The essay section of the CFA Level III exam is one of the toughest for candidates but you can use past exams to get an advantage
Ask CFA candidates which is the most difficult part of the Level III exam and they will almost unanimously say the essay morning section. The essay portion of the Level III CFA exam is so widely feared that it shows up as one of the top answers when candidates are asked about the most difficult part of all three exams.
The irony is that the essay portion could end up being one of the easiest parts of the CFA exams. I couldn’t wait to tackle the morning section on the Level III exam because I knew exactly what to expect and that I was going to score big points.
You can go into the third CFA exam with just as much confidence. It all comes down to using one of the best resources made available by the CFA Institute.
When else has the CFA Institute given you the answers?
It’s not even a secret but too many candidates don’t know that the CFA Institute releases the actual morning essay section along with guideline answers. That’s not mock exams or practice tests but the actual essay exams that were given in prior years and the answers that would have gotten you full points.
Normally, the Institute releases the last three years’ exams for download along with a separate download of answers. Click through here for the Level III exam prep page and copies of the past exams. Not only does the page include downloads for the last few years’ essay questions but also a brief summary of the exam structure and timing.
The essay section of the Level III CFA exam consists of between eight to 12 questions, each with between two and five sub-parts. Each question and sub-question can be worth a different amount of points but the entire morning session is worth 180 points.
In no other place does the CFA Institute give you so much help on the exams. Download every previous exam available and use it as a mock exam. Not only will it help you learn the curriculum but you will become more comfortable with the essay section and writing for three-hours straight.
We’ve covered several essay questions from previous exams, click on the Level III posts category and scroll through a few. Since the curriculum changes a little every year, questions from many years ago may not be as relevant so always make sure you check to make sure the LOS of the previous exam’s question is still included in your curriculum.
Focus most of your study on the portfolio management questions, always the first two or three questions on every exam. The LOS and required calculations for these don’t change much and doing really well on these first few questions is going to give you a huge confidence boost for the rest of the exam.
Pay attention to how the guideline answers are structured for the previous exam questions. You can save a lot of time and still get full points if you learn how to express your answer with bullet points.
As with the rest of the CFA exams, follow instructions exactly. If an essay question asks that you list two reasons, only write out two reasons. You will only be graded on the first two reasons (or however many are required) so writing out other answers is a waste of time.
The guideline answers are not necessarily the only answer you could have provided for credit but is just a blueprint of the answer for which the grader was looking. Remember, there is partial credit in the CFA Level III essay portion so write something out for every question. Even if it is a multiple part question and you don’t know all of it, write out what you can and show your calculations. Again, follow directions and show your calculations! Even if you get the final answer wrong, you may still get some points if you were on the right track.
Some of the essay questions will require that you write the answer out directly under the question while others may refer to another page for the answer. PAY ATTENTION HERE! Make sure you follow these directions. I wasn’t paying attention and put the answer to some of my essay questions directly below the question instead of on the appropriate page. Fortunately, I had enough time that I was able to copy the answers to the right page but not everyone is as lucky.
The Level III essay portion of the CFA exam does not have to be as scary as candidates make it out to be. Study the prior exams and take advantage of this huge gift from the Institute. Work at least three of the prior essay exams and you’ll be way ahead of many candidates and ready to tackle the CFA essay exam with all the confidence you need!
‘til next time, happy studyin’
Joseph Hogue, CFA