Steer your CFA preparation keeping these things in mind

Being a chartered financial analyst is the dream of aspiring finance professionals. Millions of people appear for the exam every year for the coveted certification. Since they have to study a lot of topics before the exam, candidates seek out CFA level 1 preparation classes desperately. However, it is important to choose the right course that suits your needs otherwise the whole effort would be completely futile.

You could look for online classes where you would get informative videos and extensive practice tests. The videos with good visuals and animations as well as those with relevant solved examples should be preferred. If you are a serious candidate then you must know that passing the first level needs exhaustive preparation and you would have to put in approximately 300 hours of study to clear the first stage.

Economics has a good weightage in the level-1 exam and it is essential to focus on the subject. The CFA level 1 economics covers a lot of sub-topics covered under the macro and microeconomics section. Candidates are supposed to have a basic understanding of market structures, inflation, currency regulation, forex, international financial organizations, and even geopolitics.

If you are not aware of the exam pattern, then here is a quick recap.

A brief overview of the CFA exam

Level-1: There are two examination sessions of 135 minutes each in the first phase of the exam. Both sessions comprise 180 multiple-choice questions (MCQs) each. The candidates would get an average of 90 seconds to solve each question. However, there is no separate timer for each question. Level 1 of CFA consists of the following topics (with their respective weightage):

1. Ethical and Professional Standards (15-20%),
2. Quantitative Methods (8-12%),
3. Economics (8-12%),
4. Financial Statement Analysis (13-17%),
5. Corporate Issuers (8-12%),
6. Portfolio Management (5-8%),
7. Equity Investments (10-12%),
8. Fixed Income (10-12%),
9. Derivatives (5-8%),
10. Alternative Investments (5-8%)

Level-2: The level-2 exam has two exam sessions of 2 hours and 12 minutes each with an optional break in between. There are 22 item sets consisting of vignettes with a total of 88 MCQs. Each exam session has 11 item sets. The questions have to be answered based on the information provided in the vignette. While the first level tests the basic knowledge of the topics mentioned above, the level 2 exam tests the detailed application of the investment and portfolio management topics.

Level-3: The level-3 exam, similar to the previous level, consists of two exam sessions of 2 hours and 12 minutes each. Each session would either have 6 item sets and 5 essay sets or 5 item sets and 6 essay sets. The questions have to be answered based on the vignettes.

Tips to clear the level 1 exam:

The CFA level 1 exam is the first step toward the prestigious CFA certification. It tests the fundamental knowledge of the candidates on several topics including geopolitics, apart from the core finance and investment topics. Since there are so many topics to study, it is crucial to formulate the correct plan to move on to the next stage.

• Cover the curriculum in time

Topics like Quantitative Methods, Economics, Financial Statement Analysis, and Equity Investments are quite time-consuming and you would need to give extra focus to these subjects especially economics as it has both theoretical and arithmetic portions. The CFA level 1 economics has a lot of interesting sub-topics but candidates need to spend some time preparing for the subject. Make sure you have a routine, demarcating the topics to study within a specific time frame. Time-consuming topics should be allocated more time so that the curriculum is completed on time.

• Practice makes us all perfect

While studying is important, it is even more important to practice. You have to practice a lot of solved and unsolved questions to gain an idea of the problem-solving approach to be implemented during the exam.

• Time management is key

The CFA exam rigorously tests the agility of the candidates. It can be a lot of pressure for those who are not able to solve the questions within 90 seconds. You should have the ability to quickly read the questions and solve them immediately. You should develop quick reading skills and time yourself while practicing arithmetic questions in order to develop the right pace to complete the questions in time.

• Get adequate sleep

Sleep is the most ignored aspect of exam preparation. Without a good night’s sleep, it is impossible to focus on your studies. Make sure you get enough REM sleep to recharge yourself. This would help you retain the information you have carefully studied over the week and increase your focus apart from preserving the mental energy required for comprehending dense topics.

Conclusion

You must have harbored that dream finance job of research analyst or portfolio manager for a long time now. If you want to fulfill that dream then getting the chartered financial analyst certification would be of immense help. Enrolling yourself in the right CFA level 1 preparation classes would significantly speed up your studies. You would be able to cover the entire curriculum in time with the help of engaging and informative videos filled with attractive animated features. This would give you adequate time to revise the topics and be better prepared for the exam.