I just heard that one of my favorite undergrads (yes, I do have favorites) just accepted a job offer at a major banking firms (one o0f the ten largest in the country). He's an interesting profile: a so-so GPA (just south of 3.0), that was mostly due being an engineering major his first year and a half before switching to finance. But, he comes across as much better than his GPA - he's really passionate about finance, was president of our local FMA student chapter, and is a heck of a nice guy.
He somehow managed to get an internship at the bank this summer, and totally nailed it. That wasn't surprising, because he always did FAR more work in class than I asked, and always asked for more. He just got the offer (and accepted it ) today, and came into my office to tell me about it about 10 minutes ago. It was a pretty good one - mid 50s , a couple thousand signing bonus, and great benefits.
It just goes to show that internships matter - a lot. After he graduates, he'll be working in a temporary slot at the firm for six months until his training program starts. So, he figures it'll be a good time to knock out the CFA Level 1 exam (did I mention he really likes finance and isn't afraid of extra work?)
CFA etiketine sahip kayıtlar gösteriliyor. Tüm kayıtları göster
CFA etiketine sahip kayıtlar gösteriliyor. Tüm kayıtları göster
10 Eylül 2008 Çarşamba
21 Ağustos 2008 Perşembe
Rocky Balboa and The CFA
I came across analystforum while studying for the Level 1 exam of the CFA. It's a fantastic resource - they have forums for all 3 level, people who pass the various levels continue to post in the forums long after they've passed. If you're taking the exams, sign up - it's free, and worth it's weight in gold.
Results for the CFA exams were just announced, and a number of people who seemed to be locks for passing ended up failing. For others, it was not the first time failing at the exam (I've heard that the average time to completion is 5 years, which means most people that complete the people fail 2+ exams along the way).
In any event, people on the forum were consoling and encouraging those who failed, and one of them linked to a bit of dialog on the movie Rocky Balboa (one of my all-time favorite pictures). It may be the best talk I've ever heard a father give his son:
Of course, it's much better with a South Philly accent.
Results for the CFA exams were just announced, and a number of people who seemed to be locks for passing ended up failing. For others, it was not the first time failing at the exam (I've heard that the average time to completion is 5 years, which means most people that complete the people fail 2+ exams along the way).
In any event, people on the forum were consoling and encouraging those who failed, and one of them linked to a bit of dialog on the movie Rocky Balboa (one of my all-time favorite pictures). It may be the best talk I've ever heard a father give his son:
"Let me tell you something you already know. The world ain't all sunshine and rainbows. It's a very mean and nasty place, and I don't care how tough you are. It will beat you to your knees and keep you there permanently if you let it. You, me or nobody is gonna hit as hard as life.
But it ain't about how hard you hit. It's about how hard you can get hit and keep movin forward. It's about how much you can take and keep movin forward.
That's how winning is done.
Now if you know what you're worth, then go out and get what you're worth. But you gotta be willing to take the hits and not be pointing fingers and saying 'it's because of him, or her, or anybody'. Cowards do that, and that ain't you. You're better than that. "
19 Ağustos 2008 Salı
CFA Level 2 Results
I finally got to the CFA Institute Website for my Level 2 results - of course, the server was overloaded for the first half hour after results were made available. Once again, it wasn't pretty, but I passed. CFAI only gives a very broad idea as to how candidates scored, but based on their report, I scored above 70% on approximately 60% of the material, between 50% and 70% on 25% of the material, and below 50% on the remaining 15% of the material.
But who cares? I passed.
So for now, it's back to research. Here's what's on my plate:
But who cares? I passed.
So for now, it's back to research. Here's what's on my plate:
- Finish two papers that are somewhere between initial results and finished manuscript. They WILL be done by mid-September to submit to a conference. On one, I'm the data guy. On the other, I'll probably do the initial draft.
- Do the final edits on a paper that's previously been rejected and reworked. It should be done by next week to send out to yet another journal
- Finish updating the data set to add another 5 years of data for another paper that was rejected, then redo all the analyses. I get to play "data monkey" on this one too, and my coauthor gets to do the rewrite.
29 Temmuz 2008 Salı
My Students Are Getting Their CFA Level 1 Results
For the first time, I have five students who sat for the CFA Level 1 Exam. Today's the day results are given out.
So far, three have reported in, and two of those passed. Well done, lads.
I have a bet with my Dean that three of the five will pass. So, I need one more out of the two remaining...
update: It's now three out of four (the 4th, who didn;t make it was in the top band of those that failed, so he should make it in December). I guess that means the Dean owes me dinner. Since the overall passing rate is 35%, our initial group of Level 1 test takers have done very well.
Note: if you want to calculate a rough estimate for your score, here's a link to a scoring calculator someone hacked together.
