CFA Level 1 Mock Exam Rocky Balboa Montage!

Remember the great training montages in the Rocky movies? Where the champ could come back from a defeat to overcome a stronger boxer by just going through three minutes of training set to some kick*#@ music.

Ah, if only studying for the CFA exams were like that. You could slide through the first four and a half months of the year with your mind decidedly not in the game and then crank out a hardcore two weeks to beat the exam! Epic!

While you can’t expect to pass the exam with just two weeks of studying, what would your montage training program look like?

Eye of the Tiger
Picking up on the montage scenes in the movies where Rocky turns everything he can find into an exercise, you really need a diversity of study resources. Rocky’s montage may only last three minutes but yours will be two weeks and only doing practice problems is going to get boring. You need to be using flash cards, condensed reviews, practice problems, and single-sheet summaries. Just as you can’t expect to get well-developed pectorals from just a bench press, you need to hit the CFA curriculum from different angles to assimilate it.

Do you see Rocky taking it easy during the montages? No, he’s sweatin’ and pushing the limit lifting a 500 pound cart with Paulie in it. You can’t take it easy in your montage either. By now you know which topic areas are your most difficult. While it wouldn’t make much sense to spend a lot of time on something worth less than 10% of your score, you can’t afford to neglect any one section. Be realistic here and divide your time between those topics that carry a lot of weight and those in which you need the most work.

The beginning few sequences in Rocky’s montage sometimes start with him attempting a really heavy lift or exercise and not quite being able to get it, only to succeed with the same lift later on. For your montage, this means looking deeper into those practice problems or CFA level 1 mock exam which were missed so you can answer them correctly if they come up again. It does you no good to just take a CFA Level 1 mock exam and look at your score. You have to actively study the questions you missed and understand what material you need to work on.

If you haven’t already, you absolutely need to take a CFA Level 1 mock exam now. Better yet, take two exams to make sure that your score in any particular topic area in the first practice wasn’t just luck. This is going to give you a good idea of where you stand for your grasp on the material.

Once you know how well you are doing on the material, start your two week montage hitting those practice problems, flash cards and review sheets.

At the end of your montage, maybe Wednesday/Thursday of final week, take another couple of CFA Level 1 Mock exams to see your new, improved score.

FinQuiz offers 6 Full-length Mock Exams.

Then get ready for the big day!
If the exams were a Rocky opponent…
Level 1: Apollo? Many Level 1 candidates are surprised the first time and fail but then come back for the win

Level 2: Mr. T? For most, the hardest exam and many candidates get overconfident after a passing Level 1 score. I pity the fool that don’t take Level 2 seriously!

Level 3: Ivan Drago? Still a tough exam but at this point, we all know that you are going to beat the exam though it may feel like you’ve got brain damage afterwards.

Ah, if only Stallone could live forever, “Rocky XXV: Clone Wars”

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: October 24, 2016 at 4:20 am

CFA Employers love to see the CFA designation on resume.

One of the most contested questions on the CFA forums is whether the charter, or passing the exams, will help you get a job with CFA Employers. Despite my constant grumbling that the experience is worth it simply for professional development, candidates still look to the charter to help gain employment. Imagine it, the nerve! 😉

Rest easy candidates, I can tell you from my own experience (and from the experience of many others) that your hard work is appreciated and will be rewarded. Employers love to see the CFA designation on your resume.

It’s not just charterholders and the Institute

You would expect other charterholders to talk well of the designation and look to other members as employees. We know full well the kind of hard work and dedication that goes into earning the right to those three little letters. I have seen whole firms that seem to employ exclusively charterholders and it is usually the result of a charterholder at the top making decisions. It doesn’t take long looking through postings for analyst opportunities to see more than a few, “CFA charter or progress required.”

But it is always those outside voices that strike me as the most convincing. Those CFA employers I talk to that have not sought the charter for themselves but recognize the quality represented by someone willing to put in the long-hours and hard work.

