circled choices in spite of what their written justifica-
tion may indicate. This is a minor inconvenience in light
of the fact that students are now teaching other students
what they have learned, raising the learning outcomes for
aIl involved.
As one can imagine, this is a significant time commit-.
ment on the part of the instructor. As with the review ses-
sion, l recommend that one class session. during .the week
be devoted to these appointments. Because one class period
was usually devoted to going over the exam with the entire
class anyway, this cancellation does not cut into precious
class time. But there is no magical way of getting around the
significant amount of time that must be devoted to this tac-
tic. With approximately 25 students in each of two sections,
and roughly 15 minutes per appointment, the time commit-
ment would entail12 to 13 hours. The class would meet on
a Tuesday and Thursday schedule. An exam would be given
on Tuesday, and by the next Tuesday, all 50 appointments
would be complete and we would be ready to grapple with
new material.