Note: If you want to receive updates, either sign up for email on the right sidebar, or add our RSS feed to your feed reader.
So far, three have reported in, and two of those passed. Well done, lads.
I have a bet with my Dean that three of the five will pass. So, I need one more out of the two remaining...
update: It's now three out of four (the 4th, who didn;t make it was in the top band of those that failed, so he should make it in December). I guess that means the Dean owes me dinner. Since the overall passing rate is 35%, our initial group of Level 1 test takers have done very well.
Note: if you want to calculate a rough estimate for your score, here's a link to a scoring calculator someone hacked together.
Note: If you want to receive updates, either sign up for email on the right sidebar, or add our RSS feed to your feed reader.
12 Haziran 2008 Perşembe
How Do They Determine A Passing Score on The CFA Exams?
Since the CFA June exams are now done, there's a lot of concern as to how CFAI determines a passing score. So, here's a breakdown for Levels 1 and 2:
In the past CFAI used a strictly numeric method of calculating the pass rate - they'd take 70% of the 95th percentile score. So, back in the day, the minimum passing score would be no greater than 70%, and would typically be even less.
Now, their scoring system has a significant subjective component to it. Here's how it works: CFA Institute brings a number of charterholders that they call "Standard Setters" to Charlotte sometime in June. These people then discuss what they think a "minimally qualified" candidate should know (for L1 and L2). CFAI is pretty opaque as to what this actually means, but my understanding is that they look at the exams and come up with "the score".
They refer to what's know as the "Angoff method". If they apply this method in its strictest sense, this would involve each standard setter examining each question and making a subjective determination as to what percentage of well-qualified candidates would answer correctly on the question. For each question, the standard-setters percentages are averaged to get a percentage for that question. The individual question-percentages are then summed to get the passing score (in terms of number of correct answers needed).
So theoretically, the minimum passing score could be above 70%. But according to the scuttlebut on analyst forum, the minimum has likely been below 70% in each year. So, my gut reaction is that a 70% would get it done, and even slightly less.
But that's just a guess on my part.
Note: If you want to receive updates, either sign up for email updates on the right sidebar, or add our RSS feed to your feed reader.
In the past CFAI used a strictly numeric method of calculating the pass rate - they'd take 70% of the 95th percentile score. So, back in the day, the minimum passing score would be no greater than 70%, and would typically be even less.
Now, their scoring system has a significant subjective component to it. Here's how it works: CFA Institute brings a number of charterholders that they call "Standard Setters" to Charlotte sometime in June. These people then discuss what they think a "minimally qualified" candidate should know (for L1 and L2). CFAI is pretty opaque as to what this actually means, but my understanding is that they look at the exams and come up with "the score".
They refer to what's know as the "Angoff method". If they apply this method in its strictest sense, this would involve each standard setter examining each question and making a subjective determination as to what percentage of well-qualified candidates would answer correctly on the question. For each question, the standard-setters percentages are averaged to get a percentage for that question. The individual question-percentages are then summed to get the passing score (in terms of number of correct answers needed).
So theoretically, the minimum passing score could be above 70%. But according to the scuttlebut on analyst forum, the minimum has likely been below 70% in each year. So, my gut reaction is that a 70% would get it done, and even slightly less.
But that's just a guess on my part.
Note: If you want to receive updates, either sign up for email updates on the right sidebar, or add our RSS feed to your feed reader.
10 Haziran 2008 Salı
Let The Second-Guessing Of The CFA Exam Begin!
One of the frustrating parts of taking the CFA exam is that there's between a 6 and 8 week (depending on which level you took) lag from the time you took the exam to the time you get results. So, there's a lot of time for second-guessing, wild mood swings, and so on. Several of my students and I took the exam at the same test center, and we all shot the breeze over lunch. They were all pretty confident after the morning session. I've already talked to one of them this week (yesterday), and he said that right after the exam, he felt pretty good overall.
Now today, he said he's started the second-guessing. I warned my guys about this, but it's still hard to avoid.
I'm a regular reader of (and sometimes contributor to ) AnalystForum. It seems like the same thing is going on there in the Level 2 forum. It's understandable, since the group there is a pretty open one, with a lot of participation (damn! - I wish I could get a bunch like that in MY classes).
But relax, all. What's done is done, and we'll know the results when we know. If we make it, there'll be plenty of time to start studying for the next level. If not, we'll have plenty of time to start plugging the holes in the current one that we'll have to retake.
But it's still hard to wait.
Ah well. In addition to the exam, I also got two rejections this week. Now I have to patch them up and ship them back out so I can stay compliant with Mungo's Rule (see #5-b). And there's more data to torture for new projects.
