CFA Exam – CFA Level 1 Preparation

CFA Level 1, CFA Program

Fahd Niaz works as an Equity Research Analyst for Credit Suisse based out of Singapore. He previously worked at KASB Securities Ltd which is the JV partner of Bank of America Merill Lynch in Karachi, Pakistan. He is one of the sharp young analysts that I have met in my career and I am grateful that he agreed to write for the CFA Candidates. Now let us read what Fahd has to say about CFA prep.

As a guest blogger, I thought I’d offer my two cents to address the common question on ‘How to prepare for the CFA exams?’.

Regarding the CFA program, I am a strong proponent of it as I believe it provides a competitive edge in your professional career. I completed the exams in Jun-13 and was fortunate enough to clear all three on my first attempt. However I am still in the process of fulfilling the work experience requirements before I can apply for award of the CFA charter.

This particular blog is intended for Level I candidates. An IMPORTANT disclaimer here – these methods are not set in stone and what worked for me, may not work for others. I believe everyone has a unique study approach and you should follow what suits you best.

Now that you’ve decided to take the plunge for the CFA exams, it is best to start early and space out your study schedule.

The Schweser guides do a good job of explaining the concepts in a concise way and they were my primary source for Level I. However do not underestimate Ethics! The curriculum is by far the best source for this section and I would suggest staying away from Schweser on this one. The level of depth, range of examples and difficulty of the questions are very exact. Granted yes, the readings will be boring at times, but you have to tough it out. Regardless of how ethical you think you are (morally and professionally), the CFA curriculum has very fine margins.

The monster of the Level I exam is Financial Reporting, holding 20% of your score – give it the respect it deserves! The readings can be much more complex as compared to the general finance courses you may have studied at the undergrad level. Topics such as Deferred Taxes were a nightmare for me.

I would recommend going through the entire course at least twice. Complete one reading and hit questions of the Schweser guides. This should build up some confidence for the blue-box examples in the curriculum and the EOC’s. The curriculum EOC’s will be the most accurate reflection of where you stand. To some degree, you need to be harsh with yourself – questions that you guessed correctly on, should be clubbed with the incorrect ones. Regardless of how lucky you have been in different spheres of life, or even if the stars have aligned for you recently, you may not be as lucky on exam day.

The number of formulas to memorize are significant and the best solution for these are flash cards. Questions that require using formulas in a simple manner are brownie points – don’t waste them! I would recommend making flash cards once you’re in the final month and keep reviewing them on and off.

I followed a self-imposed which said ‘never jump the gun’. I took it one reading and one book at a time and went with the natural flow of the curriculum. In this way you can ensure complete focus on the material in front of you. If you look ahead, chances are that you may not like what you see and that can play on your mind.

Finally practice, practice and more practice! Unfortunately this is the harder route and one candidates generally tend to ignore. However this is the only route to get through these exams and the importance of this will grow over Level II & III. Mock exams should be a part of your preparation and I would strongly recommend attempting the first one at least one month in advance of the actual day. Choose a nice quiet environment and time yourself. You may start to feel mentally exhausted through this but do not throw in the towel. Over several exams you should be able to get used to the serious mental gymnastics needed over six hours.

It is natural for candidates to also debate over the order in which questions should be attempted. During the practice exams, run some permutations and try to firm up an order which suits you. Use this in the real paper also!

Repeat the practice exams if you have to. Over the last two weeks , I would recommend a gradual phase down. Study lesser and lesser as each day progresses – yes you read that correctly! You need time to recharge your batteries before exam day. I firmly believe that if you’ve put in the hard work over the previous months, you should be confident in your own abilities to do well on the exam.

On exam day, get to the venue early. It’s best to acclimatize yourself to the surroundings. Also, keep a provision to dress warmly (a jacket maybe) since the exam hall may be colder than you think, regardless of the blazing sun outside!

Finally, try to stay in the present. Think of the question in front of you and nothing else.

