Ten things I wish I knew before taking the CFA Level 1 Exam!

“The CFA Program is a challenging endeavour and your candidacy is to be applauded”, believe you me, these are the last words you need to read accompanying the email from the CFA Institute. Unfortunately, more often than not candidates end up getting an email starting with these words instead of the much anticipated and loved “Congratulations” word.

Having read both emails, I feel that had I known a few things the first time, I probably would have escaped the reminder about how challenging the program is. Since I can’t re-write what already happened, at least I can write an article that might help candidates to avoid the mistakes that I did.

1.???Thy shou know thy calculator!

I can never over-emphasize (did you see what I did with double negatives, the Institute loves it a lot) how important knowing your calculator is. There are concepts in Fixed Income and Quantitative Methods that once you know your calculator, you might as well forget the formulae and still get the answers correct. It will save you a lot of time.?I use the Texas Instrument calculator and found that with some effort it is very easy to learn.

?There are also a lot of tutorials on YouTube on how to perform certain calculations using the Texas Instrument calculator. The mistake many people do is to wait till the last days to learn the calculator, that’s a huge mistake. I understand that candidates might not have money to purchase the calculator earlier and you are lucky to be reading this article because you can go and google play store and download the calculator for free.

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2.???Please read the Ethics from the Curriculum.

Due to the vast amount of material presented in the CFA Curriculum, many candidates do not have the luxury of time to go through it all especially those who are also full-time employed. It makes sense since other prep providers like the famous Kaplan Schweser, IFT and Fintree amongst many others try to summarise the most important information. In as much as that might work for the other modules, for ethics I recommend that candidates should read from the curriculum. The curriculum contains vast examples to explain the concepts in detail and help the candidate appreciate the intended learning outcomes.

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3.???Do a lot of questions and attempt mocks.

“Makeup in time what you lack in skill”, although Jim Rohn said this teaching sales representative I have taken the quote everywhere. Since the CFA is open to candidates from all degrees you might find yourself grappling to understand what is the difference between effective and key rate duration or any other concept for that matter. It is very common, the material is overwhelming and the questions might seem insurmountable, but like Jim said if you do not have the skill to answer the questions correctly, then spent a lot of time doing questions and mocks.

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4.???Fintree Crash Course

Courtesy of Utkarsh Jain and the team at Fintree, there is a 50-60 hours long crash course for level 1 of the CFA Program. Although the crash course was for the 2021 Curriculum, I am very confident that the material covered will still be relevant. This is free material, so there is no need to worry about copyright issues and you can download it and watch at your own pace.

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Jain gives candidates a challenge to write a mock exam before the crash course, then follow the crash course and write another one after and compare. It’s a cool challenge for

candidates to take. I thoroughly enjoyed the crash course including the anecdotes he used for students to remember some key concepts.

?Disclaimer! For Level 2 the Crash Course will not be free anymore.

?5.???Write the UWord Free Mock Exams

We all love free gifts, don’t we? UWord is a prep provider and they give CFA level 1 candidates a trial period for their package. During that period, you get 2 free mock exams along with countless practice questions. Bearing in mind that I might end up violating some of CFA Institute Standards if I continue on this trajectory, I will just end by saying in my opinion those mocks are a very good proxy for the actual exam.

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6.???Get some study mates.

I acknowledge that there are really smart candidates who can just study on their own and pass, and then there are candidates like me who after putting in much effort just slightly score above the minimum passing score. If you are the former you can ignore this, but if are the latter please get some study partners.

Two or three in my opinion are enough, especially those whose strengths complement yours. If you are strong with calculations, you might need a partner who loves reading theory because the syllabus has both. Because you are still reading this article up to this point I will give you a bonus, study with people writing an exam that is before yours. If you are scheduled for November, study with August candidates and please don’t ask me why.

7.???Register for the last exam day in the window.

Again, this is subjective but if you are not a skilled candidate go for the last day. I know the excitement that candidates usually have when pay the exam fee and choose exam day with their eyes closed. I highly suggest that you pick the last available day, trust me even if you start preparing well in advance you will always feel that you need more time.

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Usually, CFA exams start on a Tuesday and can stretch up to Saturday depending on the number of candidates in that window. I opine that you are better off writing on Saturday than Tuesday, after all, exam results will come out the same day but those few days will give you room to polish up some few concepts.

8.???Write corrections.

I know this sounds so weird considering the fact that you probably lastly did that back in high school if not primary school. However, I have found this to be very useful. Each time you write a mock or practice a set of questions, try to write down what the correct answer and read out why your answer was incorrect. If it’s a calculation problem, follow how they calculated it and compare it with what you did. Sometimes you will realise that your method is unnecessarily long and might have to use the shorter method.

9.???Watch out least likely and other negative wording.

There are many times when I knew the answer to the practice question but ended up getting it wrong because I missed words like least likely. The questions are usually structured in such a way that if you are not careful you end up answering the opposite of what has been asked. My advice is each time you feel like two answers are correct, kindly go to back to the question, those answers might be true but both are wrong.

10.?Create Mnemonics

I probably should have started with this, but good things come to those who are patient. Mnemonics are phrases, acronyms or whatever you can use to remember a concept, because of the vast material covered in the curriculum this might be very helpful. Since you are still reading my article, I will give you 2 mnemonics are encourage you to create your own.

In derivatives, there is a concept called put-call parity and sometimes you get confused on what goes to the left- or right-hand side. Worry no more, just remember “Sip Pepsi and Be Cool’, interpreted as Stock + Put = Bond (Strike Price) + Call. The skilled candidate sees this as completely ridiculous but trust me you will need mnemonics, maybe not for put-call parity but for something else.

?I remember in Economics after failing numerous questions about what happens to money supply when the government buys or sells treasury bills in the open market, eventually, I decided to formulate PE. As an analyst, I know the word PE from Price to Earnings Ratio but in this case, it reminds me that Purchase is Expansionary. Do what you got to do to pass, after all, no one will ever know that’s how you arrived at the answer.

I hope you will pass, I really do. But again, hope might be just another big disappointment waiting to unfold, so maybe you need to put matters in your own hands.