To the Bat Cave, Robin!
Now today, he said he's started the second-guessing. I warned my guys about this, but it's still hard to avoid.
I'm a regular reader of (and sometimes contributor to ) AnalystForum. It seems like the same thing is going on there in the Level 2 forum. It's understandable, since the group there is a pretty open one, with a lot of participation (damn! - I wish I could get a bunch like that in MY classes).
But relax, all. What's done is done, and we'll know the results when we know. If we make it, there'll be plenty of time to start studying for the next level. If not, we'll have plenty of time to start plugging the holes in the current one that we'll have to retake.
But it's still hard to wait.
Ah well. In addition to the exam, I also got two rejections this week. Now I have to patch them up and ship them back out so I can stay compliant with Mungo's Rule (see #5-b). And there's more data to torture for new projects.
To the Bat Cave, Robin!
8 Haziran 2008 Pazar
Last Minute Fun With The CFA Exam
T'was the night before the CFA exam, and of course the Unknown Son starts complaining loudly of severe stomach pains. Of course, this ended all possibility of any last-minute reviewing. He started vomiting repeatedly, and ended up sleeping in our bed with the Unknown Wife, and I went to the guest bedroom (no way I'd get to sleep with a sick kid in the bed).
I got up early the next morning and went to the exam. Just before heading in, I called home to find out that unknown Son was on his way to the hospital. He was admitted in the morning after tests revealed elevated liver enzymes, which typically indicates some kind of viral thingy in the liver.
Despite concerns in the back of my mind about Unknown Son, the morning session of the exam went surprisingly well - or at least I thought so. The afternoon session, on the other hand, was a different story. The best way to describe it is "They didn't call, they didn't send flowers, and they didn't respect me in the morning." So, I have no clue if I made it over the hump or not.
Ah well, done is done. I headed home, changed, and went to the hospital to relieve U.W. and sleep overnight in Unknown Son's room. At least, I slept from 12 until about 6 - he was more interested in reading me sections of his latest book selection (Diary of A Wimpy Kid). His liver results were more normal today, so he got discharged this afternoon, with follow-up tests for later in the week.
With this behind me, I'm eager to put the books down and get back to research tomorrow. For tonight, it's SLEEP (I already took at two-hour nap this afternoon, and should get a good 10-12 hours in).
I got up early the next morning and went to the exam. Just before heading in, I called home to find out that unknown Son was on his way to the hospital. He was admitted in the morning after tests revealed elevated liver enzymes, which typically indicates some kind of viral thingy in the liver.
Despite concerns in the back of my mind about Unknown Son, the morning session of the exam went surprisingly well - or at least I thought so. The afternoon session, on the other hand, was a different story. The best way to describe it is "They didn't call, they didn't send flowers, and they didn't respect me in the morning." So, I have no clue if I made it over the hump or not.
Ah well, done is done. I headed home, changed, and went to the hospital to relieve U.W. and sleep overnight in Unknown Son's room. At least, I slept from 12 until about 6 - he was more interested in reading me sections of his latest book selection (Diary of A Wimpy Kid). His liver results were more normal today, so he got discharged this afternoon, with follow-up tests for later in the week.
With this behind me, I'm eager to put the books down and get back to research tomorrow. For tonight, it's SLEEP (I already took at two-hour nap this afternoon, and should get a good 10-12 hours in).
2 Haziran 2008 Pazartesi
Another Few CFA Test Taking Tips
It's a time for a break from studying. So, here area few more CFA test-taking tips:
- Accept the facts as a given - In other words, you might think the scenario given in the question is far-fetched or even incorrect. No matter - assume it's true, and work from there.
- Read Carefully! - in particular, watch for negatives and double-negatives. Make sure you pick up words like "least", "most", etc... In fact, you might want to underline them.
- If you work out of order, make sure you fill in the correct bubbles. If you mess up (even if you catch it later), it could cost you a lot of time to fix.
- Read ALL the answer choices - in particular for questions that ask for the "most" or "least" correct. Don't stop at the first seemingly correct one.
- Rephrase the question - sometimes there can be complicated phrasing (see #2 above).
- Underline the relevant facts
- Try to answer the question in your own mind before reading the answer choices.
- Try not to start with ethics - the questions can be lengthy, and can suck up a lot of time.
- If you do start out of order, make sure you enter your answers in the correct parts of the answer sheet (see # 3 above). Doing your "most comfortable" section first makes sense. But I'd recommend against doing the whole exam in this way -- if you do, it's all too easy to get confused. So, it might make more sense to do only one or (at most) two "strong" areas and then just work the rest of the exam in order.
- Some questions can be real time-wasters (like multistage stock valuation ones). If you're pressed for time, mark these and go back later. A real "time waster" can suck up the same amount of time that it would take to tackle 2-3 easier ones.
