Chartered Financial Analyst 2012 – Level 1

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MBA vs CFA

Traditionally, MBA is the gold standard of business degree. In recent years, there was a growing trend and demand in the workplace for those with CFA but specified. A lot of people, one, are faced with confusing decision to do both, or possibly other. But what is the best choice what? Each of which gets you what, or combine it with another program, what is worth pursuing both the CFA and MBA? After reading this article, you must have thought more clearly as the answer to these questions.

Benefits of MBA

Master of Business Administration is the path of traditional education in the field of financial and corporate or many MBA. Investment banks for the development of top-class business school, trading companies, and corporate consulting, whether workers have been trained in the world's leading companies for decades. There is for this reason. While providing opportunities for career paths targeted in the second year to "focus", top MBA program, has been providing high quality, broad exposure to various fields of business traditionally.

Top schools, provides an impressive internship and networking opportunities to attract leading business leaders, to provide direct recruitment directly by top companies in all, probably the best, of all areas of finance and corporate opportunities. Exposure to various fields of business such as a broad range of financial, marketing, capital markets, such as business development is a strength of the MBA. Company to be successful for students, receive an overview of the "big picture" of a major component of all great.

At the same time, will be the study of "expert" in more specific areas of concentration in order to prepare them for career field / track specific in their attempts to pursue after graduation. The general nature of the MBA, which provides a great platform of knowledge that students are able to pull from his entire career.

Advantage of the CFA

CFA or Chartered Financial Analyst, compared to the MBA, is a far more professional degree. CFA will prepare students to pursue a career as a certain investment professionals. Portfolio management of these areas is most often, investment research, advisory services, investment banking. Specifying the CFA is considered to be more intense education in the principles and techniques of investment can be obtained by passing a series of three inspection difficult, than the typical MBA in general.

It is the employer training the most stringent in the skill sets this special candidate in the CFA, if an investment in the "concentration" of his candidates get is possible an MBA in order to achieve such training you can be assured that you have. This specialization, you can become assets of a specific job, CFA is not intended to give broad-based business education provided by the MBA. May not require a narrow CFA education If you are looking to operate in an area that is not focused portfolio of business development, investment and "and marketing is intense but brief.

However, when more people will get the MBA, get it, to "unique" as low as, CFA way, and for the serious student to 'Set yourself on top of the "crowd has become.

Both MBA, CFA or

Decision of whether to pursue both their MBA, or CFA, is dependent on the career plans of individual students and their goals have. Masters of Business Administration, has provided a great education in a wide range of business, chartered financial analyst, set the target investment career as you wish, providing specialist skills. It when it comes to investment analysis, such as portfolio and asset management, certain companies, as a more powerful education, please consider the designation of CFA.

CFA LEVEL 2- STRATEGY

Start as soon as possible. As you register for level 2, you get your books. so once you start raw,and atleast start having a glimpse of the syllabus across all the chapters, you will get a more better idea as to how to go about preparing for level 2.

Anyways to begin with you preparation strategy, I guess first of all define the timeline. It's gonna be one year, two years, 6 months etc. whatever be the case, please keep one month at the end completely free,take a sabbatical from work,what ever works. In case you have finished the syllabus early,then 15 days in the end should do.

start backwards when planning. Lets imagine you are in the month of June next year(2011 at the time of writing this article). You are going to sit for the exam today. Now you feel oh God I haven't studied anything. so what are the things that you would want to do? some suggestions:

• you would want to keep the last one month or 15 days free for revision and giving mock exams.
• atleast 4 mock exams of 3 hours each should be good.
• syllabus should be finished one month before, possibly two months before to plan.

And so on and so forth. so in this way you are able to decide your time line and how you would go about finishing the syllabus. In the most probability, you would be working, so planning your timeline becomes of utmost importance. keep in mind: the CFA exam syllabus is huge, by the time exam comes, you must be able to consolidate the whole syllabus so that you can bring out what ever you have studied in a span of six hours. Untill and unless you have not done your chapters thoroughly, you won't be able to consolidate, and if you are not able to consolidate, you won't be able to answer questions quickly. Planning and execution is the key, the CFA exams are not rocket Science, any common brain can clear them.

Having gone through your strategy for time allocation, the next most important thing comes is resource management. Remember, its within the time required that you must finish the syllabus, so make so sure you have set it out properly as to what you are going to read for the exams.

