Breaking Down the CFA Exam

The Certified Financial Analyst exams are a series of tests that measures the competency of financial analyst’s and is used to judge how educated applicants are, as well as how well they are likely to perform under extenuating circumstances. The CFA program, which stands for “Chartered Financial Analyst”, covers a wide variety of topics such as investment management, stocks, bonds, derivatives, financial analysis, and other general knowledge related to the world of finance. In addition to these topics, ethics, economics, and portfolio management is emphasized within the curriculum. It is regarded as a very difficult. Many hopeful individuals seeking the CFA charter awarded upon completing the program and passing the exams usually spend over 900 hours studying for the entirety of the exam over the course of 4 years, and up to thousands of dollars on mock exams filled with CFA practice questions. Websites such as AnalystPrep provide CFA notes and practice questions that will greatly ease the process of studying for this extensive exam. Charter holders possess many very rewarding benefits that will likely land them where they want to be in their respective careers, giving them vast opportunities and putting them far ahead of other applicants who haven’t passed or attempted the CFA exam.

The curriculum is divided into three levels of study. The first level is an introduction of what you will be learning throughout the program, and puts a primary focus on the tools you will need going forward for the sequential levels you will face in the future. This portion of the CFA exam will include 240 multiple choice questions, divided between two different sessions, each three hours in length. Attending both sessions is mandatory in order to be given credit for both attending and completing the exam. Average pass rates on this section of the CFA exam hover around 40-45 percent. Evaluating assets, analyzing finances, and managing portfolios will be emphasized on this level of the test. Mastering the material and implementing these strategies learned in the first level will be the foundation of doing well on the following levels of the CFA exam. can help you prepare for the CFA exam.

Breaking Down the CFA Exam

The second level of study increases in difficulty and takes the tools you were taught in the first section of the exam, and focuses on the applications of those tools and techniques. Asset valuation will be a primary focus on this level, as well as its inputs such as quantitative methods and economics. It will test you on much more complex analysis than those found in the first level of the CFA exam. Level 2 is split in-between a morning and afternoon session each three hours long similar to Level 1, however in this case there will be ten item set questions each that will total 120 questions, compared the first level that had double that number. Each question will be worth three points each with no penalty for an incorrect answer. The pass rate for this section is marginally higher than those in the first level of study. The average results for passing this section is 45%. This slight increase is likely because the individual wishing to acquire a passing grade for the second level of the exam have already passed the first, and are more likely to possess the work ethic demanded by the CFA exam.

Finally, the third and final level of the CFA exam maintains a focus on combining all the concepts and strategies learned in the preceding levels, and combining them to develop a set of skills necessary to become a more proficient financial analyst. Portfolio management, as well as its inputs including equity management, and investing in derivatives are a primary focus in the final section of the curriculum. Level 3 is comprised of two sections. The first section includes eight to twelve essay questions, with 180 total available to earn. CFA practice questions can be found online to assist you in knowing what to expect out of the real CFA exam. They will likely include demonstrating, justifying, and calculating various materials that is expected out of you to have learned and understood. The second section is similar to what is seen on Level 2, and includes ten item set questions. The upward trend continues in pass rates in Level 3. 50-55 percent of hopefuls pass this level.

The CFA exam requires commitment and desire in order to become a charter holder, but is regarded as worthwhile to most who have used the certification to excel in their field. With the proper study techniques such as using CFA practice questions and notes, gaining the charter is an achievable feat. Strategies for preparing for each level may differ based on the layout and material of each exam, but an inspiring individual will find a study method that is adequate for them. Embarking in this commitment is a decision that will likely greatly affect your future for the better if you have what it takes to achieve a passing grade on the CFA exam.

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