The CFA examination is conducted at three levels. Clearing the CFA exam is not a cakewalk and requires dedication. Cracking the CFA exam requires a structured preparation plan & strategy. In the article below, Shikha brings some CFA preparation tips to crack the CFA exam. Read on to know more.
CFA preparation tips
CFA preparation tips: Chartered Financial Analyst (CFA) is considered one of the toughest jobs for finance and accounting professionals. Clearing the CFA exam is not an easy task as it is expected by the students to be highly proficient with the financial terms and problems that are beyond their scope. The average CFA pass rate of 10 years for Level 1 has been predicted as 44% only. That is 44 per cent of the candidates who apply for the exam clear it on their first attempt. If you are also planning to appear for the CFA entrance exam can follow certain preparation tips to clear it on the first attempt.
Cracking the CFA exam requires a structured preparation plan and strategy. The key to clearing the CFA exam is preparing for the exam in a structured way while dedicating at least 300 hours to CFA preparation. Read the article below to know a few CFA exam preparation tips.
Also Read: CFA Program: Cost, Curriculum and Difficulty Level
What is the CFA Programme?
Before diving into the exam preparation tips, let us discuss what the CFA programme is all about. This course is offered by the CFA Institute. This institute, located in Charlottesville, is empowered to teach the banking and investment professionals the CBOK or the Candidate Body of Knowledge. The CBOK is designed to test the applicants on different aspects of investment namely economics, corporate finance, financial statement analysis, portfolio analysis, quantitative analysis, investment ethics, alternative investments, etc.
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There is a 90% more chance of getting best college recommendations by sharing preferences.The CFA exam is conducted at three levels. It is after clearing the first level, can the candidate prepare for the other two levels. After clearing all these levels and with four years of experience in professional investment, the candidate is offered the designation of the Chartered accountant or the Chartered Financial analyst.
Q: How tough is the CFA exam? What are important preparation tips for the CFA exam?
Q: What is a "passing score" for the CFA exam?
The "passing score" for the CFA (Chartered Financial Analyst) exam is the Minimum Passing Score (MPS), which is set by the CFA Institute Board of Governors after each exam. The purpose of this approach is to ensure fairness to candidates across administrations, as the difficulty of each exam is taken into account when setting the MPS. The MPS is not made public, and only the candidates who passed the exam will receive an email with their results.
It's important to note that the CFA Institute does not release individual candidate scores or detailed exam scores and responses to exam questions. The results are only available online for approximately one year after the exam date, and candidates who do not pass the exam will be given a detailed summary of their performance.
Q: Can I self-study for the CFA exam?
Yes, of course you can self-study for the CFA exam. Many students prefer to choose this option for preparation because of the flexibility it offers. The CFA insitute provides an official curriculum for each level of the exam. It serves as a comprehensive guide and primary source of study material. You can follow the curriculum independently and study at your own pace.
Besides the CFA Institute curriculum, there are number of other resources available for the CFA study material. These may include guides, sample papers, video lectures, tutorials, etc. You can utilize these resources to supplement your self study efforts and reinforce your understanding of the important topics of the CFA syllabus.
Create an effective study plan that outlines your study schedule, goals and progress. This will help you stay organised and improve time management. You can also engage with online forums and communities and various social media groups dedicated to CFA preparation. These platforms provide the opportunity to connect with fellow candidates, seek clarification, share insights and access additional study resources.
While self-studying is a viable option, keep in mind that the CFA exams are rigorous and the material can be complex. Ensure that you allocate sufficient time, maintain discipline and monitor your progress regularly.
