L3 topics by difficulty

CFA Level III
#1

…so I know what to expect.

Have covered BF and starting on PWM - both seem relatively straightforward (comparing to L2)

Which topics should I be wary of and which should I look forward to?

Thanks!

#2

Each person has their own views on which subjects are more difficult. For me, was derivatives, GIPS, and the free response wealth management sections. L3 is much less material than L2 so I say your safest bet is study just as hard as you did for L2, practice questions as much as possible, and on exam day manage your time. Learn to skip around on the AM section to grab as many points as possible, if you get hung up you will shoot yourself in the foot.

#3

Risk Management (volume 5) derivatives took me time / option strategies, excluding this I think derivs is actually a tiny bit friendlier than L2 which still haunts me

#4

I would say derivatives is relatively difficult than all other topics in all cfa exam levels.

#5

Great - because derivatives is actually the topic I enjoy the most (even though it is certainly one of the most difficult)

#6

Great to hear it’s easier than L2 derivs! Currency swaps took me a long time to master!

#7

Swaps are peanuts compared to L2.

PM is the hardest one for me, all 3 versions.

#8

Derivatives was hard in L2, much easier and enjoyable in L3, except perhaps options which is very memory intensive - mastering options without formula sheet is very challenging…

#9

The key to mastering the options strategies at Level III is to memorize the payoff diagram for each strategy. It’s rote memorization, but the sort of thing that’s easy to study/practice. (Write out flash cards with the strategy name on one side and the payoff diagram on the other. Shuffle them, then go through the stack, drawing the payoff diagram for each name, then checking it. If you do this 50 times, you’ll have them down. And you can do it 50 times in a few days.)

I wrote a series of articles on option strategies, beginning here: https://financialexamhelp123.com/option-strategies/. In each article I show you the payoff, explain how to build the strategy, then explain how to calculate the payoff, break-even points, and maximum gain/loss. The way I present it, it’s all pretty methodical; if you’ve memorized the payoff diagrams, it’s trivial.

(Full disclosure: as of 4/25/16, there’s a charge to read the articles on my website. You can get an idea of the style of the articles by looking at the free samples here: https://www.financialexamhelp123.com/sample-articles/.)

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