Hope this was useful to all readers. Any follow-up questions are more than welcome. I will address the Level II and Level III exams in the later blogs.

Editors Note: Fahd will be back here with his advice for level 2 and level 3. So keep your eyes glued to this blog.

Read More

CFA Exam Preparation: My Foolproof Method to Pass the Exam

Passing the CFA exam on first attempt is tough. I was fortunate enough to make it. I actually used a certain method for CFA exam preparation, which I want to share in this blog post.

The truth is that there is no magic formula. It is all about hard work and determination.  In particular proper planning and execution of the plan is probably the most important factor in passing the CFA exam.

PHASE 1 (2-3 months)

1. Subscribe to this blog: Even though this blog did not really exist when I gave the exam, I will share all the tricks and tips I used to pass CFA. You wouldn’t want to miss those. don’t wait and write your email address on the top right space for subscription. Press the “subscribe” button and confirm it from your email inbox.

2. Register at AnalystforumAnalystforum is the best networking platform for CFA students. I used this forum extensively for some much-needed motivation. That is not the end as people share great notes, help each other out on difficult topics, share questions and what not. Overall a great community to be part of.

3. Finish textbook once: Finish the textbooks once (either CFAI or Schweser). CFAI books are recommended, but I (and others) did pass all three levels with Schweser as my primary reference book.

4. EOC from CFAI Books: Finish ALL the end of chapter questions from CFAI text-book. Don’t bother with questions from Schweser or other 3rd party guidebooks. All questions that you were not able to solve in the first attempt or looks complicated (or you got correct on fluke) should be marked for future reference.

5. Formula Sheet: Make a comprehensive formula sheet and take a glance at it from time to time.

6. Mock Exam: Give your first sample mock and if required keep the formula sheet with you on the first attempt. Try to stick with CFAI mocks and avoid 3rd party mock exams. Tabulate all the scores by segment in an excel sheet. Check the answers and see where you went wrong. Highlight all questions you were incorrect in or got correct by fluke for future reference.

Now you have created a strong base. The next step would be to internalize all the concepts.

Exams are coming up soon. Do not miss this writeup on how to best utilize the last 30 days before the exam.

PHASE 2 (1-2 months)

1. The Mock-Revise loop: THIS IS THE MOST IMPORTANT SEGMENT FOR MASTERING THE CFA. What you need to do is take a look at your scores and find your weakest areas. See where you went wrong by looking at answers.Then give another mock exam and repeat the cycle. Track your scores and see whether you are improving in your weak areas. I would recommend that you give at least 3 full mock exams.

2. Examples from CFAI textbook: The CFAI textbooks have excellent examples in all the chapters. Go through all of them and highlight the ones that look tricky or important.

3. Fill in the blanks if you used 3rd party guidebooks: One problem that 3rd party reference books users face is that these books sometimes skip important concepts to condense concepts. MAKE SURE you read the important chapters (like deferred tax) from the original book. Also Analystforum members sometimes make a list of topics that Schweser may have missed.

4. Memorize formulas from the formula sheet:  Carry the formula sheet around wherever you go.

PHASE 3 (Last 30 days)

1. Go back to highlighted questions: Attempt all the questions you have highlighted or marked before and keep doing them until you can get all of them correct

2. Revise entire syllabus by LOS: Go through all the learning objective statements and make sure that you have mastered (not memorization. Memorization does not work) the concepts. Again use the elimination method here as well.

3. Give one last mock exam (Optional): You might want to give a final mock 1-2 weeks before the exam to see your scores. However don’t attempt one too close to the exam as bad scores might affect your confidence.

4. Relax: Don’t forget to take breaks and enjoy time off during the process. I read many novels during my CFA prep time. The key to success for me was proper planning and execution without trying to cram at the 12th hour.

I have also written another piece on ‘how to utilize the last 30 days before the CFA exam‘ which should have extra resources. Be sure to check that out.

Read More

borneowebhosting informasiku