Syllabus of the CFA Program
The Level-I CFA exam syllabus of the CFA program features two exams of approximately three hours duration each. In each of these examinations, about 120 multiple-choice questions will be asked. Though the exact passing percentage is not evident, anecdotal data reveals that the candidate can score more than 67% in the examination, as the minimum pass score. The topics on which the student will be tested are given in the table below:
| Topics of CFA Level 1 | Weightage (in percentage) |
|---|---|
| Ethical and Professional Standards | 15-20 |
| Quantitative Methods | 6-9 |
| Economics | 6-9 |
| Financial Reporting and Analysis | 11-14 |
| Corporate Issuers | 6-9 |
| Portfolio Management | 8-12 |
| Equity Investments | 11-14 |
| Fixed Income | 11-14 |
| Derivatives | 5-8 |
| Alternative Investments | 7-10 |
CFA Exam 2024-25 Important Dates and Events
Check out the table below to know the important and upcoming CFA exam dates and events:
| Event | Dates |
|---|---|
| CFA 2024 Level 1 and Level 2 November Registration Deadline | 07-Aug-2024 |
| CFA 2024 Level 1 and Level 2 November Scheduling Deadline | 13-Aug-2024 |
| CFA Level 1 2024 Exam (August) | 20-Aug-2024 to 26-Aug-2024 |
| CFA 2024 Level 2 Exam (August) | 27-Aug-2024 to 31-Aug-2024 |
| CFA 2024 Level 3 Exam (August) | 16-Aug-2024 to 19-Aug-2024 |
| CFA 2025 February Level 1 & 3 Deadline to Register with Invoice Payment | 28-Sep-2024 |
Also Read: When is the CFA exam? Complete exam schedule
CFA Exam Pattern
While registering for the CFA exam, the students can choose their preferred test centre location. The examination content, the focus of learning and the format of the questions keep increasing in complexity with every passing level. Check below the CFA exam pattern for Level 1 exam:
| Features | Details |
|---|---|
| Total Number of questions | 180 multiple-choice questions (divided equally among two sessions) |
| Duration of the exam | Session 1: 135 minutes Session 2: 135 minutes |
| Negative Marking | No |
| Syllabus | Session 1: Ethics and Professional Standards, Quantitative Methods, Economics and Financial Reporting and Analysis Session 2: Corporate Issuers, Equity, Fixed Income, Derivatives, Portfolio Management and Alternate Investments |
Preparation Tips for CFA Exam Level 1
Before discussing the key important examination tips, let us discuss the general examination approaches for success. One has to be confident with their calculating device and have its basic features at their fingertips to not waste time in calculating. Each of the questions that refers to the financial reporting and analysis is based on IFRS or the International Financial Reporting Standards. If all the questions will be on US GAAP, then it will be specified in the paper. It is mandatory to answer all the questions as there is no negative marking.
Q: What is the weightage of the CFA Level I exam?
The Level I exam covers a broad range of topics, and the weightings can vary slightly from one exam to another. The approximate weightings were as follows:
- Ethics and Professional Standards: 15%
- Quantitative Methods: 10%
- Economics: 10%
- Financial Reporting and Analysis: 15%
- Corporate Finance: 10%
- Equity Investments: 11%
- Fixed Income: 10%
- Derivatives: 6%
- Alternative Investments: 6%
- Portfolio Management and Wealth Planning: 6%
- Quantitative Review: 1%
Q: What is the mode of CFA exam?
The CFA (Chartered Financial Analyst) exams are conducted in a computer-based testing (CBT) format. The transition from paper-based exams to computer-based exams was implemented by CFA Institute to provide a more efficient and secure testing experience for candidates.
Under the CBT format, candidates take the exams on a computer at designated testing centers. The exams are administered over multiple sessions, with each session focusing on specific topics. The CFA Level I exam consists of multiple-choice questions, while the Level II and Level III exams include item-set questions (also known as vignettes) and constructed response (essay) questions.
The CBT format offers several advantages, such as immediate exam results, standardized navigation tools, the ability to mark and review questions, and an enhanced exam security system. Additionally, candidates have the flexibility to choose their preferred exam date within the available testing window.
It's important to note that while the CFA exams are computer-based, they still maintain the same level of rigor and depth in assessing candidates' knowledge and skills in finance and investment management.
Q: Is 65 score enough for passing the CFA exam?
Each level of the CFA exam has its own criteria and passing score. CFA institute sets a MPS which changes with each cycle for the newly registered candidates. Some years test takers will receive an overall CFA score of 65% and fail, and in some years they may receieve a score of 62% and pass. The scoring plays a role in deciding the overall pass score in CFA exam. In general, an overall score of 70% and above will help you pass the CFA exam.
