9 tips for the CFA exams, from the man who writes the questions
Passing any of the Chartered Financial Analyst (CFA) exams is a lot easier said than done.
Pass rates cratered during the pandemic, with Level I (generally considered the most difficult of the three exams) at one point having a pass rate of only 25%. They have recovered a bit since, with pass rates for Levels I and II hovering around the 40% range.
Christopher Wiese, CFA, Managing Director of Credentialing at CFA Institute oversees the teams that develop and deliver the CFA Program curriculum and examinations.
Here is his advice for improving the chances for passing the CFA exams:
Anecdotally, candidates report that the CFA exams are difficult not because of the amount of information necessarily, but the breadth of it – some students even choosing to avoid entire topics in the hope that they don’t appear on the exam. The solution to that is quite straight forward – start earlier, and you’ll have the time you need to cover all the topics you have to.
“Many candidates underestimate the time that will be required to learn the material and adequately prepare for the exam. Your studies will be much more effective if you give yourself a long enough lead time to allow for a steady and consistent study pace,” Wiese says.
Know the format
The CFA Level I exam consists of 180 multiple choice questions, to be answered in 270 minutes (four a half hours), with a short, optional break at the halfway point.
The Level II exam consists of 22 case studies, called “item sets”, each with four multiple choice questions attached, for a total of 88 questions. The exam lasts 264 minutes (nearly four and a half hours), with a short optional break at the halfway point once more.
The Level III exam has a mix of five or six item set questions and five or six short-answer essay questions, some of which require candidates to make calculations. It has the same time format as the Level II exam.
Focus your efforts on the curriculum
“We write test questions only from the official curriculum, which is fairer for our candidates. They will not be asked questions from outside of the official materials. Prep provider materials and classes can, however, play an important role in your studies, particularly if you need a bit of extra help,” Wiese says.
Manage your time efficiently
1.5 minutes per question is rough, especially for more than four hours, and requires both diligence and pragmatism. If you’re stuck on question, skip it, and flag it for any time you might have at the end of the exam.
As you read item sets, use the highlighting tool to note important information you will need to refer to later.
“For the essay questions, focus specifically on what is being asked and respond accordingly. Providing rationale or notes about your thought process might help in a partial-credit situation, but consistently providing robust answers that go beyond what was asked for in the question will only chew up valuable test time,” Wiese says.
Practice, practice, practice
“Do the practice problems and when you get something wrong make sure you take the time to understand why the correct answer was correct,” Wiese says.
“Make sure you also take the mock exams. Not only will practice problems and the mock exams help give you a sense for how we will test concepts, but the mock exams can be tremendously helpful at evaluating your pace and ability to get through the exam in the time allotted,” he adds.
Plan exam day logistics
There’s plenty to be stressed about just with the exams, your future, climate change, and God knows what else. Don’t add last-minute worries that you can avoid, easily.
As Wiese says, “don’t get tripped up or stressed out the day of the exam. Make sure you are going to the right test center, that you know how to get there, and you know where to park. Scout out the location ahead of time if you have to.”
Make sure you have your valid passport and approved calculator, too.
“While it may sound obvious, familiarizing yourself with what is and is not allowed within the testing room cannot be overstated. While there are some provisions for storing personal belongings outside of the testing room, you are generally better off leaving things at home that you can do without,” Wiese says.
There are no trick questions
“We do not put trick questions in the exams,” Wiese says. “The exams are challenging enough without the need for any tricks; overthinking or overcomplicating each question will tend to just chew up time that you need to get through the whole exam.”
If you come across a question that you find tricky, leave it to the end. Approaching it with a fresh perspective can often change things significantly.
Take care of yourself
It’s tempting (with any exam) to cramp until the last minute, and especially the night before the exam. But that’s self-defeating – and a lack of sleep can have serious impacts on your exam day performance. Rest, exercise, and have as much sleep as you possibly can the night before.
"You want to perform at your best. Get a good night of sleep and eat well. And, on exam day, be sure you wear comfortable clothing and dress in layers. The last thing you want is to show up at the exam focused on tiredness, hunger, or being hot or cold,” Wiese says.
Consider deferring (very carefully)
Life sometime sucks, and that’s okay. You can defer your CFA exams, and it won’t be held against you (not officially, at least) – but be aware, there’s more work than you realize when you kick the can down the road.
“When we look at aggregate study behavior for our online learning platform, we tend to see deferred candidates not allotting enough prep time for their new test date. If you prepared once and had to defer, don’t assume a quick refresher six months later is going to suffice. It’s a big test and in the grand scheme of juggling work, life and career priorities, information retention decays faster than people think,” Wiese says.
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