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CFA LEVEL 1
I was passing CFA Level I exam in December 2003. There was a time I was a student, had a lot of spare time, which I could dedicate to learning. Exactly, I was learning really hard for about six months. Some people can describe it as an over study. But passing this exam was my priority and I wasn't thinking about over studying then. Today, I can say that I have over studied a little bit.
At those time I was learning from Schweser Study notes. In my opinion, their study notes are concise and accurate. Schweser's sample tests are close to real ones. To be really honest, I have to point out, that I was studying finance and banking. Therefore many of the topics, which are tested on the first exam I was learning about during studies. For a person who is fresh in the subject of finance, it would be reasonable to look up in the books proposed by the CFA Institute. The reason is simple. One can learn from notes and pass the exam, but the point is also to learn and understand something. Unless one has different proprieties. Then sticking to Schweser notes should do the job.
CFA Exam is very specific. To be honest, the topics covered are not hard. The knowledge covered is basic for financial professionals. The hardest thing is the scope of knowledge. When you get to SS10 (Study Session 10) you forgot about SS3. If you come back and refresh SS3, you'll forgot about SS8 and so on. Therefore crucial for passing the exam is coverage of everything to extent which is enough to pass!
CFA Level I STUDY KIT
Let's get to the point. What should one need to prepare reasonably and pass Level I exam.
1. STUDY NOTES (I have used Schweser study notes and can say they were good enough for me, but if you already bought another notes and don't want to spend $379 for Schweser one, maybe you should stick to it). The most important in study notes is sticking to LOSes (Learning Outcome Statements). LOSes are idea of CFA institute to logically organize knowledge into small pieces. Your study notes should answer for every LOS. Otherwise you can miss some point. In DOWNLOAD section I have put some stuff you can use.
2. TESTS. TESTS. TESTS. IMHO there is nothing more important on Level I than solving many sample exams. The reason is simple. Level I exam is multiply choice test. One has to master tests solving to pass this exam. Knowledge is not everything if you have 90 seconds for one question. You have to keep in mind that time is ticking away and that the thoughest part of the game. In DOWNLOAD section you'll find some useful stuff.
CFA Level 1 BEST LEARNING STRATEGY
I was mastered my learning strategy through all CFA levels. After passing three CFA exams I see that for me the most efficient way to learn was to:
1. READ all study notes ONCE to cover the whole curriculum.
2. FOCUS on the KEY WORDS. These words are used in LOSes and in formulating questions. If you are short out of time and want to pass, focus on these words, because that is you are expected to know. Nothing more, nothing less.
Describe means describing, NOT calculating. You don't need to know formula.
Calculate means that you have to know formula to answer the question.
3. DO SAMPLE TESTS, but not only questions concerning one study session. The most efficient way is to do test covering whole curriculum. Why? Because that's why the real exam works. You can do one part very well, but you have to do the whole exam. That's why I prefer to make tests and back to study notes if you don't know how to solve questions.
CFA Level 1 TOPICS - divided between all areas rather equally
CFA Level I examination is testing tools and inputs and includes an introduction to asset valuation and portfolio management techniques. Curriculum is covering rather simple issues and the main difficulty is their scope. That's the point - simple questions but broad coverage. In my opinion, making lot of tests is the key to L1.
1. ETHICS (15%) - this part of examination is tested on each level and higher level implies more difficult question. Most people say that ethics is the highly difficult part of the exam. In my opinion this is only true for level II and level III. On L1 the general understanding is more important than details. On further levels details are also tested. However on all three levels ethics is said to be the crucial issue that makes you passing or failing on the exam. That's why you should not neglect this area of exam.
2. Quantitive methods (12%) and economics (10%) - These are rather easy part of the exam. Don't miss these points!
3. Financial Statement Analysis and Corporate finance (28%) - this is the first approach to FSA. Remember, that you can't escape from this topic. If you neglect this area on first level you will have to go back to on the second one. Needless to say that financial statements are main sources of information to financial analysts. Depreciation, LIFO, FIFO, ratios, long-lived assets and liabilities are key topics here. Corporate finance covers some basic topics and for people with financial background it won't be a problem. However, FSA requires lot of attention.
4. Asset valuation (30%) - equities, fixed income, derivatives and alternative investments - all the basic information which will help to understand how the markets are working. Asset valuation and Financial Statement Analysis requires the most attention.
5. Portfolio management (5%) - asset allocation and portfolio management basics. Easy points.
More hints you will find in TIPS AND TRICKS section.
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