Q: Which is the easiest pathway in CFA exam Level 3?
No pathway will be easier than the other. Each pathway is designed in a way that they are at par with each other. This does not mean that the CFA pass rate will be also be the same between each as many factors influence pass rate such as quality of the cohort, mix of the cohort, difficulty of the given set of questions in a given window, demographic factors, etc.
Q: Which are the most important topics to focus for CFA preparation?
Also Read: What to Expect of CFA Level 1 Exam
According to the CFA Institute and experts, students must dedicate at least 300 hours per level to CFA exam preparation. The CFA Level 1 exam is an introduction to the CFA program and the consecutive levels and the exam is conducted four times a year.
Some of the important CFA examination preparation tips are:
- Study all the topics with due focus and do not omit any topic from the exam preparation list. It is important to leverage one’s efforts in tune with the curriculum of the CFA Institute. Students who focus on too many materials other than the curriculum tend to make mistakes.
- It is important to keep up-to-date with the changing concepts of the financial world and have a keen eye for details.
- Understand the format of all three levels of the CFA examinations. While the Level-I exam is on multiple-choice questions, the Level-II exam has case studies and item-set questions. The Level-III examination has short essay-type questions involving calculations along with item-set questions to be asked in the afternoon session.
- Aspirants have to practice a lot of writing as Level II and III examinations demand a lot of writing by hand.
- As always practice can land you with perfect scores. It is important to repeatedly study every single topic of the curriculum by making a clear timetable. Students have to clear doubt and confusion then and there and revise all the topics before the examination.
- Take a lot of mock tests that are available online and practice with previous years’ papers to approach the examination with confidence and to develop time management skills.
- Students should work on strengthening their memory power and concentration skills as the exam is all about figures and formulas. Studying with concentration along with enough periods of rest and rejuvenation is the key to success in any competitive examination.
Read More: How Hard is the CFA Exam?
With over 7 years of editorial experience, Saumya has been a writer at Shiksha for over four years. With a bachelor's degree in English literature from Delhi University, she loves to write. A true Delhiite and her l... Read Full Bio
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Student Forum
Anything you would want to ask experts?Answered 4 days ago
The major subjects of CFA include Ethical and professional Standards, Quantitative Methods, Economics, Financial Reporting and Analysis, Corporate Finance, Equity Investments, Portfolio Management, Alternative Investments, Derivative, and Fixed Income.
T
Contributor-Level 10
Answered a month ago
The Level 3 CFA Exam is considered by many CFA charterholders as the most challenging due to the amount of time and consideration required to successfully complete the constructed responses. Only about 56% of CFA candidates pass the exam, despite the fact that the Level 3 CFA Exam typically has the
A
Contributor-Level 10
Answered a month ago
The CFA 2024 exam Levels I, II and III will be conducted only in the CBT mode with different time durations and on different dates.
Level I - The Level I exam as per the CFA exam pattern consists of 180 multiple-choice questions. The test is split into two sessions, each session is held for 135 minut
A
Contributor-Level 10
Answered a month ago
The CFA admit card will include the following details:
- Candidate's Name
- CFA Institute ID
- Exam Level
- Reporting Time
- Exam Time
- Venue Address
- Instructions for Exam Day
- Photograph
- Barcode or QR Code
Contributor-Level 10
Answered a month ago
Practical Skills Module in CFA exam was introduced by the CFA Institute as an additional layer in the CFA exam process. PSM or Practical Skills Module is a practical training to provide candidates with hand-on experience for the work environment and application of what they are learning in the curri
Contributor-Level 10
Answered 2 months ago
No, you cannot apply for the CFA Level 2 exam before completing and passing the CFA Level 1 exam. The CFA Program has a strict sequential order. This progression ensures that candidates have a solid understanding of the foundational concepts covered in Level 1 before advancing to the more complex an
Contributor-Level 10
What are the main subjects in CFA?