Wednesday, July 30, 2008

CFA preparation guidelines for level 1

Hi friends,
I had taken my CFA level 1 exam on June 08 and thought that my insight and perceptions on level 1 could help you all prepare better for the exam.

* CFA material is pretty voluminous that’s probably because it’s designed to be a 6 month course.

* Schwezer material is much more precise and more than enough for level 1

* CFA material or Schwezer material alone is not enough, you will need the full length question papers and question bank.

* If you are able to solve about 2000 questions, then you should feel confident on giving the exam

* The examination focuses on application of the concepts.

* The problems are pretty simple if u know how to solve them, there would be no lengthy or complex calculations.

* There are totally 10 sections and its better if you show competence in all the sections. (i.e) score at least 50% of marks in each section. Else you may have to cover if it up in other sections.

* The total time given for examination is 6 hours which is split up into two sessions of 3 hours each.

* There are totally 240 questions and the weightage for each question varies. Each session carries 120 questions.

* You can attempt the questions that you are comfortable with first and then come back to other questions.

* I would recommend solving the ethics questions in the end since they are the lengthy questions and would consume more time to read through them.

* Though 6 hours are given for the examination, all the questions can be pretty much solved within 5 hours if you had done a perfect exam oriented preparation.

* If you have done your MBA in Finance or PG in Capital Markets then you should feel comfortable with a max of 2 to 3 months of preparation.

* Try to have the last month solely to solve problems, so that you go into the exam on the right mode.

* If you make an effort and clear the NCFM (NSE’s certification in Financial Markets) modules ( namely the Derivatives market and Debt market before your CFA preparation then it would actually make your preparation much easier.

* On an average about 30 – 35% of pple clear the level 1 examination, I do have a doubt as to how it can always to be only that much or only in that range. So it’s obvious that you need to be at least in the 70 percentile range to get through.

Outline of CFA Course

As a CFA Program candidate, your course of study is determined by the Candidate Body of Knowledge™ (CBOK). The course includes

* Ethical and professional standards
* Quantitaive methods
* Economics
* Financial statement analysis
* Corporate finance
* Analysis of equity investments
* Analysis of debt investments
* Analysis of derivatives
* Analysis of alternative investments
* Portfolio management

Some popular CFA preparation forums

* AnalystForum
* CoolAvenues
* FTC Kalpan
* AnalystNotes
* FinancialExams
* FinancialCertification

Free online CFA Mock Exams


Important CFA Video Links


All the very best.


mpushkar said...

this is not true

"* There are totally 10 sections and you need to show competence in all the sections. (i.e) you need to score at least 50% of marks in each section."

one can score zero in Alternative Investments and pass

this just one example

other things are fine

optimismattheheights said...

Well.. I would have never taken up CFA.. i just imagined wat if i would have..
But i think u have scared me enuf that i ll never imagine abt anything.. Hehhe

Well good attempt to help ppl who have similar insights.. :)
keep it up

ketki said...

Wow! U have a wonderful blog out here!
one of the best blogs i have ever read!
especially the quotes, loved them!
keep writting!

Vivek said...

this is a good blog n d information u provided was quite sufficient so keep posting n thnx for d posting

optimismattheheights said...

dude u bribe others to write comments.. how come u don gimme anything...

Saklen said...

Manoj, hope all is well.

Maybe I should have posted this as a comment on the blog but in any case, would like to know how many hours would you recommend daily if you have a 3 month horizon to prepare for level 1.

I appreciate you taking out the time to reply.

In any case,
Much Thanks


Manoj said...

Hi Saklen,

Well, firstly am glad that my blog has been useful to u.

Coming to ur question, the number of hours greatly depends on which field u r working on. If you are a finance chap then you would get the orientation much faster but if u r not then am afraid, u will have to do some grind in more hours.

Normally, whoever be the chap, from whatever field, it would take about 3 to 3 1/2 months of preparation to hit the exam with a lot of confidence and ppl on an average push in 3 hours on weekdays and about 6 to 7 hours on weekends. So if u consider that sort of a preparation on a 3 month horizon and lets assume there are just 12 weeks in it then on totality you would be doing 60 * 3 = 180 hours (weekdays) and 24 * 6.5 = 156 hours (weekends) and that would make it a minimum 336 hours of preparation in total .

Whatever be your preparation method, its highly imperative that you finish ur theory part one month ahead and have the last month solely to workout all the problems.

I wish u all the very best.


Saklen said...

