The Finance Professionals' Post

CFA Exam Taking Tips

June is near and CFA candidates all over the world are counting down the days until exam day. All of us at NYSSA wish the best of luck, strong composure, and laser focus to those members of the NYSSA community who took our weekly or condensed review courses, problem solving or essay writing workshops, bootcamps and mock exams!

Because luck is not always enough, here are some easy to remember exam-taking strategy tips from our Lead CFA instructor, O. Nathan Ronen, CFA for you to internalize before exam day:

Why Mock Exams Are Important

“Befitting its Greek roots, the marathon unfolds classic drama, carrying equal doses of comedy and tragedy, euphoria and agony.“ Take out the reference to Greece and substitute CFA exam for marathon and this line from Marathon Training Plan & Schedule by Josh Clark sounds like a perfect description for the CFA exam study experience.

224,640 Minutes

You can’t squeeze blood from a stone.

Count from the first minute of 2015 until you get to the last one on June 5^th, and you ‘ll have 156 days, 3,744 hours or 224,640 minutes. That’s all the time you have before the next CFA^® exam. This result won’t change no matter how hard you try. Given this, your assignment is to figure out how to best use your time.

Review: 300 Hours CFA Exam Insights 2015 Edition eBook

Sun Tzu, the famous 6^th century Chinese General and author of the timeless masterpiece, The Art of War wrote, “Know your enemy and know yourself and you can fight 100 battles without disaster.” 

While every CFA candidate hopes it will only take three battles to earn their charter, the concept is apropos. For the typical, newly enrolled CFA candidate, there is a general understanding about the demanding endeavor upon which they are about to embark.  They know that the test is difficult, that it takes a minimum of 18 months to complete and they’re probably aware of the subjects that will be tested on exam day.  

Are You Ready for the CFA Exam?

If you are like many candidates, you’ve probably penciled in a few "super" study days right before the December CFA^© exam. Maybe you’ve even asked your boss for a vacation week. On the surface, this sounds like a good plan, but it really isn’t. You cannot cram for this exam. You either know the material by now – or you don’t. To paraphrase a colleague of mine, it would be better to spend those last few days in prayer or meditation. But there are a number of things you can do to ensure you are prepared and to reduce exam-day stress. 

Eight Facts You May Not Know About the CFA Exams

There are a lot of things you learn while taking the CFA exams. Some time back, Zee's written 20 points you should know about the CFA exams, especially if you're new to it.

And today I'll try and add on to that, adding eight more facts that certainly even candidates may not know. I must admit - I only knew about fact #7 before I started this article!

If you've got any to add to the list, don't forget to drop them in the comments below.

CFA in 18 Months: 3 Crucial Mistakes You Must Avoid

Just starting out on your CFA preparations and looking for some guidance? 

Many candidates aspire to aim for passing the CFA® exams in 18 months, as detailed in my Level 1, Level 2, and Level 3 adventures just a few years ago. 

While hard work and effort are a prerequisite, here are a couple of mistakes I made but wished I knew beforehand during my CFA journey - I hope it helps  you avoid the usual pitfalls of taking on such a challenging qualification!

FAILING TO PLAN

You've heard of this old saying time and again, and it certainly applies to your CFA study preparation too. Many candidates fail because they just thought they could "wing it," and take their time studying the materials without sticking to some sort of a strict schedule. 

Or worse, some candidates even took time to do a simple study plan, but ignored them anyway during the revision and start to fall behind schedule. If you know you're behind, perhaps because you underestimated the work load or it took more time to understand a tricky concept, you need to make it up in your studies to ensure you catch up with your schedule.

Why? Because finishing on schedule, specifically one whole month before the exams (which I highly recommend), gives you ample time to do tons of practice papers, and contributes the other 50% to your learning and grasp of material. Yes, reading and covering the syllabus is just half of the work (and still very important), but the real test of your understanding of CFA concepts comes when you're tested under timed conditions. 

UNDERESTIMATING THE MATERIALS

I have a degree in Economics and when I first took December Level 1, I remember smirking when looking through the economics section of the materials. Guess what? I paid the least attention to that section and scored the lowest band for that topic. "Easy," eh?

Overconfidence can be a dangerous thing for the CFA exams. In fact, in a 2012 study, we found that candidates with no finance background (in prior education or work experience) significantly outperformed candidates who had prior finance education for the CFA exams. This tells us two things:

• Complacency negatively affects your pass rates, which is common amongst candidates with prior finance education (but not working in finance currently). Skipping or "spotting" topics is not advisable, perhaps only when you're doing a last minute review (which shouldn't happen if you're learning from Mistake #1 above)!
• Having no prior background in finance nor work is actually an advantage (yay engineers!)

