I am happy to report that I recently discovered that I passed my CFA Level 1 exam.... on my first attempt. Pretty handily, I might add. Though honestly, I'm more relieved than happy.
Although the exam was in June, I've retained a remarkable amount from the actual experience itself which I felt that I ought to share, lest any of you mere mortals dare attempt an exam with a 1/3 pass ratio. (It's lower if it's your first try).
Personally, I'm thankful that I passed because I doubt my ego could withstand being ranked in the bottom 2/3rd of anything (which is why I was more relieved than happy).
Here are some of the tips I followed and I hope it helps a few of you:
Start Early
This course requires a significant amount of work. The CFA institute prescribes at least 250 hours, I probably did around that or a little less spread roughly over 2.5 Months. I was also working at that time, so it got hectic, even though I had a great boss who was willing to be flexible; If I were you, start earlier, ideally 3-4 months and give yourself a extra time cushion.
That said, if you do not have any background in finance you might require considerably longer time than the 250 hours, I work in finance, so I actually got some studying through my work load.
This exam can be very expensive; I registered in the last deadline and it cost me $1435 dollars. Realize that this is an investment and behave accordingly.
Get the Right Study Material
Unfortunately the material supplied by the CFA Institute is bulky, cumbersome and at times plain stupid. I've yet to meet anyone who has actually used it and passed. In fact its almost designed to put candidates off.
In Pakistan, majority of the people who clear the exam used Schweser Notes (In Pakistan a bootlegged copy costs $35). I'd offer to sell it to you, but then the Schweser folk might get really mad that I reduced there sales by thousands of dollars and sue me.
However, Schweser Notes or Analyst Notes are your best way of efficiently wading through the course and still have enough time for the all important practice exams. I've heard decent things about Stalla as well.
Calculator
The CFA Institute allows you to use only 2 or 3 calculators. I recommend buying either the Texas BA II Plus or Texas BA II Plus Professional as soon as you intend starting with your prep (The HP is acceptable, but has fewer functions).
It is important you get used to the calculator and adjust its settings to your convenience (decimal places mostly). LEARN TO USE IT. It is your lifeblood. And buy, beg or borrow a spare, or at the very least a spare battery and a philips screwdriver (to change the battery).
Work on a Schedule
Make a damn schedule; so you know what your doing and when your supposed to be doing it. If you fall to meet deadlines make sure you have some back up time to eat into. Attempt to diligently follow your plan, you probably won't but it's the thought that counts.
Weekends are ideal for studying, thought what worked for me is planting my butt on a chair for 6-7 hours at a stretch and working through the course. But whatever works for you. A scheduale is important because it gives you a sense of time to the exam which builds the anticipation and sense of urgency.
Course Breakdown
Quantitative Methods, Financial Statement Analysis and Ethics are massive chunks of your course (combined 112/240 or 47%) and more importantly Quantitative methods actually helps you navigate the rest of the CFA course. This is roughly the scheduale I used; It served me well. I strongly recommend it.
A: Economics
B: Quantitative Methods
C: Financial Statement Analysis
D: Corp Finance & Portfolio Theory
E: Fixed Income & Alternate Investments
F: Ethics
G: Practice Paper 1
H: Revise Course
I: Practice Papers 2 & 3.
J: Last minute forumla & Concept prep
Your strengths can be quants or fixed income and equities. Whichever they be make sure you know that topic inside out, and set your time accordingly. My yardstick was that if I could do the concept checker questions at the end of each study session, I was ready to move on.
If I couldn't, I'd figured out why, they are good barometers to the actual questions in the exam. (The answers are worked out for you in the answers section).
Practice Papers are vital. Take them very seriously and realize that they help evaluate your strenghts and weaknesses as a candidate.
Form a Study Group
I hear great things about study groups, but for me personally, it didn't happen. I would still recommend forming a study group that meets either after work or on weekends; but make sure it's a productive focused group; the fewer close, personal friends the better. If you do make a group, set targets and meet them.
Outside Help
I don't recommend classes unless you are someone with no financial experience. It's a do it yourself kind of course and there are alot of people who've already cleared CFA level 1 whom you can probably access for the tough road blocks. That said, do what suits you. Analyst Notes has a forum that is actually a terrific resource for answering your questions online and they have practice sections for one to attempt as well.
Develop Exam Temperament
Practice papers are very important, do atleast 3. Recreate the environment as best you can. Remember, you have to be able to effectively time yourself and finish attempting all your questions on the answer sheet. Simulate exam environment as far as possible. The Regent Plaza in Karachi for example is always freezing cold, I brought an extra long sleeve polo just incase. My hands also tend to get sweaty when in Exam mode so I brought tissus.