One of my first freelance writing projects was for the quarterly advisor newsletter of the Baxter Credit Union. Over the one hour phone conversation, the hiring advisor spent at least 20 minutes talking about the great things he had seen from CFA charterholders. Here I was looking for a job and the interviewer couldn’t stop congratulating me on my accomplishment!

My current employer, a venture capital firm out of Canada, requires that all analysts be charterholders or are candidates for the exams. It was imperative to management, when putting together a team of sell-side analysts, that they find people with a high standard for ethical and professional behavior. Having the charter does not automatically make you an honest person but employers know that, besides their own code and standards, charterholders are bound by the CFA Code and Standards.

And these are only two firms of the many that I’ve talked to and have explicitly favored charterholders or candidates in the hiring process. It’s especially true at small firms and for contract positions. These firms might not have the resources or time to fully train a new analyst. By hiring charterholders, they know that their new employee has a minimum of exposure to a range of topic areas through the curriculum.

A strong tool but not the whole toolbox for CFA employers

Obviously, earning the charter or having passed the exams will not get you the job versus a much more qualified and educated job hunter. Completing the three exams is not the last professional development you’ll need. Look to the Institute for research or seminars. Take an honest look at your resume and improve on those areas where you are lacking.

It also cannot do the networking for you. You still have to be aggressive in your job search. Make calls and go to professional events. Ask for the interview and send your resume.

When they see the hard work you have put into the CFA exams, they will take a second look and that effort will be rewarded.

We have published a 5-part blog posts series on how to get jobs.

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: October 14, 2016 at 6:53 am

CFA Institute Mock Exam – How to access?

CFA Institute mock exam and topic tests are available from the CFA Institute. One mock exam is included in the price of registering for the test. The mock exam is a six-hour test in two parts and mimics the topic area weights of the actual exam. The topic tests are shorter than the actual exam and focus on specific topics. The Institute claims that the questions on both represent the approximate level of difficulty on the actual exams but I always felt they were slightly harder.

The semantics here always seemed a little confusing so let’s get a couple of definitions out of the way. A ‘mock’ exam is a six-hour, two-part test with the same number of questions and meant to replicate the experience of taking the actual CFA exam. A topic test or problems are normally considered to be a shorter group of questions than the actual exam. A mock exam does not necessarily have to be one formalized set of questions but can be constructed from a test bank or by selecting individual problems and doing them all in one sitting.

Regardless of what you call it, you absolutely must take a few mock exams before you go to the actual exam in addition to CFA Institute Mock Exam.

Glucocorticoids and why you absolutely must take CFA Institute mock exam

An overlooked benefit of practice problems and mock exams is as a stress reliever on the big day. Everyone is on edge when the proctors pass out test booklets for the exam but I have seen many candidates that appear close to a breakdown of Chernobyl-proportions. Being stressed out will not do you any good on the exam. In fact, the body reacts to stress by secreting hormones like glucocorticoids that impair the ability of the hippocampus to recall memories and diverts energy away from other important parts of the brain.

Do you think it might relieve a little of that stress knowing that you have completed multiple mock exams and have done well? Of course it would. Taking full-length mock exams helps not only by seeing your score across topic areas but also by seeing how your body reacts to a six-hour exam-athon.

CFA Institute Mock Exam – how many additional exams?

Hopefully, you already have a few mock exams under your belt but it’s not too late to start. I would recommend doing at least six exams before the last week before the exam. At least a couple of these should be full six-hour exams but you can also do three-hour sets if time is hard to come by. Put your topic-level results in a spreadsheet and track the average and standard deviation of results. This will help build a confidence interval around your overall score and your score within each topic.

From there it is simply a matter of focusing your study plan to improve your performance in select topic areas while maintaining your score in others. As always, look to the released topic weights and make sure you are doing well where it counts most. I always tried going into the exam with an average of at least 80% or better in the core topics and 70% or better in all others.