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Continue reading "CFA in 18 Months: 3 Crucial Mistakes You Must Avoid" »

Four Ways to Prep for CFA Exam Day

By now, you should have completed the first pass-through of the entire curriculum, as well as prepared your own study notes and/or flashcards. Now it’s time to practice exam day survival skills.

Even if you’ve committed everything to memory, it doesn’t mean you are prepared to take the exam. The six-hour exam is grueling. Three hours in the morning, a cruel two-hour lunch break, and then back to another three hours round in the afternoon. This is no walk in the park. You need to prepare physically and mentally for that day.

“Old-Fashioned” Study Methods a Hit

A recent Internet search for “online CFA exam prep” yielded over a million results, and included a dizzying array of study options. Test banks, mobile apps, instructional videos, digital study guides, virtual study groups, and forums just to name a few. Trying to figure out what works best can make your head spin, so to help cut through the noise, I reached out to people who should know. I asked current exam candidates, as well as those who recently earned their charter, for advice.

The Paths to a Career in Investment Management

More than one third (37%) of all CFA^® Charterholders are portfolio managers or research analysts. The remaining 63% are strewn across a variety of job functions. Before becoming a CFA candidate, check the CFA Institute website to make sure your dream career aligns with the job functions held by current CFA Charterholders.

Why You Should (or Shouldn't) Take a CFA Review Class

Most candidates do not get through all three exams studying on their own. But is a live review class right for you? Only you know if you can commit to a weekly schedule or whether a live class appeals to you, but there is another factor you should consider. CFA Institute states, “The progressive nature of the three different levels means that the questions at Levels II and III require higher-order thinking than the questions at Level I.”  So I suggest thinking about this based on your exam level.

CFA Topic Deep Dive: Your Guide to Understanding Diversification

In prepping for your CFA® exams, one of the most frustrating things that can happen is that your mind simply refuses to grasp a particular concept. Often, you may be forced into blind memorization out of desperation.

The purpose of the CFA Topic Deep Dive articles is to help you understand certain CFA concepts. By going into deep detail on a particular example, you'll learn all the nuances about each topic and go into your CFA prep (and exams) better prepared.

We'd love your feedback on this series, so let your views be known in the comments below. For this article, Miguel and Mykola from Financial Analyst Warrior take us through a detailed example of diversification.

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–300 Hours

This article was reposted with permission from 300 Hours, a site dedicated to CFA candidates and charterholders.

Continue reading " CFA Topic Deep Dive: Your Guide to Understanding Diversification" » 

 

Should I Study for the CFA® Exam on My Own?

This question comes up often among candidates sitting for the CFA^® exams.  

The answer is simple:  NO!

Setting Your CFA Sights on December 7, 2013

The December Level I exam is right around the corner. My guess is you are probably viewing this looming date a bit like FDR’s "day of infamy." But if you created a study plan – and kept to it reasonably well – then December 7^th does not have to be a day that makes you want to declare all-out war. So let’s see if you are on target.

My CFA Experience (Level III): Vy Bui

What better way to close my CFA exam journey than by sharing my Level III study strategies, which helped me pass the June 2013 exam?

My first two articles talked about my CFA Level I exam experience and my third article talked about how my study strategies changed from Level I to Level II. So, this article focus on the changes (in detail) I made to surmount the difficulty of Level III materials and the essay exam format of the morning section. Hopefully, this will inspire current and/or future CFA candidates to pay special attention to their study strategies.

When Should You Be Entering the CFA Program: December or June?

Now that CFA Institute will be holding December Level II exams starting in 2014, this question is much easier to answer.

What? You hadn’t heard about this new December exam development? 300 Hours broke the news this past April in their blog. They also reference the related press release.

A “Calculating” Tip for Level I and II Candidates

If you have cracked open an exam curriculum book (or clicked open the e-book version), then you are familiar with the structure of the curriculum. You know that topics are divided into study sessions, assigned readings accompany study sessions, and learning outcome statements – or LOSs – are developed for each reading. I’m not really telling you anything new here.

Don’t Miss the Easiest 15 Points on the Exam!

Want to know the easiest way to lose 15 points on the exam? According to Michael Maestas, CFA, CPA, it is showing up with only a beginner’s understanding of how to use the HP12C or TI BA-II calculator. He says the difference between being a novice and a power user can easily be worth that much.

Ready...Set...Study! A Study Checklist for the June CFA Exams

You’ve registered for the CFA® exam* and opened the box containing six curriculum books from CFA Institute. Now what?

