From my experience there are various factors that could affect the performance of a student in an exam.
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A good answer. Our exams presently are mostly based on memory power. There is no creativity aspect or IQ measurement. It does not give practical knowledge needed to problem solving of real life obstructions and hurdles faced by them.
True. Real knowledge is through practical experience. Bookish knowledge is not sufficient to make one succeed in his life. It merely tells you that such and such is such. But it does not tell you how to tackle problems in your day-to-day life.