Hi Manoj:

Thanks for your prompt reply, really appreciate you spending time on this.

I worked a similar hourly plan and it seems to be just about fitting, considering the 350hrs(approx) target. I work full time as a financial analyst, so weekdays are packed. You mentioned though to leave 1 month for working out the exam papers etc. Is this included in our total hour plan(350hrs) or is it over and beyond.

Please throw some light. I read that you work as a Trader, which is interesting. Where are you located.

Thanks Again,


Manoj said...

Hey Saklan,

Well its really good that u r a financial analyst, it will help ur cause.

On your question, the 336 hours is the total no. of hours and the last month is included in it. I really cant say how many hours you will need to spend, just on working out problems since it depends on ur understanding of the concepts.

By the way, Initially, i was working as a trader in kotak securities limited and now am into free lancing and do trading independently in a sub broking firm of Mangal kesav securities limited at Chennai.


Shyamli Rai said...

some the few best quotes i ever came across...

Anonymous said...

Hi Manoj,
The site is very informative. I had a question regardng CFA preparation.
I am an software engineer and I am interested in become a finance professional. I want to know how much time a person like me would require to prepare for CFA Level 1 exam.
Also would wan to know the approach I should follow for preparation of the same.


Manoj said...

hey sathish .. pls check the comments by a few ppl before u .. they ve asked the same question as urs and i ve replied to those questions ..

Anonymous said...

Hi Manoj,
Thanks for the reply. I also wanted to know speciafically the approach to preparation.

I do not have any background in anything related to finance and thus wanted to know the approach towards the preparation. Some people told me that just going through the schewezer or stalla material might be good enough

My objective is twofold:
1. Build expertise in finance so that I can smoothly switch to finance as a career.
2. Get CFA certification

To me getting the required knowledge is as important as getting the certification

I have kept a time horizon of 2-3 years for achieving this.

Should i enroll in some course to achieve this or self preparation is enough

Any inputs would be very much appreciated.


Anonymous said...

Your blog keeps getting better and better! Your older articles are not as good as newer ones you have a lot more creativity and originality now keep it up!

Anonymous said...

Nice article as for me. I'd like to read something more about that topic. Thanks for sharing that info.

Anonymous said...

You have to express more your opinion to attract more readers, because just a video or plain text without any personal approach is not that valuable. But it is just form my point of view

Anonymous said...

You have to express more your opinion to attract more readers, because just a video or plain text without any personal approach is not that valuable. But it is just form my point of view

Anonymous said...

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divya said...

Hi manoj
Your guidelines are really informative but can you tell us about the tutors or coaching centers present in India and specifically in kaplan schweser really good?And will it be enough to depend on this alone?

Manoj said...

Hi Divya,

schweser is enough for all 3 levels, i have few friends of mine who have cleared all three levels using only schweser. So i would say that its enough though u can always learn from original CFA material if u want to have a deeper understanding with a lot of examples.

But reading from original CFA materail will definitely be time consuming.

There are quiet a few training centers in Mumbai and Bangalore. But am not sure if there is a good traning center in hyderabad.


Srinivaas said...

Hi Manoj,

This is Srinivaas from Chennai. Read some impressive articles from ur blog.

I see that you have cleared CFA 1. How difficult is CFA 1? For someone from non finance background
how much time do you think is required?

and do you have CFA material in print? I am willing to buy. I have some e material, but I d like to have in print.
Please reply :)

Thanks in advance

Srinivaas G

Manoj said...

Hi Srinivas,

More details from your academic background would have helped but anyhow CFA level 1 for non finance guys is going to be pretty tough because its for those people who have done their MBA finance or post graduation in Capital Markets. The reason being that to get an orientation of all the materials in CFA is going to take a lot of time for those in non finance background and in the exam you will tested on your understanding and not memory.

I had first attempted level 1 way back in June 2008, at that point in time i just had 5 months of stock trading experience which was my only exposure to finance. I gave my best effort and put in more than 500 hours of studying all the materials when the recommeded study time by CFA institute was only 250 hours. Guess what, i flunked horribly. I tried the same again in June 2010 after my post graduation in capital markets, this time i cleared it with considerable ease.

Please dont think that am discouraging you, am only trying to give a plain picture of reality. Moreover, i would recommed preparing for CFA exams with the intent and focus on what you can learn from the materials rather than taking the pressure of clearing the exam in mind.

I have CFA materials with me and if you want i can give them at a price.

Wish you good luck and a great week ahead.

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