Exactly how hard is the exam (all 3 levels)? (a.k.a the "Three Dragon" thread)

CFA General
#81

@BlackOmen - I have a Master’s in Finance, and found that L1 was mostly a review.

L1 isn’t a breeze, but you definitely do have to show it some respect. More than anything, you have to “learn to study”. Most people who take L1 haven’t learned how to study for an exam like this. It’s not like college where you can do the professor’s review the day before the exam and still get 80% right. It takes repetition and time, and that’s probably where you (and most people) go wrong. You don’t approach it with the right mindset.

In this case, I had an advantage. I took the CPA exam right before the CFA exam, so I had figured out how to study and approach the exam.

#82

Agreed. Most people in finance undergrad aren’t bright.

#83

I think I agree with this on some level. Looking at ‘300 hours’ surveys, typically the group of people who performs the worst on L1 is finance undergrads without finance work experience (even worse than those without a finance undergrad and finance work experience). The CBoK is a reveiw by and large of a BS in finance - but it is done the CFAI way and I (as a finance undergrad) beleive that many others understimate the amount of work needed to pass simply as they have a familiarity with the material - though they did not have to learn what the CFAI considers important in undergrad at the same level that the CFAI expects them to have it handeled. I’ve know plenty of engineers who could never make it through the CFA CBok, no chance - though in the same breath I have know plenty of finance/business types that can barely add and struggle to think and reason in a systamatic fashion. I’m not so sure that anybody has an advantage from their undergrad studies simply becasue once a non finance major gets through the big picture and gets down to the details the CFAI considers important they are pretty much on the same level that a finance undergrad is on (read they have ground to make up, but not really all that much in the grand scheme of things), I’d put my money on someone with good finance realted work experience regardless of undergrad studies.

#84
#85

And I’d put my money on someone clever that puts in the hours, full stop. Whether they have a finance degree or not, or even “worse”: finance real-world experience does not matter that much for L1.

L1 is really just about analytical skills (well, sort of) and putting in the 300 hours, the rest is really quite irrelevant I think. And that is why engineering (or Law) undergrads often perform better than Economics/business/finance undergrads: they work harder since they pretty much start from scratch while the finance guys are like “oh gosh i already know all that stuff”, plus they got a (usually) harder time during their undergrad studies and are as strong analytically, if not much stronger, and that is why they come in better prepared on the D-Day.

I suspect that L3 (I’m not there yet) is when having investment management experience really helps the candidate.

#86

its hard. Its about a ~33% pass each test. with 3 tests its .33 to the third power. thats about a 3.5% chance of passing everything with 1 shot if done at random. I’ve heard from other people that only 20% of takers pass all 3 tests on their first try. it also takes a minimum of 2.5 years. Most people never truly finish all the tests and quit after they fail L2. Personally, if i had I failed L2, I would not have devoted time in this again. So the test is hard as well as time consuming. It will get successively harder as you move up the level since you are competing with individuals that have the passed the previous level. People devote ~300hrs per test. Its considered the hardest test in finance, known as the gold standard in the industry. the subjects you have to learn is broad and the material is pretty deep. To make matters worse, most of what you have to learn will not be applicable to what you do, since your job is probably more specialized. The basic info in level 1 is probably worthwhile to know. Level 2 seems to be the same thing with more complexity, and it becomes less about learning and more about being a better test taker than your peers. They make it more difficult by not feeding the info to you, and have you answer multiple questions using a story. Level 3 I have never taken actual or practice test, but I feel I have to know a question inside and out and be able to answer step by step since its in essay format based on what I’ve read. I dont think having investment management experience will help you pass this test. Its about knowing what you need to know when you need to know it kind of deal.

#87

i’m not so sure about engineers having a better pass rate than finance majors. when 70% of the material on Level 1 is review and the other 30% is mostly memorization (Ethics, GIPS stuff, etc) and in topics that have been discussed in business classes (business ethics, business law), no finance major should fail Level 1. of the 5-10 alumni i get updates on, i don’t know one finance major who has failed a CFA exam. Level 2 is tough for those without strong accounting backgrounds, but again, the sheer familiarity of the vast majority of the topics gives finance majors the upper hand. painting finance majors as lazy is wrong. they may not have been required to exhibit strong math skills but strong math skills are not required for CFA exams. finally, i agree completely that experience in investment management makies level 3 easy. without experience, i would’ve actually have had to study for 100 hours or so.

#88

I passed both level and 2 on first try but with well over the 250 hours recommended. I am now tacking level 3 this June under less ideal circumstances. I have a full time job, whereas I was an independent contractor working from home on the first two. I am also now expecting a first child (wife carrying it, thank the good Lord) who is due right around the date of the exam. To boot, I first had to pass a whole bunch of series exams before I could even start preparing for the cfa at February end.

Is it stressful? Sure, especially when considering how little separates the glorious scenario of passing with the horrible case of failing (band 10). You could literally ace most curriculum and all of a sudden 30 percent if questions are some obscure topics yiu paid least attention to. Or, it just was not your day.

On the other hand, it is just a test. The content often makes me laugh in how simplistic it is. The text often looks like it wants to wound a five word statement into a three page paper. Then the formulas start, and the matrices one has to remember and it sets in that some of this stuff is actually tough to retain.

My stress does not come from unpreparedness. It comes from the daunting possibility that I will fail closely and have to redo in a year with a kid in tow.

To boot, I am disheartened somewhat about the coverage the charter gets Some hail it as supreme (my series 24 instructor nearly genuflected when he realized I was polishing the 24 and a couple of other series before starting L3 in few months ). Others just are like “meh!” . The candidacy certainly did not help much in terms of putting my resume in the top of the stack.