The biggest factor to recreate is planting your butt on a chair for 3 hours at a time and working in dead silence; if you like studying to music, start not liking it; the brain operates on patterns, you train it how to work. CFA don't allow calculator covers, but they'll most likely make you place them them under your chair. I'd still strongly recommend that one try to leave as much of your personal items out of the hall....like cell phones or study notes. They have a place to keep them, but I rather not lose my Phone because the millions of bags got mixed up.
Work Hard
There is no substitute for this one. Just Do It and think of the Pay Off (Money, Women, Prestige, Job etc). Or in my case Level Two Books (Above)
The Actual CFA Exam: Know Thy Enemy & Vanquish with the Vengence of the Almighty!
The exam is broken up into 2 papers, one in the morning and the second in the afternoon. All topics are tested in both sessions. You have to pass every single section (I think), so there is no value in trying to game the exam. None.Whatsoever. Do not skip anything in your study prep.
The CFA Level I exam is 100% multiple choice questions exam. You will be under time pressure in the exam and need to answer on average one question every 1.5 minutes so you must keep moving through the questions. Because I was well prepared I finished rather early.
As per CFA, this is your day's scheduale
1. There is a strong argument for working methodically through the questions in the order they are set but you might wish to start with a subject where you feel confident and which you can work through fairly quickly. But avoid hopping from one subject to another, you'll waste time and you may end up missing questions. Personally, I did it methodically, and it's much smarter that way.
2. Don't panic if you hit some difficult questions, you can probably get as many as 30 or 40 questions incorrect on each paper and still pass the exam. Which ought to make you feel better. Me?, I like certainty. Just back yourself and soldier on through.
3. Ethics in study session 1 is an important topic, if you are a marginal candidate your ethics score could be the deciding factor whether you pass the exam. Study Ethics: it's infuriating because it's the one section that you can never be quite certain off. I thought I failed it and according to the break down I was in the top quartile.
4. There is no penalty for getting an answer incorrect, so if you don't know the answer eliminate any obviously wrong answers and guess which one is correct.
5. Mark questions in the exam booklet when you are not sure of the answer or where the calculation needs checking and come back to them when you have finished all the other questions.
6. Do not get distracted by a question that does not make sense, if the question turns out to be ambiguous then it will be excluded when it comes to grading the paper. Do not also get distracted by any pretty women in the vicinity. Imagine that they are all vampires and will kill you if you donot pass this exam.
7. Read the questions carefully, particularly when there is a negative statement in the question. They can get tricky. Practice reading the questions. Practice reading the questions. Did I mention how you should practice reading the questions?
8. Leave time to check your answers on the answer sheet, be careful you don't miss answering a question. Seriously. Go over your sheet the minute you think your done and review the questions that you weren't sure about.
9. Lunch break: I'm not sure about other testing centres but the food at Regent Plaza was both expensive and terrible, not to mention pure badly concocted junk food. Bring food from home if you can, brown bread, boiled eggs, salad. I went for multiple cans of Red bull. Lots of it. I shouldn't have (I know this but I'm a glutton for punishment). I was very lucky I used the bathroom before I went into the exam for round 2. Do not consume vast amounts of liquids. Imagine that they are are pure acid and will collapse your intestines & stomach should you consumer more than a mere palm full.
10. Testing Policies: Know where your center is: Some cities may have multiple centres. Karachi, didn't but make sure you know where yours is. Have your multiple HB pencils, sharpner, spare calculater, eraser, Government Issued ID ready to go. here are the relevent CFA testing policies
11. Don't Study during the lunch break. Remember, you may be on adrenaline but your brain is very taxed by the 3 hour morning session. relax, talk to friends, if you are so inclined talk to a few of the cute girls (there are few girls taking the exam in the first place; so it may be cute girl.). Donot talk to anyone about the exam. It serves no purpose.
12. Don't stress: Everyone will love you just as much no matter what the result. It's an exam, not your life. You can take Level 1 in Both June and December as opposed to Level 2 & 3 which are held annually in June. So if you don't pass, know that you can take the exam again 6 months later with a higher statistical probablility of passing.
Here are some useful links that actually served as a template for this post
http://www.cfainstitute.org/
http://www.complore.com/tips-cfa-level-1-exam-day
http://www.ehow.com/how_2079031_pass-cfa-exam-level-1.html
http://www.collegeboard.com/student/plan/boost-your-skills/10296.html
http://www.investopedia.com/articles/professionaleducation/07/CFAexam.asp
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