It would be great if you are able to read the CFA books. In level 2, it becomes very important. The emphasis in level 2 comes to conceptual clarity and thee application of those concepts.Mere knowledge won't help you here. so read the CFA books. Well if that is a huge work,then maybe at least read rest 70% which is the new portion of the syllabus and introduced in the level 2 exam. However the time constraint is high, then it is suggested that use the prep providers like Schweser and Stalla, and read the tough areas from the book,and those areas where you are not comfortable with Schweser/Stalla.

Here are a few suggestions if you happen to combine both the prep providers as well as CFA books.

1) Ethics: read from either doesn't matter. If you have time,read from the CFA books.

2) Quant: Reading from the prep provider material is sufficient.

3) Economics:Read the currency exchange part from the CFA books. Other topics:prep provider is sufficient.

4) Financial Reporting and Analysis:Reading from the CFA book is essential.

5) Equity,Fixed Income: Reading from the CFA books is essential.

6) Derivatives:The level 1 repeated portion,read from prep providers,the newer topics,specially Swap,read fromt he CFA books. Derivatives is considered tough from the CFA exam point of view.

7) Corporate finance: prep provider material should be sufficient.

8) Portfolio Management: Reading from the CFA books is essential.

Since the exam pattern changes completely, it is essential that one finishes the syllabus early and starts revising and practicing the model exams as soon as possible. To know more about the exam pattern please visit this thread:

CFA LEVEL 2 EXAM

If you have any doubt or wish to ask something,please post your questions/comments in the comments box below.

Last Minute Exam Advice

I want to wish everyone good luck on the Level 1 exam Saturday.  Here are a few last minute exam tips that I think will help you perform well on the exam.

Relax, you do not need to get 80% or 90% to pass this exam.  As a matter of fact, I really doubt that you need over 70% to pass.

Do not be afraid to skip questions.  Time pressure is a major factor in this exam and running out of time before you answer all the questions is a sure fire way to fail this exam.

Get the “easy” marks first and then go back to tackle the difficult questions.

You have 1.5 minutes to complete each question, some will take you 10 seconds to answer and other will require more than 1.5 minutes.  I suggest you read the question as quickly as you can and ask yourself; “can I answer this question?”  if yes, do it, if no, ask yourself; “can I eliminate any of the choices?” if yes do it, and if that is it, MOVE on!  If no, you should have already moved on!

When answering the questions, make sure you are framing your thoughts within the CFA curriculum.  Ask yourself; “where does this fit in to the CFA curriculum and what is the broad principle?”  The answers are usually more straight forward than you think.

Do not over think the question or change it into something “you want it to ask”.  Answer the question ask and do not assume anything else applies, unless you are given specific information in the question.

Make sure you know how to use your calculator.  I know this sounds odd, but have seen students make simple mistakes because their calculators were set P/Y = 12 and DEC = 2 (if you don’t know what I am referring to, then you are the person I am talking about!)

Lastly, study at the lunch break!  Yes, do it!  The exam is symmetrical, so if you don’t see questions on a specific topic in the morning, you can expect to see some in the afternoon.

I recommend taking the CFA Curriculum bullet summaries and EOC questions to review. Just rip them out and make them into your own cram notes!  Believe me when I say you will never use the texts as reference, so don’t save them.  Next year, well actually in about one month, you will get a brand new set!

So, relax, you’ve study for this, you know more than you think you know.  Go for the easy marks, eliminate choices when you can, skip the difficult questions (of course go back and guess if you must) and you will be on to Level 2.

Please look for my exam tips and strategies coming out in January.

Passing the CFA level 1

CFA Cheat Sheet: How to Pass Level 1

The CFA institute recommends students study 300 hours for the Level 1 exam. To put that in perspective, it is 7.5 standard 40 hour work weeks, on top of a summer job or school. The good news is that 300 hours is not needed for a student coming from a business undergrad. The CFA level 1 exam is essentially a test on all of the quantitative material learned within a four-year undergraduate business program, plus a couple hundred pages of new material on subjects such as alternative investments and ethics. The test is broken down into 10 sections of various weightings: Alternative Investments (3%), Corporate Finance (8%), Derivatives (5%), Economics (10%), Equity Investments (10%), Ethical & Professional Standards (15%), Financial Reporting & Analysis (20%), Fixed Income Investments (12%), Portfolio Management (5%), and Quantitative Methods (12%).