FinQuiz also provides a web-based test bank and full-length mock exams with its study packages. The FinQuiz test bank includes nearly 5,000 questions created directly from the curriculum and more than 100 item sets. Six mock exams are available for each exam and the level III material includes five additional AM session exams.

Whether you just use the Institute’s materials or a third-party provider’s, you need to know where you stand before the exam. Do not underestimate the effect confidence and stress could have on your test performance. Knowing with confidence that you are doing well on most or all topic areas can be a big boost to your score on June 7th.

If you are not doing so well on your practice exams, don’t get discouraged. Focus your study on the core topics; usually Ethics, FRA and Equity to make sure you get the most points possible. Do several practice exams and you should see your score improve.

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: October 7, 2016 at 3:28 am

CFA Level 1 Passing Score and How to Use It

Candidates will soon be heading to the December exam and questions about CFA Level 1 passing score will follow. While the Institute does not publish the score needed to pass the exams, there are some important lessons to learn from what we do know.

CFA Level 1 Pass rates and CFA Level 1 passing score

When you see your score, it will not be a single point percentage but a range of <50%, 50% to 70% or >70% across each of the topic areas. Not sure exactly why the Institute does this but it doesn’t matter too much, the ranges will serve our purposes here.

CFA Level 1 passing score should not be confused with the exam pass rates which are the percentage of test takers that pass their level exam each year. These have been trending down over the last several decades with less than half of the candidates now passing. Everyone has their own theory on why this is happening but the fact is that these are some tough exams and you’ll need to prepare to do well.

So how many points do I need?

Each multiple choice question on the exams is worth three points with 360 points possible. CFA passing score varies from year to year and is determined after all the exams are graded for a particular level. Since the Institute does not publish an actual passing score, the only thing we do know is that no candidate has ever failed with a score of 70% or higher.

There are two important points that I always tried to remember when taking the exams. First, if I aimed for (and scored) at least 70% on the exams then I would pass the exam. Second, because the actual passing score is adjusted up or down on the distribution of actual scores and approximately 50% of candidates passed the exam, I needed to work harder than the average candidate to come out ahead in CFA Level 1 passing score.

Targeting a score of 70% or higher is something we’ve talked about on the blog. Whether you have a test bank or use end-of-chapter questions (or hopefully both), it’s pretty easy to track your progress and build a confidence interval around your performance. On these practice problems and mock exams, I would aim for something higher than 70% just in case the actual exam questions turned out to be more difficult.

Working harder than the average candidate is not as easily quantifiable. It isn’t that you are competing against other candidates, but you do need to understand that the charter isn’t for the ‘average’ finance professional, it is for those willing to go that extra mile for their career and their clients. While there are not a lot of ‘average’ candidate stats to go on, we know that 300 hours is an average for time spent studying. I would say that the average candidate also waits to start studying until late January, at the earliest.

Pass or fail, your score is more important than you know

The CFA exams are extremely tough and it’s understandable that candidates would want to know exactly what they need to do to pass but your score is more important than just passing the exam.

If the passing score is under 70%, that means candidates can miss almost a third of the information and still be on their way to being charter holders. No one is expecting you to remember 100% but working in the industry carries a great deal of responsibility. Think about it for a second and ask yourself if you would want someone planning your financial future that scored less than two-thirds on their professional exams.

For many candidates, seeing the result of their CFA exam is a sobering experience. Knowing that you scored less than 50% in a topic area should be a wake-up call and guide your studies in the future. I won’t say that I have used the entire curriculum since earning my charter but I have used a great deal of it and am glad for the time I put in to learn it.

I know that passing the exams is the first and last thing on your minds right now, just getting this three-year study-fest over with so you can reap the rewards, but try to remember why you are taking the exams in the first place. The CFA curriculum will make you a stronger professional and will help you for decades after you’ve passed the exams. While a passing score is important, reach higher and be better for it.

‘til next time, happy studyin’
Joseph Hogue, CFA

Last updated: October 7, 2016 at 3:29 am