#89

^If you’re talking about the Series 7 and 66, then you probably work in retail, and CFA is probably not held in high regard. Most retail FA’s don’t even know what it is.

#90

I dont know shit about dragons but Level 3 is much harder as it is th eonly test where memorization doesnt matter. You need to comprehend a question, apply knowledge across volumes, and concisely pen a response that is within the formatting guidelines while the clock is ticking. There was a lot of material in Level 2 but nothing that cant be learned with enough hours put in. Level 3, hours dont matter. You just need to know this shit.

#91

Don’t beat up yourself after the morning session in L3. It’s brutal, but the afternoon session is usually straightforward.

#92

Here’s a bold viewpoint, based on a case I know very well: My own.

Level 1? Easy peasy. 2 weeks study (I started exactly 15 days before the exam).

Level 2? I thought I would fail, because I started a bit late (9 days before the exam). Turned out to be enough.

Level 3? I’ll tell you in August.

Work? No impact. I manage a team of 9, all of them except 2 need a lot of “management time” and a lot of control. During those 2 weeks and 9 days of study, I still filed my 10 hours of work every day, chasing my guys.(I did take 2 days off just before the exam. Didn’t want to waste too much of my annual leave).

Family life? Yes, my wife and 3 kids were very nice during that time - but, eh! it was just a couple of week-ends after all.

Age? I’m 41, doesn’t seem to be a factor.

Motivation? I don’t care much about the CFA personally. Actually, 5 years ago I did not even know it existed.

Native English? I started to learn English when I was 10 (what you call in US “Junior High”).

Background? I’m an engineer by training, and that’s the key. You see, all these credentials people boast on their CVs, “Marketing”, “Finance”, “Business Administration”, that’s all BS. To do good work, the only thing that counts is: Are you able to think with logic and count? And the statistical truth is that people who can think and count are engineers. I my home country, if you’re a smart student you don’t study BS. You study Engineering. You can always learn the BS later.

Being able to think and count, that’s all you really need for CFA too, that’s why I respect this title.

To some extent, you can make up for some gaps in your thinking & counting skills by piling up more study time - in other words, thanks to a third skill which is personal discipline. I respect personal discipline too, so to people who get their CFA after working their *ss off several hundred hours, failing a couple of times but getting back up and passing eventually: Congrats, you deserve it and I respect you just as much as those who need less than 100 hours of study.

But guys, honestly, if you’re *really* lacking the thinking and counting part, self-discipline will only get you so far.

As a conclusion, I write this post for 2 reasons. The first is to warn those who are not going to get their CFA anyway: Better for you to realize that sooner than later! It will save you lots of time, money and pain. You can always try the path of BS, there are companies/positions where it works…

#93

Guy has a wife, three kids, 41 years old, manages 9 people, most of whom need constant supervision. He doesn’t care about the CFA, and didn’t start English until age 10.

And he claims to have passed Levels 1 and 2 on a total of 23 days of study.

BS.

#94

Dear Greenman72

15 days + 9 days = 24.

Not 23. That’s probably why you need to work more than me to get your CFA.

:smiley:

#95

Maybe he paid someone to attend the exams and pass them.

#96

So yag claims he passed level 1 by studying 15 days and level 2 by studying 9 days. And he is an engineer with no finance background I assume.

Total BS.

#97

To us , All 3 levels have same level of difficulty . When you clear level 1 , the next thing is Level 2 which is the application part . But since the person has cleared level 1 , he has certain backround in CFA and can build upon that. Similarly he can target the CFA level 3 which is bothe essay and oblective type.

Thanks…

#98

Bleron did something similar, but he had a solid finance background, both in terms of education and experience.

#99

You assume wrong - although it depends what you call “a finance background”.

“I had never heard of the CFA” and “I never studied finance in university” do not mean I’m ignorant about “finance”. I started my CFA at age 39 - you should wonder what I did before that, before assuming…

edupristine and former trader are more prudent than you, they realize that what I did is indeed possible.

Refering specifically to the CFA topics: for Quants, Economics, Derivatives I needed just a refresher, having studied this at some point (Quants and Economics in university, and for Derivatives, it was a 3 months internship in a bank in 1995, the one and only time I worked in “Finance”. By the way, re-demonstrating the Black Scholes formula was a funny little piece of math challenge, I recall).

Corporate finance, Portfolio, Securities all relate to similar concepts around NPV and the CPAM. NPV is really basic from a mathematical point of view, and I had many opportunities to practice it writing business plans for the many businesses I worked for. I knew the basics on how to read a P&L and Balance sheet, too.

Ethics, FRA, Fixed Income, Altern were really the new stuff to me during those 15 days in November 2012 for the CFA1.

Also, the 15 days and 9 days study were not deliberate, rather poor planning. My initial plan was to study 2 months.

So, guys, don’t be jealous and just realize this:

  1. Some people will NEVER be able to get the CFA.
  2. Most of those who get a CFA do NEED 200 to 400 hours of study per level, and it will have more or less impact on their personal life.
  3. Others need less than 100 hours, and the lifestyle impact is pretty limited.
  4. 20 years ago, when I studied engineering with about 400 other students, most of us had pretty much the same abilities but a few (10 to 20 guys and girls) were clearly way smarter than the rest, including me.

I’m not that good, after all.

#100

Yes, Amongst all 3 levels, Level 1 is coolest . Level 2 is tougher , Level 3 is toughest . Level 1 is obviously basic tools . Level 2 is application based and Level 3 is 50% subjective . I hope it’s clear