Recommended Courses

If you are considering pursuing the CFA designation, you can save yourself a lot of time and headache by taking both the advanced accounting and investment analysis courses offered at your university. At Queen’s University, these are Investments and Portfolio Management (Comm 324), and Advanced Accounting (Comm 311 and Comm 313). Any course on Investments and Portfolio Management will cover the basics of fixed income investments, derivatives, portfolio theory, and equity investments. These sections make up a large portion of the Level 1 exam. I will admit bond valuation, yield curves, and many other fixed income concepts are not my strength; but having taken a course on portfolio management, I found many of the CFA exam concepts similar to those that I had already learned in my course work. As for the advanced accounting courses, with 25% of the exam marks based on Financial Statement Analysis, it is essential to master this area. It is much easier to learn some of the more advanced accounting concepts over an entire semester of classes than to cram them into one month of studying for the CFA exams. This is why I would recommend candidates take at least one advanced accounting course in their final year of school.

Study Materials

The CFA Institute forces you to purchase their textbooks when registering for the exam, an excellent business model for them. The books cover every topic necessary for the exam and then some; in total the CFA books are 2600 pages long and can read very slowly. YOU DO NOT NEED THEM!

There are a number of alternative sources for students to use; I used the Kaplan-Schweser guides, which are half the length of the CFA Institute books and provide a much clearer explanation of the concepts. The Kaplam-Schweser guides also include multiple choice questions at the end of each chapter and full length mock exams covering all required material. These extra questions and mock exams are perfect to study from, as they are very similar to the questions asked on the real exam. The Kaplan-Schweser guide costs about $500, a steep price for any student, but it is much cheaper than the $1,000 fee to re-write the Level 1 exam if you fail on the first attempt. If you are serious about passing the Level 1 exam, make the investment, and purchase the Kaplan-Schweser guide.

Study Plan

Start studying early; I cannot stress this enough. This does not mean starting to study on your Christmas holidays, but definitely start before final exam period in April. I signed up for the Level 1 exam in January, and began studying in March. March is a busy time for many students, as final projects are due and preparations for final exams are just around the corner. I am not a big organizer, but a strategy I used to keep on task was to purchase a wall calendar where I recorded the number of hours I studied for CFA exams, completed school homework, or headed out with friends each day. While I never set a concrete schedule, I tried to study for the Level 1 exam for 10 hours each week in March, or an hour and a half each day. Some days I didn’t study at all for CFA exams - I had school work, or wanted to head out partying with my friends - but my calendar reminded me of my obligations. By the end of March, I had reached my 40 hour goal and was already 20% through the study material.

For the month of April, I did not touch CFA material; I had 5 exams at the end of the year and was very busy.  Once May 1 came, the intensity shifted up, and almost every hour I was awake I was either studying or feeling bad that I was not studying. May was one of the longest months of my life; it was like a never ending exam period. It was a gruelling time, and I barely went out with friends, but you get into a routine and can tolerate it.

The Final Week Before the Exam

During the final week before the exam, you should by now have covered all the material and be starting the mock exams. The real CFA exam is 240 multiple choice questions that must be completed in six hours, split into a morning and afternoon session with a two hour lunch break. When completing your mock exams, try to simulate the experience of exam day as much as possible. That means complete the entire morning half of the exam (120 questions) in three hours, take a break for lunch, then do the afternoon in three hours as well. Do not look at the correct answers until after you have completed the exam. On exam day you will have to second guess yourself and go into the afternoon session knowing you got some of the morning questions wrong, but you have to overcome this feeling. Once you have completed a mock exam, score it and see how you did. The CFA institute never releases what the minimum passing score needed for the examinations is, but no candidate has ever failed if they scored above 70% on the examination. The mock exams are a little bit easier than what the real exam is like on exam day, so shoot to get above 75% on the mock exams. Once you complete and mark your mock exams, take a step back and identify areas where you need to focus on studying going forward.

Exam Day

The night before the exam, stop studying at midnight at the latest. There is no point in cramming further; the CFA exam is a 6 hour marathon, and an extra hour of sleep will do much more than a couple more hours of cramming. I wrote the exam in Toronto at the Direct Energy Centre, in a room the size of an airplane hangar. You are writing with 4,000 other students, some are nervous, some claim to have not studied at all. Forget about what others say and just focus on the exam in front of you!

Final Thought

Having studied and successfully completed the CFA Level 1 exam, I can honestly say it was one of the most time-consuming and mentally draining tasks I have ever attempted. I am relieved to have passed the Level 1 examination, and truly believe that if any business student follows the tips I have outlined in this guide, they too can pass on their first attempt. I am looking towards next June when I will write the Level 2 examination with a mix of nervousness and excitement: I know it will be a daunting task, but I know with a great deal of hard-work, I will be writing the guide “How to pass the CFA Level 2 exam” this time next year!