- Check your answers when you're done.
- Don't change an answer unless you have a good reason.
- Don't panic if you hit a string of hard questions. There are a total of 240 questions on the Level 1 exam and 120 on Level 2. Although CFA Institute is not very clear about the level needed to pass, a 70% should be plenty (and as low as a 65 or so might do it, but that's just a guess on my part with no empirical support). So, keep moving, and don't panic.
- Finally, plan on checking yourself at the 90 minute mark to see how your progress is and check once again with a half-hour left to make sure you haven't left things blank, put answers in the wrong spaces, etc...
Today's CFA Exam Tip
As I continue to grind through the CFA Level 2 material, I'm struck by the number of questions that use a "Which of the following statements is the least true ..." format.
Here's a tip to minimize the chance that you'll misread these types of questions: cross out the "least true " and write in ""Which of the following statements is "FALSE"".
Here's a tip to minimize the chance that you'll misread these types of questions: cross out the "least true " and write in ""Which of the following statements is "FALSE"".
28 Nisan 2008 Pazartesi
An Ethical Weekend
Spent the weekend going through the Ethics material for the CFA Level 2 exam. It's pretty dry, and nary a number in over 200 pages of text. But, the Level 2 exam is weighted about 10% on the exam, so it's got to be done.
Now all I have is a quick review of Portfolio Management (I've gone through it once already, but after 299 pages of Ethics, I needed to see some numbers) and then it's on to Derivatives (for the first time). So, with luck, I should be done with my first pass through the Level 2 material with over 5 weeks to go.
The next topic after Derivatives will be a review of Financial Statement Analysis. Although I've put some time in, it's still my weakest topic, and it could comprise a quarter of the exam.
Now all I have is a quick review of Portfolio Management (I've gone through it once already, but after 299 pages of Ethics, I needed to see some numbers) and then it's on to Derivatives (for the first time). So, with luck, I should be done with my first pass through the Level 2 material with over 5 weeks to go.
The next topic after Derivatives will be a review of Financial Statement Analysis. Although I've put some time in, it's still my weakest topic, and it could comprise a quarter of the exam.
26 Nisan 2008 Cumartesi
The Semester Winds Down
It's that time of the year - I have one more day of classes, followed by final exams. My student-managed investment fund did a bang-up job on their end-of-semester presentation to the advisory board, so that's another big item to cross off the list.
So now all I have to do is write a couple of final exams, grade them and some final projects, and start my summer.
The only downside to the end of the spring semester is that there are always a couple of students who thought they were "graduating seniors" who found out only the second part of the phrase is correct. But for the most part, they already know where they stand.
Now it's on to summer research and studying for the CFA level 2 exam (only 42 days until the big one).
So now all I have to do is write a couple of final exams, grade them and some final projects, and start my summer.
The only downside to the end of the spring semester is that there are always a couple of students who thought they were "graduating seniors" who found out only the second part of the phrase is correct. But for the most part, they already know where they stand.
Now it's on to summer research and studying for the CFA level 2 exam (only 42 days until the big one).
8 Mart 2008 Cumartesi
Down With The Flu
The last couple of years, I've gotten a flu shot every year (I've caught the flu before, and I'll take the minor discomfort of a shot to that any day). Unfortunately, a good number of flu cases this year were from a strain that wasn't covered by the vaccine. The Unknown Family had four of those cases. They're now mostly over it, but I've developed my yearly case of bronchitis as a result. It's funny how the timing worked out - Unknown Son started spiking a fever of 103 Thursday night. Since fevers over 100.5 are cause for concern for cancer patients (with a surgical port and a possibly compromised immune system, infections are a constant concern - if he gets one, it's serious). So, we went to the ER at about 10:00 Thursday night. It turned out to be the flu, which, while not trivial, is far better than infection. In any event, they gave him fluids and antibiotics, and we were back home by 11:00.
Unfortunately, I had to get up the next day at 5:00 to get to the CFA Level 2 accounting review I was taking (it was several hours' drive to the hotel where it was being held). Let's just say that it was a bit difficult focusing in accounting for 16 hours over two days with a sleep deficit and the onset of the flu. Having said that, John Harris' workshop was outstanding. He may well be one of the best instructors I've seen in my life. For anyone with concerns about their grasp of the accounting material, I'd highly recommend him.
After that, I had to fly out of town Monday morning to attend the dissertation defense of one of my students from my previous school (they passed, by the way). After the defense, I spend the afternoon working on a paper with my coauthor (who's also the aforementioned student's major professor). It's always easier to write with both authors in the room, since the give and take is critical.
