How to Pass the CFA Level 1 Exam
For those in finance, the CFA charter is considered the most prestigious designation one can earn. To say the least, level 1 is challenging. However, as ~35-40% of test-takers show, it is passable. Different study methods have worked for a variety of people, but there are a few things that prove to increase your success rate.
- Difficulty:
- Challenging
Instructions
Things You'll Need
- CFA curriculum
- 3rd party study notes
- Internet connection
- A lot of spare time
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1
SIGN UP EARLY. I suggest signing up at least before the first deadline, if for no other reason than to save some money. This will also ensure that you'll have enough time to properly prepare.
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2
BUY 3RD PARTY STUDY NOTES, SUCH AS SCHWESER OR STALLA. The material from the CFAI is pulled straight from text books and tends to be long-winded and time consuming. 3rd party notes are focused purely on the teaching you the Learning Outcome Statements (the basis for the test).
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3
JOIN ANALYSTFORUM.COM. This is a message board specifically for CFA candidates and charterholders. In my opinion, the site is almost as valuable as the curriculum to passing the exam. *Note: analystforum.com should not be considered a substitute for studying the curriculum.
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START WITH THE TOPIC THAT INTERESTS YOU THE MOST. If you think that studying derivatives sounds interesting, start with studying derivatives. If you do this, you're more likely to enjoy the reading, rather than having the feeling of being forced to read - much like when you were forced to read the "classic novels" in high school.
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CONTINUOUSLY REVIEW ALL OF THE MATERIAL YOU HAVE COVERED TO DATE. A major concern with candidates is forgetting information that they covered a month or two ago. This is another area where the 3rd party notes come in handy. Both Schweser and Stalla offer a large inventory of practice questions. I recommend spending at least an hour each week reviewing everything you've covered to date.
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TRACK YOUR STUDYING. I've noticed that people think they have studied many more hours than they actually have. That is, unless they actively track how much they have studied, which gives them a false sense of safety and accomplishment. A simple Excel spreadsheet will work to keep yourself on track and humble.
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7
DON'T USE STUDY HOURS AS YOUR ONLY MEASURE OF PROGRESS. Some people will pass level 1 by studying 100 hours, while some will need 400 hours to master the curriculum. The key is studying enough to be able to answer any question in under 1.5 minutes. Taking practice exams will give you a good proxy for your progress.
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TAKE FULL PRACTICE EXAMS TO IDENTIFY WEAK AREAS. CFAI offers a few practice exams, which often contain verbatim exam questions. The 3rd party providers also offer full practice exams. After you have covered all of the required material, take a full exam to identify your weak areas. Go back and review those areas before taking another exam.
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9
DON'T CRAM. If you have been diligent about studying for the past several months, cramming won't help too much. In fact, staying up late to cram the night before the exam is likely to hurt through sleep deprivation.
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1
Tips & Warnings
Adjust your studying of a topic to the weight it is given in the exam. For example, if ethics is 15% of the exam, try to spend 15% of your time studying ethics.
Don't ignore ethics. Many people don't cover ethics well enough. If you study properly, this 15% should be a gimme.
Be sure to eat properly and exercise. When you're working 50-70 hours each week and then studying an additional 10-20, it's easy to ignore working out and start eating junk food.
Do not underestimate the difficulty of the exam. Even though it's considered the easiest of the three CFA exams, it still covers a wide variety of difficult topics.
How much you will have to study is going to depend on a variety of factors, including your academic background, work experience, general intelligence, etc. CFAI recommends at least 250 hours, though.