Plan your attack using this checklist:

Ethics Is Important

Core to the mission of CFA Institute is promoting high standards of ethics, integrity, and professional excellence. Those pursuing their charter are introduced to this early, as committing to the CFA Institute Code of Ethics and Standards of Professional Conduct is a requirement to enter the program. Furthermore, CFA Institute warns that this commitment should not be taken lightly.

That’s good advice.

When Should I Practice Item Sets?

I wanted to get started on my preparation for June 2013 Level II and saw you had recommended doing the CFA curriculum readings (with exception to Ethics) post–Labor Day through December. Do you also recommend doing the accompanying problem sets with the readings or saving those for later (i.e. Jan–May) when I would also use the prep provider materials (i.e. Schweser)?

–Alfred M., Level II Candidate

Pursuing the CFA Charter – Candidates’ Perspective

The first deadline for June 2013 CFA exam registrations is September 19, 2012. But price shouldn’t be the only thing you consider when deciding to enter the CFA Program.

Three Must-Know Tips to Nailing Ethics

If you're new to the CFA exams, hopefully by now you're aware of how important mastering ethics is to your CFA studies. In an effort to help, here are three steps to ensure you are on the right path to nailing the ethics section in the exam.

Dealing with Failure

The CFA® exam is no ordinary exam, so the high failure rates generally mean that there is significantly more disappointment than the average qualification. Also, CFA candidates tend to be overachievers—i.e. not used to failing. I had my own bittersweet experience in this once in Level II.

Here are the steps you should take if you didn't manage a pass this time around:

My CFA Experience (Level II): Vy Bui

After almost eight weeks of waiting from June 2^nd to July 24^th and another five terrifying hours of waiting on the day results were released, it was a great feeling to know that I passed the CFA^® Level II exam. I couldn’t be happier knowing that all my hard work and support from family members, friends, instructor, and coworkers paid off in the end.

Following up on my previous two articles about my CFA Level I exam experience, this article will emphasize what did and did not change in my study strategies that helped me successfully overcome the daunting challenges of moving from the Level I to the Level II exam.

Which Level I CFA® Exam Should You Take—December or June?

On the surface, it sounds like a no-brainer. Starting with the December Level I exam shaves six months off the time needed to take all three exams, right? Yes, in theory that’s true—if you pass all three on the first try. But let’s dive into this a bit more so you know what you’re against if you decide on this route.

Is the CFA Charter Really Useful in Getting an Investment Banking Job?

In September 2006, when I was a second-year Goldman analyst, one of my associates texted me to “show off” that he had just passed Level III of the Chartered Financial Analyst^® program. I have to admit that I was jealous! I knew it was a definite plus on his resume because I’d heard that it was extremely challenging.

I thought, “If he has the time to study for the CFA [exam], I can make time too!” It was September already but I still applied for the December 2006 Level I exam. I passed. I passed the next two levels in June 2007 and June 2008, respectively.

Should a CFA Charter Be in Your Future?

More than 150,000 candidates sat for the CFA exams this past Saturday. Some will move to the next level or earn their charter. But many will have to decide if they should try again next exam.

The charter is not easy to get—which can make it very desirable. But is it right for you? Here are some things to consider:

Counting Down to the CFA Exams

FOUR WEEKS TO GO...

By now you should have finished your first reading of the CFA curriculum. If you haven’t, then get a move on it—time is ticking away.

Make a plan for the critical phase that’s coming up: revision. There are lots of ways of planning your study time, but the simplest technique is to just divide your days up into blocks of study time, say a 2.5-hour block in the evenings after work or three 2.5-hour blocks on weekend days. This may sound obvious, but it’s crucial that your blocks are dedicated exclusively to study. Do, however, ensure that you give yourself time off in between your study blocks too.

The Formula to Approaching CFA Level II Formulas

The Level II curriculum is chock-full of formulas which makes it very easy to jumble it into a massive helping of Greek alphabet soup in your head on exam day. Here are some tips to avoid this exam-day scenario:

DO NOT Memorize

Instead of memorizing, find ways to understand and categorize the cirriculum at a functional level.

Prof. John Veitch, PhD, CFA teaches candidates to eliminate memorizing almost all formulas in the foreign exchange section (Level II SS 4) by conceptualizing cross-currency calculations as triangles and covered interest rate parity as boxes. If you know what the sides of the triangles and boxes mean, all that’s left is to plug in the variables. This technique can be used for calculating rates and arbitrage opportunities. For exchange rate predictions, he "standardizes" the approach as the beginning rate times an adjustment factor that has a common form regardless of whether it's inflation or interest rates doing the adjustment.

