On what factors the GMAT software calculates the raw score ?

[AbhiJ]

There are three points that are in contention
a.) No of answered questions
b.) Difficulty Level of Correctly Answered Questions
c.) Difficulty Level of Missed Questions.

My question is is there a penalty for incorrectly answering easier questions.

Case 1:
25 Questions answered correctly with the average difficulty level = 700
16 Questions missed with the average difficulty level = 600

Case 2:
25 Questions answered correctly with the average difficulty level = 700
16 Questions missed with the average difficulty level = 550

Can the student in Case 2, get a lower sectional score.

So if this is the case then GMAT scoring is somewhat like negative marking(penalty for guessing).

[OfficialGMAT]

Thanks for your question! I have passed it onto our psychometric team for a full explanation. In the meantime, you may want to take a look at these two blog posts: https://officialgmat.mba.com/2010/01/13/ ... -the-gmat/ and https://officialgmat.mba.com/2009/09/17/ ... -guessing/ which cover some parts of your question.

[OfficialGMAT]

Hello, AbhiJ! Our psychometric team saw your question and sent you this explanation:

Yes incorrectly answering easier questions will lower your score. The raw IRT score is a value that takes into consideration the item difficulties and the responses to all the questions that were administered. This IRT score is then transformed to the historic GMAT scaled score with a proportional deduction for questions not answered. This is not the same as a penalty for guessing. If a question is very hard (say a 750 question and you are really a 650 test taker) and you guess incorrectly, the question will not count much. If a question is very easy (say a 550 question and you are a 650 test taker) and you answer it incorrectly, again, the question will not have much weight. If however, you miss many 550 questions, then this set of questions will count more when all the responses and difficulties are evaluated.

I hope that answers your question.

[David@VeritasPrep]

Thank you Rebecca and psychometric team for that candid response.

This confirms that one of the most important things that a test taker can do is to focus on correctly answering the questions that she can/should get right. A single false positive or false negative does not matter much. A string of false positives (a student correctly answering a question far above her level) is very unlikely since that would mean that she is indeed capable at that level. It is a number of false negatives that can skew the score, since it is certainly possible for a student to make a number of errors and miss questions that are within her level of ability. For example, if a test-taker scores 100 points lower than expected then one explanation could be that the test-taker made several avoidable errors on questions below her level of difficulty.