CDG Diamond Pricing & Valuation 2 — Questions and Answers
Question 1: When a diamond is quoted at '-10 Rap,' what does this mean?
- The diamond is priced 10% above the Rapaport list price
- The diamond is priced 10% below the Rapaport list price (Correct answer)
- The diamond has a clarity grade 10 levels below the listed category
- The diamond requires a $10 per-carat premium for certification
Correct answer: The diamond is priced 10% below the Rapaport list price
A '-10 Rap' quote means the asking price is 10% below the published Rapaport benchmark price for that size and grade combination.
Question 2: A round brilliant diamond has a total depth percentage of 74%. How does this affect its value?
- It increases value because greater depth improves brilliance
- It has no effect on value as long as the carat weight is accurate
- It decreases value because excessive depth causes a 'fish-eye' or dark center effect (Correct answer)
- It increases value because the diamond will appear larger than its carat weight suggests
Correct answer: It decreases value because excessive depth causes a 'fish-eye' or dark center effect
A total depth percentage of 74% is well above the ideal range (58–63%), causing light to leak and producing visual defects such as a dark center, which significantly reduces value.
Question 3: In the wholesale diamond market, what does 'cash discount' typically refer to?
- A discount applied to diamonds that are sold without accompanying grading reports
- An additional percentage reduction from Rap price offered when payment is made immediately in cash or equivalent (Correct answer)
- A rebate given to retailers who purchase more than 100 carats at once
- A price reduction applied to diamonds with visible inclusions under 10x magnification
Correct answer: An additional percentage reduction from Rap price offered when payment is made immediately in cash or equivalent
Cash discount is an additional percentage off the Rap-based price offered by sellers to buyers who pay immediately, reflecting the seller's desire to avoid credit risk and improve cash flow.
Question 4: Between which clarity grades is the price difference per grade typically most dramatic?
- FL to IF (Correct answer)
- IF to VVS1
- SI1 to SI2
- I1 to I2
Correct answer: FL to IF
The FL to IF distinction commands one of the largest per-grade price jumps because flawless diamonds are extremely rare and highly sought after by premium buyers.
Question 5: How are melee diamonds (under approximately 0.20 ct) typically priced in the trade?
- Individually, using the same Rapaport sheet as larger diamonds
- By total parcel weight and quality range, often as a per-carat price for the lot (Correct answer)
- Based solely on their country of origin
- Using a separate GIA report issued for each stone
Correct answer: By total parcel weight and quality range, often as a per-carat price for the lot
Melee diamonds are small and impractical to price individually; they are sold in parcels priced per carat based on average size, color range, and clarity range of the lot.
Question 6: How do 'Excellent' polish and symmetry grades typically affect a diamond's price compared to 'Good' grades?
- They have no price effect because polish and symmetry are cosmetic factors
- They command a premium because they indicate superior craftsmanship and optimize light performance (Correct answer)
- They decrease price because achieving these grades requires removing more rough material
- They only affect price for stones under 0.50 carats
Correct answer: They command a premium because they indicate superior craftsmanship and optimize light performance
Excellent polish and symmetry are associated with better light performance and are required for GIA's top 'Triple Excellent' designation, commanding meaningful market premiums.
Question 7: A fancy shape diamond (e.g., pear or marquise) is typically priced relative to a round brilliant of the same weight and quality grade in which way?
- At a premium, because fancy shapes require more skilled cutters
- At the same price, as the Rapaport sheet applies equally to all shapes
- At a discount, because round brilliants are more popular and have greater market demand (Correct answer)
- At a premium only if the stone weighs more than 2.00 carats
Correct answer: At a discount, because round brilliants are more popular and have greater market demand
Fancy shapes generally trade at a discount to round brilliants of equivalent quality because round brilliants dominate consumer demand and maintain higher liquidity in the market.
CDG Diamond Pricing & Valuation 2
When a diamond is quoted at '-10 Rap,' what does this mean?