Thanks for the post Professor. I am giving the exam in Dec'08 and will surely gain a lot by your tips. Gratitude again.
Nilesh:
The exam breakdown has typically been about 30-40% quantitative (i.e. problems) and the rest conceptual, factual, or otherwise non-quant material.
CFA Institute does not reveal what the minimum passing score is. They set the MPS each year using what's called a "Modified Angoff" method (essentially, a group of charterholders sets the MPS each time around). But the folk wisdom in the past has been that a 70% should be enough.
Hi,
I am planning to give CFA level 1 in December 09. I started studying Schweser notes just a week back. They have total 5 notes guides covering 18 sessions. I am currently at session 3 and plan to finish all 18 sessions by Sept. 3rd week and then start giving mock up exams and continuous revision. I wanted to ask how much importance is given on mathematical questions in the exam? Also, how many questions do I need to answer correct in order to pass the exam?
Thank you for any help..
ps - great blog!
Definitely better than doing an MBA, much better ROI! I thankfully finished this time last year and I'm enjoying my spring. Best of luck to everyone!
well guys.. this is a bit discouraging.. I have an MBA and thinking of doing either another Masters in economics or the CFA.. do I have to be genius to pass the CFA or I can study well and understand the Materials in order to pass it..
Thank you.
Did you pass Professor?
CFA doesn't allow candidates to keep the exam. Even if I could get a copy, that would be an Ethics violation to circulate it. If you're studying for the exam I'd recommend taking the mock exams offered by CFAI, and also those from Schweser, Stalla, or the Boston Society of Security Analysts. Of course, they charge for them, but it's worth the cost.
Good luck in your studies.
hi
i read ur blog. iam giving CFA level 1 in Dec08 i wanna to see previous years papers do u have it. plz. mail me on seema2312@gmail.com
thanx
tc
Hi!
Very interesting. Did you pass btw?
I am giving the exams in less than two weeks.
I am giving the sample exams of Schweser. Wanted to ask.... did you feel those exams had a bit of errors?
can you tell me on average what you used to score out of 120?
I am currently getting 60-80% correct. and its giving me the creeps!
Zahra
I passed
I took an unconventional way (not advised). I started studying in September while working in a full-time position. I switched to part-time for October and November. I worked very hard...I am sure I would have surpassed 300 hrs easily (from 5 hrs daily I build it up to 10 hrs daily!). I revised the readings thrice but wasn't able to revise derivatives and alternative investments enough (I took the risk).
I didn't have ANY finance background; I never even knew what dividend meant: D but I loved every bit of finance. Plus I studied all on my own!
The result it out in less than 2 weeks. I really really want to pass!!!!
Unknown Prof - Great info. Thank you. I am still debating whether to take it or not. On one hand it will be a great resume booster I believe, but on other hand, it takes 3 years (which isn't guaranteed) and if I don't currently have a position that qualifies as work experience during the next three years I will not be able to become a member until I accumlate the 4 years needed.
I tried to get an answer out of the CFA, as to whether they can tell me if my current employment will qualify. I haven't really gotten a straight answer as of yet. Lots of decisions. Oh well!
Scott:
I'm not sure if it would be as valuable as an MBA from a top university. Level 1 by itself definitely isn't. But I do know it opens doors. My sense is that even passing Level 1 makes a resume stand out. Passing Level 2 is even more significant (it's typically the "weed out" exam - the recen t pass rate for level 3 was about 50%). And it's posible to get the designation in a fairly short time (two years if you go three for three on the June cycle - take level 1 in June, level 2 the following June, and level three the following.)
In Europe, many (if not most) analyst job ads list it as a requirement.
These are some great tips. What I really want to know though is how all of these will boil down in the real world. Is it on the same level as an MBA? What is the starting salary? The kicker I see is the employment credentials one needs to actually become a member?
Raj:
According to the CFA Institute, it takes about 200-250 hours of studying. If you have a very good grounding in finance, it could be nearer the low end. If not, plan on the higher end (if not more). The study time can be lessened by using a good study guide - Schweser and Stalla seem to be the biggest players (I used the Schweser material BTW. While they don't replace the FCA curricular materials, they make a great supplemental resource - they really boil the material down to a more manageable form). Their layout is also pretty good - they first present the LOS (Learning Objective Statement) then the material needed to master it.
As for when to start, I'd start ASAP - the new Learning Objectivs have been posted, so the field of play (so to speak) has been defined. This will allow you to space things out more, and really work on your weak parts. You can also review things more times.
Good luck.
Good morning M (& unknown prof.),
I am an engineer who decided to go for a Ph.D. in Finance, so I can give you some information from my experience. I have a BSEE and an M.Eng.ME, and no formal finance education. I just started classes this fall.