Good Advice for Level II Exam Preparation: Lather – Rinse – Repeat

There are approximately two months left before the CFA exam is given in June. By this time, most candidates should have read through a good portion, if not all, of the curriculum and spent time studying what they’ve read. But how have they ensured that they really understand the material?

PRACTICAL STUDY TIPS:

Maybe they incorporated study advice and tips given by candidates who have already passed the Level II exam.

The “Weight”iness of Level II Item Sets

My last post, "Item Sets Define the Level II Exam," showed how the item-set format shifts the candidate’s focus and emphasized two additional test taking skills—reading speed and reading comprehension. This is because item sets contain vignettes, or large blocks of information, from which six multiple choice questions are asked. There are 20 item sets on the exam (10 in the morning and 10 in the afternoon), for a total of 120 questions. Despite having half the number of questions than the Level I exam, time management is still critical but it now takes a new dimension. The item-set format requires that the candidate read quickly and accurately in order to be successful. The item-set format also changes how questions can be structured and so impacts how things can be asked.

Item Sets Define the Level II Exam

Multiple choice questions are used to test knowledge on both the Level I and II exams, but there is a significant difference in the formats of the two exams. The Level I exam is an onslaught of multiple choice questions grouped by subject, but not tied to another question in any way. Level II, on the other hand, groups questions in "item sets". This difference in exam format changes the way candidates need to prepare for the exam.

How Should I Study for the CFA Exam?

"How should I study for the CFA exams?"

-Anonymous

In my previous article, “When Should I Start Studying for the CFA® Exam?”, I outlined how a candidate should prepare for the CFA Level I, II, or III exams in June and the CFA Level I exam in December.

The most important point I raised in Part I is that you should have finished reading the curriculum readings and/or your prep provider’s materials by April 15th if studying for the June exam and October 15th if studying for the December exam.

This second article will help you understand what you should be doing from April 15th until the June exam day or from October 15th until the December exam day. If you have completed the CFAI curriculum readings or the prep provider’s materials by April 15th or October 15th, it is not time to kick back and relax. In my opinion, you have only completed 50% of the work if you are a Level I candidate, 40% of the work if you are a Level II candidate, and only 30% of the work if you are a Level III candidate that is needed to be prepared for the exam.

My CFA Exam Study Strategy

I think that pursuing a Chartered Financial Analyst (CFA) designation requires commitment from the candidate along with support and understanding from their family, friends, employers, and colleagues. As a Level I CFA candidate, I started to study for the exam at the beginning of August 2011 by enrolling in the CFA preparation course offered by New York Society of Security Analysts (NYSSA). I find the course helpful and interesting because my instructor was very knowledgeable and has a great sense of humor. Three and a half hours each Monday fly by. I know that all of us candidates worry, and may be nervous ahead of the exam. There are many strategies available, and a large part of them have been covered previously, but here are a few of the study strategies that I am using to get through the CFA® exams.

Maximize Your Performance on the CFA Exam

If you stay focused and composed, you will maximize your performance on the CFA exam. It’s hard to argue with that! Follow this game plan to minimize stress and increase your chances of success on exam day.

Studying for the CFA Exam: The Final Countdown

You’ve studied diligently for the last several months, plowing through endless pages of material, answering countless practice questions, and meeting weekly with your study group. Now what? With less than a month to go before exam day, what is the best use of your time?

When Should I Start Studying for the CFA Exam?

 When should I start studying for the CFA® exam?

- Anonymous

This is a timeless question and I can’t think of any class I taught where this has not been asked. It is also not level specific. I have heard it from Level I, II, and III candidates. As we have covered in the past, studying for any CFA® exam is not to be taken lightly.

CFA Prep Podcast: Level III Advice

It is an innocent and common mistake for Level III candidates. Most will not even know it can be so costly. Listen to Nathan Ronen give key advice to CFA Level III candidates here.

Learn more about NYSSA's CFA® exam instructors, or register for CFA® Exam prep here.

Can I Reuse Study Materials for the CFA Exam?

“I am studying for the CFA Level II examination again because I did not pass it the first time. I bought all the curriculum readings and I have last year’s prep provider’s study notes. Can I use these materials again or do I need to buy everything a second time?”

-Anonymous

CFA Preparation: The Benefits of Study Groups

There are several benefits to preparing for the CFA exams in groups, including confidence building. Louise A. Howard, CFA, CAIA, Senior Investment Analyst for the YMCA Retirement Fund, explains here. 

Nathan Ronen for NYSSA CFA Prep

 “Excellent, valuable, amazing, unique, extremely helpful”—words that are not easily spoken when referencing the CFA exam. That is, unless you experience CFA exam prep Nathan Ronen–style.

