At school, you sit assessments that each have a weighting. This gets added up to form your raw school percentage, probably the mark on your report. But this mark is based on your school's assessments. At another school, they have their own assessments and own weightings etc., so you can't compare your mark and your rank to a student at another school.
In order to fairly compare marks, BOS needs every student to sit a common assessment, that being, the HSC exams. Your school marks will be 'moderated' based on how well your cohort performs in the HSC exams. The moderated assessment mark of the 1st ranked student will be the highest exam mark of any student in your cohort. The moderated assessment mark of the last ranked student will be the lowest exam mark of any student in your cohort. This may seem unfair, but it's logical. What BOS is doing is now putting your school's set of assessment marks relative to the state. This means, had your assessments been to the standard of the HSC, no one in your school would have gotten over say 95 (if that was the highest exam mark) - so those school assessments where students achieved 100% or whatever, were probably slightly easy for HSC standards etc.
But BOS does not simply allocate the 2nd highest exam mark to the 2nd ranked student for their moderated assessment mark. BOS takes into account the relative gaps between students. Coming 10th by 2% puts you in a better position than coming 10th by 20%. Those highest/lowest exam marks are the bounds of your cohort's moderated assessment marks. No student will achieve a moderated assessment mark higher than the highest exam mark, and vice versa for the lowest exam mark. This is the reason why doing well in the HSC exams individually and as a cohort is paramount. But this does not disregard school assessment marks. If the range of the exam marks are small, then obviously the moderated assessment marks will be close. If the range is large, then the gaps become noticeable. BOS must also keep the mean of the assessment marks to be the same as the mean of the exam marks. It may be that the lower end gets raised to accommodate for the moderation process.
Think of a rubber band, where your relative gaps between students' marks are shown. If your exam marks have a large range, that rubber band will be stretched, so will the gaps between each student. If your exam marks have a small range, that rubber band will be contracted, and so will the gaps. These are relative gaps. They stay the same, relative to other gaps. So even if the exam marks are like 95, then 85, 84, 83 etc., if 2nd is close to first in school, it's possible for 2nd to achieve a moderated assessment mark of 94, because their gap in school is small. They might have a mediocre exam mark, but their assessment mark is really based on school performance. So it is also important to do well in school. But notice that ranks don't really matter unless you are first or last. It's the gaps which matter, so you want to get as many marks as possible so you're as close as possible to the top, in terms of marks. What ultimately matters is the HSC exam, and that everyone does well.
