How hard is CFA Level-I exam?

CFA is considered to be one of the toughest exams in the Finance stream. However, hard work and a proper study plan can help you crack the exam in the very first attempt. Here are certain tips that could help you clear the CFA Level-I exam. 

Every year, the number of students appearing for the Chartered Financial Analyst examination across the world is in lakhs. However, it is a known fact that almost half of them fail to clear the exam, while some of them do not appear for the exam at all. This means only a minority of percentage of appearing candidates clear the exam. According to data available with the CFA Insititute, of the total students that appeared for the Level-I exam across the globe in 2018, only 43 per cent passed the exam.

This brings us to the question: How tough is the CFA Exam Level-I? 

Why students fail to clear CFA exam?

Some common reasons why people fail to clear the CFA exam apart from its difficulty level are:

• They fail to concentrate and study for a minimum of 300 hours with each subject at every level
• The candidates fail to follow a strategic study approach
• They limit their source of study material
• The candidate does not pay attention to the important or the difficult topics
• The students failed to follow a systematic study plan
• The candidates do not practice enough mock tests and previous years question papers

To become a certified chartered accountant, every candidate has to pass all the three levels of the examination and have completed four years of work experience as an investment banker or in other finance backgrounds.

There are no limits for the candidate to appear for the examination, but each of the exam attempts demands an additional 300 hours of study. This additional study period is what that keeps candidates away from continuing the course after losing at any of the levels. The candidates should have the right plan and follow a disciplined approach to clear all the level exams in minimal attempts.

Read more: CFA Exam Dates

How scoring is done in CFA exam?

One standard strategy to clear the CFA Level-I exam is to practice lots of mock tests and doing them under timed conditions. One common difficulty that the majority of the CFA aspirants state is that the CFA Institute does not explain clearly what constitutes a pass and what constitutes a fail in the final examinations. To clear the examination, the candidate must have a minimum net passing score. This score is never given and keeps varying from one year to another. It depends on the difficulty level of the paper and how other participants perform in the examination.

When CFA works on the minimum passing score of the examination, it uses a strategy known as the standard-setting method to determine the standard passing score. A set of charter holders of the CFA sit down and work out on the scoring strategy. They take into account the difficulty level of the question paper and how easy it would have been to clear the test.

Also, the marks allocated in the different topics are different as they follow different mark allocation strategies. A good performance in any one section of the question paper will never compensate for the section that has not been well done in the exam. In short, students who do not clear the exam do not have any idea on why they did not clear the examination.

The performance of the candidate in the ethics section of the question paper plays a significant role in their pass and fail decision as the institute follows a theory known as the ethics adjustment. It is the policy of the CFA to not reveal the minimum passing score or the individual scores of the candidate in eh final examination.

How difficult is the CFA Exam Syllabus?

The exam is for six hours but the syllabus is pretty vast as an ocean. Students are expected to prepare on every paper and every single topic of the syllabus starting from professional standards to equity investments and corporate finance. And each of these subjects’ demand 300+ exclusive study hours. The books and the study material about the exam syllabus will be offered by the CFA. But this alone may not be enough and students should make use of alternative preparative materials such as study modules, video sources, online quiz, and mock test, etc., to enhance one’s ability to clear the test easily. 

How difficult is the CFA Exam Question Paper?

The exam question paper is purposefully made difficult and tricky to help the candidate think from the bottom of their brain. The CFA examination has both subjective and objective questions based on the newest curriculum. The candidate should be a shift and precise in clearing the objective type questions and also present the essays and item set questions with utmost legibility and accuracy.

In the objective type questions, only three options are given to choose the best answer and in the majority of the questions the two probable options are ‘all of the above’ and none of the above’. So it demands the candidate be extremely thorough with the basic concepts and apply them wisely during the exam.