In any event, I managed to survive the week. The Unknown Family is pretty much over the flu. Unknown Son had low white blood cell counts on Wednesday, so we postponed his weekly chemo until next week. It was likely just an aftereffect of the flu rather than from the chemo, but it's better to be safe in these cases. I still have the bronchitis, which will take another week or two to completely recover from. But on the plus side, the frequent violent coughing spasms have stopped anyone from asking me to volunteer for any new assignments (no one wants to get close enough to ask). So even bronchitis has its upside.
In any event, that's about enough. Unknown Son is watching a movie with a friend, and a friend of Unknown Wife is coming over tonight to babysit. So, we get a rare night out. Woo Hoo!
Unfortunately, I had to get up the next day at 5:00 to get to the CFA Level 2 accounting review I was taking (it was several hours' drive to the hotel where it was being held). Let's just say that it was a bit difficult focusing in accounting for 16 hours over two days with a sleep deficit and the onset of the flu. Having said that, John Harris' workshop was outstanding. He may well be one of the best instructors I've seen in my life. For anyone with concerns about their grasp of the accounting material, I'd highly recommend him.
After that, I had to fly out of town Monday morning to attend the dissertation defense of one of my students from my previous school (they passed, by the way). After the defense, I spend the afternoon working on a paper with my coauthor (who's also the aforementioned student's major professor). It's always easier to write with both authors in the room, since the give and take is critical.
In any event, I managed to survive the week. The Unknown Family is pretty much over the flu. Unknown Son had low white blood cell counts on Wednesday, so we postponed his weekly chemo until next week. It was likely just an aftereffect of the flu rather than from the chemo, but it's better to be safe in these cases. I still have the bronchitis, which will take another week or two to completely recover from. But on the plus side, the frequent violent coughing spasms have stopped anyone from asking me to volunteer for any new assignments (no one wants to get close enough to ask). So even bronchitis has its upside.
In any event, that's about enough. Unknown Son is watching a movie with a friend, and a friend of Unknown Wife is coming over tonight to babysit. So, we get a rare night out. Woo Hoo!
27 Şubat 2008 Çarşamba
Studying Financial Statement Analysis For CFA
This was me tonight going over the intercorporate investments and M&A readings for CFA Level 2
Between this material, the beginning of a virus (the Unknown Wife had a fever of 101-102 earlier this week), and the nuclear strength cough medicine I'm taking (it's the good stuff - with codeine), I was doomed from the start. But then, Accounting by itself is usually enough to put me down...
Between this material, the beginning of a virus (the Unknown Wife had a fever of 101-102 earlier this week), and the nuclear strength cough medicine I'm taking (it's the good stuff - with codeine), I was doomed from the start. But then, Accounting by itself is usually enough to put me down...
26 Ocak 2008 Cumartesi
How To Pass CFA in 50 Days
Since CFA Level 1 scores just came out, a good number of people who passed L! are now beginning to stress about whether they can pass Level 2 with less than 20 weeks of study time. Without a doubt, it'll be tough. But there are some things you can do to maximize your chances of passing.
One of the best resources out there is Analyst Forum. It's an online forum populated by people who are studying for (or have already passed) the various CFA levels. I read it regularly, and you should too - it's absolutely superb.
One poster (BBD) recently shared his strategy on how to pass the exam on limited study time. I've copied it below. I'd also note that (while the poster recommended the Schweser study notes, Stalla also has good material):
While BBD most likely came to the table with a better background than most candidates , a number of his suggestions can be applied (with modification) by almost everyone. Here's what I'd take from it:
One of the best resources out there is Analyst Forum. It's an online forum populated by people who are studying for (or have already passed) the various CFA levels. I read it regularly, and you should too - it's absolutely superb.
One poster (BBD) recently shared his strategy on how to pass the exam on limited study time. I've copied it below. I'd also note that (while the poster recommended the Schweser study notes, Stalla also has good material):
I have learnt several things on this forum during the 3 years I studied for CFA. There were 10 of us who started CFA together and 3 of us completed it 3/3; 4 did not complete the course. I thought I would share some ideas that might help others.Read the whole thing (and the associated comments) here.
The key challenge in CFA is huge volume of material. The subject matter is generally not very complex (except one or two areas like Derivatives or Bonds). If some folks find the complexity to be severe, they need to a) allow more time to studies and b) perhaps reconsider their reasons for doing CFA. For most people with some financial background, volume and not complexity will be the main issue.
To master the challenge posed by volume I suggest the following steps with consideration that only 50 days are left. These steps apply to all levels. In the brackets I note some anecdotes:There is no time left to argue which notes or whether or not to refer to the text books. This is the time to just do it - imagine you are driving at 120mph and focus fully.
