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How I Passed All CFA Exams at the First Attempt - Lynn Raebsamen, CFA - YouTube
Channel: CFA Tips and Tricks
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hey guys this is lynn from 3 steps
to cfa
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one of the most frequent concerns i
heard from you guys is about passing the
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cfa exams
and therefore i decided to do my first
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video about strategies that can enhance
your probability to pass
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all three levels at the first attempt
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far from being any kind of genius i
passed all three cfa exams in one go
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and i'd like to share with you my
strategies for studying and writing the
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exams
to enhance your probability of success
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a lot is about cracking the code of the exam structure
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moreover i've been involved with the cfa
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institute in several different
competencies throughout my 20
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years in the financial markets which has
given me tremendous insights
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on what is being valued and considered
important from their perspective
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the structure of the cfa exams is a bit
different for each level
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and if i could attribute one keyword
as the number one success factor
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to pass each level it would be these
level one
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is speed level two is focus
and level three is conciseness
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before we go on please subscribe to my
channel to be updated on new tips and
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tricks for the cfa
and i'd very much appreciate if you
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share this content with anyone who might
also be interested in some advice
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and hit the thumbs up if you like my videos
now let's start with level one
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at the time i am doing this video the
level one exam is made up of 240
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multiple choice questions
in two three hour sessions for the
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paper-based exam
which will take place for the last time
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in december 2020.
from 2021 there will be computer-based
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exams with 180 questions
in two 2-hour and 15-minute sessions
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there are three answer choices for each question
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a, b or c thus on average you have
90 seconds per question the strategy
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for the level 1 cfa exam is therefore
speed
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level 1 is a lot about recognizing if
you can answer a question
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right away or not the rule of thumb is
to make sure
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that you get about 70 correct in each
topic to pass
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you know that you have 90 seconds on
average for each question
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therefore one strategy that is likely to
maximize your score is
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if you do not know the answer within the
first 10 to 20 seconds
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skip the question and jump to the next
a big percentage of candidates fail level 1
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because they couldn't manage the time
therefore answer the questions that you
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are certain about the answer first
and do it as fast as possible then go
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back
and answer the other questions
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another crucial point about the cfa exams is
this
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you are not being penalized for wrong
answers which means
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it's always better to tick any box to
ticking no box at all
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as you have a 33 chance to be right
the ranking to answer questions
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is this one know the answer
two exclusion principle three
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educated guess and four random guess
one is what i just mentioned skip the
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questions you don't know the answer
right away
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and answer those you are certain about
first then go back
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and do two and three if you are not
certain about the answer right away
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try the exclusion principle next
is there any answer that you can exclude
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for sure
then strike it through if there are
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still two answers left
make an educated guess which means
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choose the one
that you feel is more probable to be
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right if you really have
absolutely no clue and believe me this
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will happen here and there
the strategy is decide for one letter
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that is for example b that you will take
consistently in case you're completely
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clueless
this will ensure that you will have a 33
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chance to hit the right answer
if you jump around a b and c with random
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guesses
on average you're likely to hit less
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than 33 percent
so you see level one is a lot about
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speed
and probability now let's talk briefly
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about how to prepare most effectively
for level one
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as there are only 90 seconds per
question it is unlikely that
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highly complex questions are asked
recognizing complex interdependencies
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is therefore less crucial for level one
therefore
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it is a lot about memorizing the
materials and
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reproducing it at a high speed
so instead of starting to read from page
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one of every reading assignment
which would have taken me lightyears i
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started with reading through a few mock exams first
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there are some official ones available
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from the cfa institute itself
and several external providers
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this is less about the content
itself but more about getting yourself
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familiarized with the exam format
and type of questions you can expect
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this will help you to focus
on what to study and how to memorize it
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so you can reproduce it best during the exam
next i picked my battles
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i checked which topics carry what weight
in the exam
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ethical and professional standards are
valued highly by the cfa institute
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as holding charterholders to the highest
standards is a crucial cornerstone of
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carrying the cfa title
in level 1 financial reporting and
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analysis carries the second largest
weight
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followed by equity investments and fixed
income this determines the level of
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detail i studied for each topic
it helps to allocate the number of hours
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you want to spend with each topic
if needed jot it down in an excel
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spreadsheet and track it from there
for level 1 candidates study a little
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bit more than 300 hours on average
so if ethical and professional standards
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carry 15 to 20 percent weight
allocate 15 to 20 percent of those
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300 hours to it
which is anything between 45 to 60 hours
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while everyone has their own studying
style what's worked well for me
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was a bottom-up approach i first read
through mock exam questions for each topic
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then the summary notes such as kaplan schweser
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and for the topics with higher weight i
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finally also read
the recommended parts of the books where
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i felt i needed more elaboration
that the notes didn't cover
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in this way i felt i could work through the
materials in a more efficient manner
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since i could focus more specifically on
items i needed to study more
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in a top-down approach where you read
thousands of pages of the books first
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and then the summary and do the mock
exams in the end
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you are likely to spend more time and
have less focus
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chances with a bottom-up approach
however are that you might miss a few
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elements but given that you have to
score seventy percent and not hundred
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percent to pass
and with most of you facing time
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constraints as many are working full
time besides studying for the exams
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missing one or two elements will not
decide over pass or fail
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but for level 1 time management does
let's move to level 2 now the structure
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of the level 2 exam is a little
different from level 1.