I had considered an MBA, but the Ph.D. programs looked very interesting. I enjoyed the research papers I had read, and the idea of an academic career, and my GMAT score was very high, so I applied to a few Ph.D. programs. I got accepted to one school (no easy trick), so my wife and I quit our jobs, and we packed up the family to pursue our new adventure. I expected to receive a top-notch education that would prepare me for an interesting new career that appeared to be higher-paying and more secure (my previous company had been going through a series of layoffs over the years.)
So far, it has actually been quite disappointing. I signed up to learn finance. However, all the first year classes are in Microeconomics. The idea is that Finance is a branch of Micro, so the Micro background is the place to start. The problem is, the Micro education sucks.
I expected to receive a practical education, geared towards preparing students to conduct research. So, I expected the theory to be presented with an explanation of how it is applied in real life. I also expected the education to be geared towards real applications; that is, we would no longer make the unrealistic assumptions that are used to simplify things for undergrads.
Instead, it is unrealistic assumptions with a vengeance. It is the same material presented to undergrads, buried under mind-numbing algebra and calculus. It is either over-complicating the obvious (It took us eight weeks to conclude that "profit = revenue - costs", and that individuals try to maximize utility and minimize costs), or "proving" the absurd (with enough stupid assumptions, we basically "proved" the merits of Communism vs. Capitalism. I think we "proved" the merits of organized crime as well.).
In Econometrics, we haven't learned a thing about the statistical computer packages used in analysis, or discussed one bit about how econometric techniques are used in research, but we did conclude a three-week topic with the professor inadvertently admitting that everything we just covered was basically useless. I haven't figured out how I will ever use any of this information. Some of the Econ Ph.D. students have said that older students and some professors have told them that they will basically never use any of this. So what is the point, I ask?
The absolute worst part, however, is that the classes are all lecturing, not teaching. Intelligent thought is discouraged, disagreement is forbidden. It is just "sit down, shut up, and memorize." We asked one professor if he could provide some practical examples; he refused. When I tried arguing a point with another professor, he dismissed me with "You are wrong. Think about it." The
Thanks for the post! I found this really helpful.
I plan to write in June. I was wondering if you could provide some insight for me:
How early should we start (i.e. How many months) and roughly how many hours would you say is required per week? My job requires long hours, and I would need to budget my time accordingly.
Again, thanks for the post and I enjoy your blog!
You mean when you get your PhD in a topic and then become a Professor you don't know everything? I work in engineering and am continually taking grad level classes part-time (have MEng in Mechanical Eng and am now working on an MS in Electrical Eng) and it never ceases to amaze me how much material there is to learn. No matter what topic you choose it can be expanded into the most minute of details. So you always feel like you are just skimming the tree tops so to speak. I guess that is what the PhD is for, but that can narrow your job options and has a big opportunity cost for someone my age (and salary).
By the way I found your blog a while ago (and continue to read regularly - as an older student I appreciate what you say about students) while contemplating what other careers would pay better than engineering yet still be quantitative (i.e. not everyone is smart enough to do it). I have considered the MBA route, then found some info about B-school professor salaries, then found your blog. Seems like a good gig if you can get it.
Time to stop procrastinating and get back to a lab report that isn't writing itself.
-M
You mean when you get your PhD in a topic and then become a Professor you don't know everything? I work in engineering and am continually taking grad level classes part-time (have MEng in Mechanical Eng and am now working on an MS in Electrical Eng) and it never ceases to amaze me how much material there is to learn. No matter what topic you choose it can be expanded into the most minute of details. So you always feel like you are just skimming the tree tops so to speak. I guess that is what the PhD is for, but that can narrow your job options and has a big opportunity cost for someone my age (and salary).
By the way I found your blog a while ago (and continue to read regularly - as an older student I appreciate what you say about students) while contemplating what other careers would pay better than engineering yet still be quantitative (i.e. not everyone is smart enough to do it). I have considered the MBA route, then found some info about B-school professor salaries, then found your blog. Seems like a good gig if you can get it.
Time to stop procrastinating and get back to a lab report that isn't writing itself.
-M
Frank:
We will have students graduating (undergrad) this spring who plan on taking the Level 1 exam in June. So if you can start in your senior year, I think it's possible (not easy, but definitely possible).
One of the advantages of taking it early is that it sends a very strong signal to employers. It's pretty well known that the exam can be tough - there's about a 40% pass rate. And that's only for the 80% who show up (about 20% no-show each time. So, the "actual" pass rate (out of 100 who sign up) is (1-.2)(0.4) = 32% (i.e. only about 30-35 out of a hundred wh SIGN UP for the exam end up passing.
At what level would you advise those in the pursuit of the CFA to begin studying (undergraduate, graduate, post 2-years experience, longer)?
Thanks for the post!
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