- Master the basics - this comprises roughly 50% of the volume. This also represents the easiest marks that you cannot afford to lose. The way to do it is noted in the steps below.
- Get hold of Schweser VCDs. In 2-4 hr sessions you can cover a SS. The lectures give a good overview of the most important points. Jot down the main points in on a note pad as you listen to the CD. [I often found learning new concepts easy by listening to something instead of reading a large amount of text. Also it improved my retention. I bought my set second hand from another friend who also did CFA 3/3 and recommended it highly.]
- Next read the Schweser Secret Sauce. This is a condensed version of all the notes and consists of roughly 200 pages. After listening to the DVDs, it's quick and easy to do it. On average you could cover SS in 1-2hrs. [Make sure you always have the Secret Sauce notes with you. Read these often. They are the basics and you must master it. I read these during my commute, at breakfast etc and knew it inside out]
- Go for the kill - attack all the questions you can find on the SS. These must include all the old exam questions. Do not restrict the questions you answer. You must attempt all the questions you can find. Practise, practise, practise. Some questions you will not be able to answer because you dont know enough of the SS. Don't panic. Follow the step 5 below.
- For the questions you cannot answer, refer to the Schweser notes. Scan through the whole notes, you will already be familiar with most of it by covering the Secret Sauce and VCD, and then focus on the area you find difficult or don't know about.
- With ~2hrs on DVD + 2hrs on Secret Sauce + 4hrs on questions + 2 hrs on weak areas, you can cover a SS in 8 hours. Depending on the time available, you could comfortably cover a SS in 2 days. That was roughly my average. 18 SS took +/- 36 days and the remaining days were for revision.
- Volume can only be mastered by revision. Don't try to learn a SS 100% the first time. If you know 70-80% the first time that is good. You will learn an additional 10-20% the next time round and that will be enough to get through the exam.
- Time management is key. Be very strict on the time spent on one SS. Don't exceed the time on any one SS at the sacrifice of another. Easy marks are available across all SS. [ I know its easier said than done. I too spent much longer on Derivatives than I expected to however that is also because I really enjoyed the subject].
- Make sure you take a break. Let the mind relax. A tense mind makes many mistakes. That is I noted 50 days above - leave some time to relax and do something else.
- D-Day is key. In my opinion the exam day stress management is one of the most important factors in passing or failing. Be relaxed on the exam day. I remember in my L3 exam I made a few silly errors in the morning session. I had many friends in the same exam and we ended up asking how it went during the break. When the mistakes surfaced, I left their company and went to my car and sat with the AC on till the end of the break. This helped me relax and I had a good afternoon session.
While BBD most likely came to the table with a better background than most candidates , a number of his suggestions can be applied (with modification) by almost everyone. Here's what I'd take from it:
- Time and money are substitutes (to a point). If you can afford to spend the money to buy supporting resources (videos, classes, study guides), it will save you time spent studying. In particular, the DVDs from the prep providers can potentially allow you to grasp material much more quickly than you could reading it from the CFAI material alone. Many people get material much more quickly from a lecture than from reading a book. In addition, study guide are a great way to distill the material down. T his doesn't mean that you don't need the CFAI curriculum. In a perfect world, that's all you'd get, and you'd focus solely on the CFAI materials. But it's not a perfect world. As an example, I've signed up for a two-day intensive review course for the FInancial Statemen Analysis material. I'll gladly shell out $500 if it'll save me 30-50 hours of additional study time.
- Major on the majors. Although there's a lot of material, there's a lot of "low hanging fruit" on the exam. At the minimum, you should make sure you get the key concepts in every section.
- Work questions. It's hard to get material down merely by reading material or watching a video. These are essentially passive learning strategies, and they simply don't work - learning is an active, participative exercise. Work as many problems as you can, and answer as many questions as you can. This is one way that prep providers can be really helpful. Both Schweser and Stalla have test banks. While the quality of their questions can vary, answering ANY question can be helpful. In addition, if you're near a local society that gives a mock exam, take it.
- Time Management is critical. Don't shoot for perfect the first time through the material. Since the curriculum is extremely broad, you don't have the luxury of spending too much time on any one section. For your first pass through a given segment, shoot for 60-70% on the questions at the end of each section, then move on. Once you've done every section, go back and brush up. Remember - you're shooting for a B to a B+, not an A.
- If you do have to focus, focus on the "Big" sections. Financial Statement Analysis (now called Financial Reporting and Analysis), Ethics, Fixed Income, and Quantitative Methods count for almost 60% of the level 1 exam, and Equity, FRA and Ethics are about 50% of the L2 exam. If you nail the "Big 4 (for L1)" or "Big 3" for L2, you'll be in good shape. You still have to cover everything (see #4), but if you have extra time, put in extra here.
