Just three months remain before the level I exam in December and candidates taking the exam need to kick it into gear. Not having the benefit of hindsight, most candidates do not realize the enormous opportunity they have to make their life easier over the next three years. The level I exam covers the basics of the CFA curriculum, a curriculum that doesn’t really change as you progress through the three exams but definitely gets more detailed and intensive.
Spending a little extra time studying for this first exam will mean a much less stressful level II and III.
Core Topics in the Level I
While you need to spend time studying and learning each study session within the curriculum, there are definitely those where you should focus your study. Below is a table of the approximate topic weights within each exam.
- You need to master the ethics material! You will hear me repeat this across this blog and you will get tired of hearing it from others, but many candidates will still not spend the required time. The ethics material remains relatively constant throughout the three levels and any extra time spent now will pay off big time later. Also, the Institute explicitly says that the ultimate pass decision for candidates with scores close to the pass/fail cutoff is made determined by how well you do on this section. **Do not just read through the material and ‘think’ you are an ethical person and will do well on the exam. The questions on the exam are ambiguous and tricky so you need to do as many practice problems from the book and the question bank to understand how to answer these questions.
- Along with Ethics; Financial Reporting, Equity and Fixed-Income analysis are more than half of the exam. Concentrating on these sections will help you get the maximum points from the smallest amount of curriculum. Further, these sections are developed heavily in the second exam and you will need a good basis from which to build on.
- That said, you really do need to devote yourself to the entire curriculum and the pursuit of the designation. Three years of intense work is miniscule in the grand scheme of things and it will make you a more professional analyst.
There are a million and one websites, products and guides to use for your preparation. Decide on the most effective and highest quality resources then do not spend too much time ‘meta-studying’. Too many candidates spend waste their time ‘studying’ about studying instead of actually attacking the curriculum. Of course, we would love for you to use FinQuiz and to visit the blog a couple of times a week. We’ve received some terrific feedback and are quite proud of our success rate. Whatever your decision, we will be here to help you through and get the most bang for your study time and help you get the designation.
- Study notes are a great compliment to the curriculum but may not necessarily be a substitute for it. Candidates just focusing on a set of study notes will be missing a portion of the points that did not make it into the curriculum. The FinQuiz notes are curriculum-based to guide you and help focus your attention on the most important points.
- Practice problems are, in my opinion, the number one reason that candidates pass or fail. One of my first blog posts covered the concept of active versus passive learning. Many candidates depend largely on passive learning techniques (i.e. reading or watching videos) and assume that they retained the material only to get a nasty wake up about six weeks after the exam. You need to ‘actively’ work problems to retain and learn the material.
- Practice problems can be done through a question bank or by using the end-of-chapter problems in the curriculum, but preferably both (multiple times). Mock exams are also a necessity. These not only give you more practice problems to do but also test your endurance test taking skills. Six hours of exam is not something you just do without training. Like any marathon event, you need to build up for it and condition your mind.
Not only do you have limited time to prepare for this exam, you need to focus your studying because you will get tired and burnt out very quickly otherwise. Spending an extra 5 hours a week on the internet ‘meta-studying’ and trying to use every possible resource out there will drive you crazy (speaking from personal experience here).
Next week, we will look at a concise and focused study program and a few variations depending on how much time you have available per week. Having a program and sticking to it is almost as important as using the right materials. Too many candidates set their program too aggressive and then find themselves getting bored and hating the curriculum by the third week.
Let me know if you have any questions about the exam or the designation. Your success is our success so we’ll do everything we can to get you through to December.
‘Til next time, happy studyin’
Joseph Hogue, CFA