I posted this on CAIA Level 1 already (sorry guys), but thought I would have a better chance of someone responding who had taken L1. I won’t be clogging up the L2 forum with L1 questions in the future! Can anyone let me know of the prerequisite stuff needs to be studied for the L1 exam? Is it needed more for background on the topics that will be covered or will there be actual exam questions on all of the Learning Objectives? Any help you could give would be greatly appreciated! From the CAIA website: Part I: Quantitative Analysis Topic 1: The Time Value of Money Topic 2: Probability Distributions, Sampling, and Hypothesis Testing Topic 3: Correlation, Regression, and Time Series Analysis Topic 4: Portfolio Concepts Part II: Markets, Instruments, Valuation, and Investment Theory Topic 5: Markets and Instruments Topic 6: Fixed Income Securities Topic 7: Equity Securities Topic 8: The Basic Relationship between Risk and Return Topic 9: Market Efficiency Topic 10: Applied Portfolio Management Topic 11: Options and the Black-Scholes Option Pricing Model Topic 12: Other Derivatives and Market Strategies
Hi mc123 , you should try doing the sample questions on the CAIA website. If you score well >70% then you most likely don’t have to worry about the review material you posted. L1 CAIA in March 2010 was not very quantitative at all and what there was, was not difficult. Not knowing your background, I suggest you try the questions on the site to assess your own standing.
Hi sircorn - I took a look at the problems over the weekend and I know for a fact I will not get over 70%. Nothing on there seems “difficult” it’s just that I’m not familiar with many of the calculations - particularly for what’s covered under Part I: Quantitative Analysis. I don’t think it would be a problem for me to learn any of it, but Schweser doesn’t have something like the Notes for the prerequisite material and the books that they reference as the Source are seriously long. If anyone has any suggestions on shorter materials that cover the same basics that would be awesome. Otherwise, any guidance on whether or not there are actual exam questions on this stuff would be appreciated. I don’t want to spend too much time studying the prerequisites if it’s more important to stick with the Schweser materials.
I did Schweser for L1 CAIA and they had this book called CAIA Fundamentals, think around $100. It covers most of the pre-req materials you posted above. I completed the CFA so the book was a waste of time for me but you should check to see if they still have it. There is really nothing too terribly quant that’s hard at L1. Computing Manager Aplha is an easy model, CAPM, Sharpe Ratio, Information ratio, Hurdle rates, Forward and Future equilibrium prices, it’s all pretty easy stuff that presented in the CAIA L1 curriculum itself. This was the link to that book I mentioned. http://www.schweser.com/products/caia_fundamentals.php?new_level=caia Looks like it isn’t offered anymore. I’m not surprised. As long as you’re up to speed on the conceptual level of the pre-req material, don’t worry about the math. It’s very easy at L1, IMO. good luck
Thanks sircorn. If you (or anyone else out there) still have that Fundamentals book you mentioned, I would happily buy it off you (even it’s it’s dated - pretty sure not much has changed in Present Value world)!
Sorry, no longer have the book. Most of the material would be in a basic finance text. At worse, Google any formulas you need. Don’t sweat it though, L1 is quantitatively easy.
Too bad - but thank you again for your help! I’ll just power through the Schweser stuff I do have and go to basic finance texts for background if I get stuck. Good luck to you with L2!
mc123 - If you are still interested in the Prerequisite book, I have a virtually untouched copy that I’d be happy to sell you. Let me know if you’re interested and we can work something out. Good luck w/ the exam!