- Don't neglect any section. Although the "Big 4" (See above) count for a lot of the exam, you only get 20 item sets (with 6 questions each). If you miss one of them, that's 5% off your grade right there. As an example, a lot of the L2 candidates who failed last time around noted that they completely missed an item set on Treynor-Black.
23 Ocak 2008 Çarşamba
CFA Level 1 Results
I got my results from CFA Institute for the Level one exam, and yes, I passed. CFAI doesn't provide detailed results, only whether a given section you scored <> 70% on Financial Statement Analysis (mostly accounting). I had planned on getting only half of that.
Ah well, winning ugly is still winning. My reward is that I now get to start working on Financial Statement Analysis for Level 2 - only 135 days till the exam.
In case you're interested, someone hacked together a crude calculator that converts CFA Institute's crude scoring report into an approximate percentage score. Based on it, I got 74%. Not great, but it passed, and that's all that matters.
Here's the scoring calculator link.
Ah well, winning ugly is still winning. My reward is that I now get to start working on Financial Statement Analysis for Level 2 - only 135 days till the exam.
In case you're interested, someone hacked together a crude calculator that converts CFA Institute's crude scoring report into an approximate percentage score. Based on it, I got 74%. Not great, but it passed, and that's all that matters.
Here's the scoring calculator link.
19 Aralık 2007 Çarşamba
A Good End To The Semester
Teaching can be frustrating, but it has its moments. I just ran into one of my best students - 3.9 GPA, got a CFA scholarship, is doing an honors project, etc...
Since he's planning on taking the CFA Level 1 Exam in June, he had some questions about how best to get started on the material. So, we talked for about a half hour, and I lent him my study notes so he could get started over the break (he hasn't yet gotten his material from Schweser and CFA Institute).
I wouldn't be surprised if he has the Accounting and Ethics sections (and probably the Quantitative Methods) of the CFA material locked down before he gets back from Christmas break.
If only I had a classroom full of students like him. But that would be too easy.
Since he's planning on taking the CFA Level 1 Exam in June, he had some questions about how best to get started on the material. So, we talked for about a half hour, and I lent him my study notes so he could get started over the break (he hasn't yet gotten his material from Schweser and CFA Institute).
I wouldn't be surprised if he has the Accounting and Ethics sections (and probably the Quantitative Methods) of the CFA material locked down before he gets back from Christmas break.
If only I had a classroom full of students like him. But that would be too easy.
9 Aralık 2007 Pazar
Another Online CFA Resource
A surprising number of folks find Financial Rounds when searching about CFA related information. So, whenever I find information that might be helpful to those making the slog towards the designation, I'll post it here.
I was looking through my Sitemeter log, and I came across a number of hits from people who'd recently visited AnalystForum.Com. So, I checked it out. If you're working towards your charter, it's definitely worth a look-see. They have a number of online forums - one for each exam level, and a general one for everything else. There's a lot of information there, and a very open group of folks who are extremely willing to answer questons. And it looks like a great way to get linked in to a community of like-minded folks (and networking is always useful).
I was looking through my Sitemeter log, and I came across a number of hits from people who'd recently visited AnalystForum.Com. So, I checked it out. If you're working towards your charter, it's definitely worth a look-see. They have a number of online forums - one for each exam level, and a general one for everything else. There's a lot of information there, and a very open group of folks who are extremely willing to answer questons. And it looks like a great way to get linked in to a community of like-minded folks (and networking is always useful).
8 Aralık 2007 Cumartesi
CFA At Unknown University
This seems to be the season for things CFA-related. I've just seen the pool of students who've applied for CFA scholarships from Unknown University. We had eight apply, and the weakest of the bunch has a 3.4 GPA (and there's one student who's a finance undergrad currently getting a Masters in Accounting - definitely a plus when dealing with all the Financial Statement Analysis/ Accounting material on the exam).
So, I think we'll be able to pick five extremely good candidates. We also just found out that the local CFA chapter has a few additional scholarships to award, and that they'll be happy to let us do the initial sorting for the scholarships.
I'm particularly happy that seven of the eight applicants for the scholarships are my current or former students (one took me for three separate classes). So, they actually listened to some of what I'd been saying all semester.
On a somewhat related note, this Wall Street Journal article details the lengths that CFA candidates go to take the exam in India. And here I was worried that I had to drive a couple of hours to take it myself.
So, I think we'll be able to pick five extremely good candidates. We also just found out that the local CFA chapter has a few additional scholarships to award, and that they'll be happy to let us do the initial sorting for the scholarships.
I'm particularly happy that seven of the eight applicants for the scholarships are my current or former students (one took me for three separate classes). So, they actually listened to some of what I'd been saying all semester.