The popular instructor and CFA charterholder will return to the New York Society of Security Analysts in January 2012 as CFA® Lead Instructor to teach CFA exam prep courses for Levels II and III of the June 2012 exam. Ronen’s track record is impressive. He has been teaching CFA Levels I, II and III for over 16 years and has helped over 20,000 candidates pass the CFA exams. Part of his success is attributed to his background. He understands the pressure that candidates face, having earned a CFA charter while working in finance. “I don’t believe in merely reciting the CFA curriculum back to students. That’s not teaching the material. Candidates who have had me for Level I or Level II know that my ability to hone in on essential points and take the most difficult concepts and break them down to a simpler form is what helps them pass on exam day,” says Ronen regarding his teaching style.

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Of course, Ronen’s strong knowledge of the financial markets, from years of working in the financial sector, is another valuable resource in his teaching style. He served as a supervisory analyst training government regulators, an accounting analyst, and a corporate finance analyst. His professional experience encompasses well-known organizations such as New York Life, NASD, and Salomon Brothers.

In addition to teaching CFA exam preparatory courses for NYSSA, he has taught for the Washington Society of Security Analysts and the Study Seminar for Financial Analysts (SSFA). Ronen has also taught in-house CFA seminars at Goldman Sachs, Merrill Lynch, Citigroup, and many other major financial institutions.

Click here for more information on NYSSA CFA Exam Prep Courses.

Are Your CFA Study Strategies Working against You?

In order to pass the CFA exams, you must show you’ve mastered the material. Unfortunately many candidates follow a study strategy that severely hurts their chances of passing the exams.

TYPICAL CANDIDATE EXAM STUDY STRATEGY

• Plow straight through the material, happily highlighting as you go.
• Do practice questions, typically in small blocks of time and only on one study session.
• Massive cramming in the two weeks before the exam.

To Pass the CFA Exam—Train for a Marathon!

If I told you I was going to run up the block and back to my house every day for a year and when I was done, I would be ready to run a marathon, do you think I would be successful? Of course not! But many candidates take the same approach to preparing for the CFA exams.

If your study approach resembles my marathon training scenario, you probably do problems in little chunks of time topic by topic—perhaps during commercial breaks during your favorite TV shows. I’ll agree that over a week’s or month’s time you may have actually completed a full exam. But that’s not the same as sitting down for two 3-hour exam blocks. The outcome looks to be the same but it isn’t. That’s because you are training for a sprint when you should be training for a marathon.

The CREDO for CFA Study Group Success

If done right, participating in a study group is one of the best ways to prepare for the CFA exams. An informal survey of candidates in study groups shows that successful study groups are:

Committed. Study groups only work if people attend consistently and contribute regularly. Meet once a week at a set time and place. So show up to each and every meeting! Agree on an attendance policy and hold members accountable.

Reliable. Come prepared to discuss that week’s topic. All group members should read the curriculum, do associated problems and/or construct practice questions beforehand.

CFA Exam Strategies: What to Do on the Day of the Exam

In the final part of William A. Trent's speech, he provides candidates with detailed test-taking tips for the day of the exam. 

CFA Exam Strategies: Be Prepared

In the second part of William A. Trent's speech on CFA exam strategies, he outlines some of the simple missteps that can trip up candidates. 

CFA Exam Strategies: Practice, Practice, Practice⎯and Check Out the Errata

At NYSSA's CFA Level I Orientation, William A. Trent, director of the exam development division at the CFA Institute, offered up his multipart strategy for passing the CFA Exam. In the first part of his speech he advises candidates to practice often and avail themselves of the materials on the CFA Institute website.

Two Ways to Take Studying for the CFA Exam to the Next Level

ONE: CONSTRUCT YOUR OWN MULTIPLE-CHOICE QUESTIONS

What? Why should I construct my own questions when there are plenty of study banks and practice exams out there? Here’s why. Constructing your own multiple choice questions:

1. Shifts your focus from memorizing facts, definitions, and formulas to a deeper understanding of the material.
2. Requires that you have a conceptual foundation of the material and therefore gives you insight to how the LOS can be asked. If you can’t write a question about a topic, how can you answer one?
3. Forces you into an active study strategy. Relying on practice exams is a passive and less useful strategy. Writing your own forces you to engage with the material.

CFA Prep: The Science of Study Groups

Preparing for the CFA exam is a daunting process: not only do experts suggest that candidates put in hundreds of hours of study time for each level of the exam, but also the numbers show that even if you put in that kind of time there is no guarantee that you’ll pass. The good news, however, is that you don’t have to go it alone. The old adage claims that two heads are better than one, but don’t just trust the old wives—there’s scientific evidence to back it up.