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here you'll have so-called vignette
supported
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multiple choice questions
a vignette is something like a mini case study
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often accompanied by tables and charts
for each vignette you will get a set of
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questions related to the information presented
there are two sets of 60
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questions for two sessions
of three hours which means 360 minutes
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in total for 120 questions
or three minutes per question
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this seems like a lot longer
than you have for level one
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but bear in mind
that the vignettes can be quite time
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consuming to read through
therefore the keyword for level two is
focus
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as with studying for the level
one exams
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a bottom-up approach might help you here
as well which means
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start by reading the questions first
then you will know what you need to
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focus on when reading through the
vignette to find the answers
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mark the bits that you find are related
to the questions so you can quickly get
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back to the right sections to find the
answer
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if you start by reading the vignette
without knowing what to focus on
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chances are that you spend too much time
with it and when you get to the
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questions
you have to go back to the text to find
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the answers which you haven't marked
this will cost you valuable time that
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can decide over pass or fail
how to study for the level 2 exam
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different to level 1
vignette questions allow for higher
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complexity
at this point it is crucial that you
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understand interdependencies of
different concepts
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and really understand the underlying
theories instead of just memorizing
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there are more complex calculations you
need to do which might require
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a step-by-step approach to get the end
result
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here again it might help to go through the mock exam questions first
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to familiarize yourself with the setup
of vignettes and understand
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the type of questions to expect
when studying the materials
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focus on genuinely understanding the
concepts
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and solve a lot of calculation problems
as an exercise
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what you can also do is to look at real
life financial statements
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and use them to do some calculation work
using the concepts you've learned
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it adds a little spice to the otherwise
dry studying of theoretical examples
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so for example if you are learning about
different valuation models
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why not look at a real company's numbers
and calculate a valuation based on the
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different concepts
every public firm has annual reports on
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the web that you can download and
analyze
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this will help you to truly understand
how to apply the different valuation
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models in real life
there will be also a good number of
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questions where you do not have to do
any calculations
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but understand thoroughly what is being
said in the text
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such as with questions about professional standards
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non-native english speakers
might have a little disadvantage in this
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matter however
a lot is common sense combined with the
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additional knowledge you acquired
through studying
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key here is to read super carefully
and recognize if there are any trick questions
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now finally level three the three hour
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afternoon session of level three
consists of 11 vignettes with 60
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questions
so it's the same as in level two
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the three hour morning session however
is made up of eight to twelve essay questions
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that the institute calls constructed response
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the maximum points you can achieve with
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the essay questions
is 180 which is half of the points for
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the whole exam
now here's the good news for level three
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for one the pass rates for level three
are higher than for level one and two
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usually in the mid 50 percent
range whereas they are in the low 40 percent
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range for level 1 and 2.
this probably has something to do with
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positive selection
which means candidates who made it that
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far are more likely to prevail in exams
in general
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so that's the other good news if you
made it that far
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you're an outperformer already
since half of the exam
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is about essay writing the keyword for
level three
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is conciseness the worst thing you can
do is to start
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writing without a structure in mind as
you are then likely to
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miss out on a lot of points and likely
will lose time over writing too much
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irrelevant stuff
graders are looking for keywords and the
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right derivation
or structure around them therefore
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what's worked really well for me
was to list bullet points on a scrap
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paper first
and then think about how to construct
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all elements into a neat concise response
the other tip i have
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for you is
make an effort to write legibly
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having graded exams myself
honestly what i can't decipher i won't grade
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graders are also just humans and
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grading exams is almost as exhausting
as writing them
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especially if you have to try to figure
out someone's creative handwriting
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so don't miss out on points
unnecessarily
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that's it folks for my first video on
tips and tricks for the cfa
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if you found this useful please hit
the thumbs up and if you didn't please
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leave in the comments below what i can
improve
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or what questions you'd like me to
address in the future and
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i will do my best to help
do also check out some of my other videos on this
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channel if you'd like to learn how to
become financially independent
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early on in your life
thanks for stopping by
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subscribe to my channel to be updated on
new videos and
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until then stay safe and healthy and see
you again soon
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