On a somewhat related note, this Wall Street Journal article details the lengths that CFA candidates go to take the exam in India. And here I was worried that I had to drive a couple of hours to take it myself.
1 Aralık 2007 Cumartesi
CFA Level 1
I took the CFA level 1 exam today. It was an interesting experience, and the first exam I'd taken in ten years.
At one time or another, I'd taught approximately half of the material on the exam (Study Sessions 2, 3, 11, 12, 13,14, and 18). But unfortunately, I put off studying for the remaining parts until about 1 week and a half ago). And there is a LOT of material in the Accounting and Econ sections, much of which is pretty involved. Luckily, people from my "tribe" (Ph.D-holding , alpha-nerd types) are typically pretty good at processing and retaining large amounts of material, and quickly.
I think I did fairly well - of the 120 questions in each session, there were probably 10 for which I had no clue and another 10-15 for which I was able to eliminate two of the four answers. For what it's worth, I finished the morning session a half hour early, and the afternoon session about an hour early. And this includes checking answers (I've always worked fast on tests).
Now I just have to wait until January/February to get results.
Ironically, now that I'm back at the Unknown Household, the next thing on my plate is to write about a half-dozen recommendation letters for students who've applied for Unknown University's CFA Scholarships (I also sit on the committee that makes the decisions, BTW). We give out five, and the local CFA chapter also has a few to hand out. It's a great deal for the students - it cuts the effective cost for the first exam from almost a grand to about $200, and also allows them to get study guides from one of the major test-prep vendors for $100 versus the usual $500 cost.
Since it's fresh in my mind, here are a few study tips to those studying for the exam in June. Realize that the suggestions are free (and probably either fairly priced or even a bit overvalued):
Of course, when results are in, you'll be among the first to know.
At one time or another, I'd taught approximately half of the material on the exam (Study Sessions 2, 3, 11, 12, 13,14, and 18). But unfortunately, I put off studying for the remaining parts until about 1 week and a half ago). And there is a LOT of material in the Accounting and Econ sections, much of which is pretty involved. Luckily, people from my "tribe" (Ph.D-holding , alpha-nerd types) are typically pretty good at processing and retaining large amounts of material, and quickly.
I think I did fairly well - of the 120 questions in each session, there were probably 10 for which I had no clue and another 10-15 for which I was able to eliminate two of the four answers. For what it's worth, I finished the morning session a half hour early, and the afternoon session about an hour early. And this includes checking answers (I've always worked fast on tests).
Now I just have to wait until January/February to get results.
Ironically, now that I'm back at the Unknown Household, the next thing on my plate is to write about a half-dozen recommendation letters for students who've applied for Unknown University's CFA Scholarships (I also sit on the committee that makes the decisions, BTW). We give out five, and the local CFA chapter also has a few to hand out. It's a great deal for the students - it cuts the effective cost for the first exam from almost a grand to about $200, and also allows them to get study guides from one of the major test-prep vendors for $100 versus the usual $500 cost.
Since it's fresh in my mind, here are a few study tips to those studying for the exam in June. Realize that the suggestions are free (and probably either fairly priced or even a bit overvalued):
- Start early - the material isn't that difficult, but there is a lot of it. A LOT.
- As much as is feasible, spend at least a little time studying every day. If you have a study guide (i.e. Schweser's or Stalla's), keep one of the books with you at all times and try to squeeze in a half hour here and there - these little sessions help. If you're diligent, you can probably get in 5 or so hours a week just by filling in the down time that comes with many people's days (i.e. lunch, commuting on the train, etc).
- Work as many of the problems as you can well in advance of the exam (See #1). Much of the material is algorithmic, and you only learn algorithmic material by working through problems.
- When you work a problem, first try it "cold" (after reading the relevent material, of course). If you don't have a clue, review the material and then try it.
- Don't cheat by looking at the solutions until you've worked the problem - you learn more by finding out WHY your answer was wrong than by seeing the correct answer first.
- As a final thought on working problems, don't try to study by memorizing practice problems. By all means work them, but mostly as diagnostics. Get the material down first, then work as many problems as possible, but memorizing solutions isn't going to cut it.
- Get a study guide - both Schweser and Stalla have good ones (IMHO, Schweser's is better).
- Plan your studying so that you finish all your preparation with a couple of weeks left before the exam.
- Realize that even if you plan to be ahead of the schedule (see #8), stuff happens. So try to arrange things so that you have the last week or two before the exam largely free for final cramming. No matter how much time you put in ahead of time, you'll need the last week or two for final preparations.
- Schweser has a great book called Secret Sauce that has a lot of helpful tips for that final polishing).
Of course, when results are in, you'll be among the first to know.
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