Level I CFA Exam Strategy

Joe Hogue's picture
CFA Exam Topic Weights

I usually start posting on a site with an introduction of myself, what I expect to cover and how I am going to help you pass the CFA exams. With about nine weeks to exam day, we have little time for the touchy-feeling welcome aboard.

The quick and dirty: I passed the level 3 CFA exam last year and EARNED the right to the designation in September. I am the Communications Chair on the Board of the CFA Society of Iowa and an economist for the state.

Over the next nine weeks I am going to spend most of the time on specific topic areas and things you can do to pass the CFA level I exam. We’ll spend some time with general strategy and things you need to consider for all three exams as well. To do this, I need to know about you as the candidate. How long have you been studying? What resources and study methods are you using? In which topic areas or study sessions are you the weakest? Reply to these in the comment section so we know what we need to do to get you over that first exam!

Within the rest of this post, I am going to cover a general strategy for the level 1 CFA exam. This is the strategy I used. It worked for me. You need to decide if it will work for you, whether pieces of the plan or the whole thing.

You need to be the Tortoise AND the Hare

There’s no time left for slow and steady. It’s April and that light at the end of the tunnel is a six-hour freight train coming towards you. If we were earlier in the season, I would say hit everything. This is stuff that will make you better at your job and you will need it in the CFA level 2 and 3 exams.

At this point though, you need to focus on exam points.

The graphic above is approximate topic weights posted on the CFA Institute website. A few things should become incredibly clear looking at the table.

  • The Institute wants you to learn Ethics! It’s a big chunk of the first exam and the material is basically identical through the other two levels. The sooner you learn the Ethics material, the easier these exams will be.
  • Ethics, Financial Reporting & Analysis, Equity, and Fixed-Income are more than half the test. These are also the most heavily-weighted topics in the level 2 CFA exam. These are your ‘core’ topics.
  • While it is not evident from the pic, the level 2 curriculum for quantitative methods builds heavily off of the level 1 material. It may not be worth as much as FRA but you need to pay attention here as well.

Five of the ten topic areas are worth more than two-thirds of the exam! Here’s how to use that:

  • Mock exams are extremely important. You might not sit down to a full six-hour practice, but do at least one half-exam each week. Most question bank programs will randomly generate an exam with the approximate topic weights. After each test, dump the results into a spreadsheet so you can follow your progress overall and by topic.
  • The Institute has said that no candidate with a score above 70% has ever failed the exams, so that is your MINIMUM goal. Aim for at least 80% in the core areas (Ethics, Quant, FRA, Equity, Fixed-Income) and for at least 70% in the other topic areas. With around ten or more half-tests worth of scoring data, you will be able to put a confidence band around your score for the exam (gotta love that quant methods). Use this to see where you need to focus your studying the next week.
  • Always do at least 30-minutes of practice problems after reading a section. Then do another set of practice problems on the same reading the next day. This is going to force your mind to recall the information and turn it into long-term memory. Ever get somewhere in your car and not remember the trip (from zoning out, not from beer)? The same thing can happen with just reading the material. You HAVE to test your recall with practice problems.
  • If you miss a problem, read the solution. If it seems completely foreign then you need to hit it until you understand the material.
  • Try to hit the material through different medium (i.e. reading, watching, writing, listening). Some people are visual learners, others are auditory, but everyone can benefit from having the material presented in different ways. This can be some pretty flat stuff at times, you need to mix it up and keep it fresh.

  • My schedule was always:

- Watch Videos on Monday
– An easy beginning to the week
- Read the study guide on Tuesday
- Sometimes this is Tues/Wed for long sessions
- Skim through the official curriculum on Wednesday
- Thursday, I do the end-of-chapter and blue-box questions from the curriculum
- Friday was my day off (I earned it)
 - Saturday is for mock exams
 - Sunday meant reviewing all topics (in order of weakness on exams) through flashcards, summary sheets, practice problems, etcetera. Anything that would help me review a section in an hour or two.

      *Keep in mind, I am doing practice problems after studying each day. You’re not done until you’ve hit some practice problems. It’s a tough schedule but only for a couple of months. Hit it hard now and you won’t have to be the 50% that will have to repeat it next year!

Wednesday, we’ll review the Ethics material and how to ‘understand’ some of the issues presented. Despite going through three years of basically the same material, the topic gives candidates problems because the Institute can be incredibly vague with their questions.

Let me know where you are at in your study plan and what topics are giving you problems. ‘til then, happy studyin’.

Joseph Hogue, CFA

abdullah1989's picture

Very Insightful. Thank you. 

awsamia's picture

Mr. Hogue, thank you for the very insightful article.  I was wondering if you could assess my planned study strategy for the June 2012 Level I exam.

Here’s where I stand right now.

I have just worked my way throught the entire curriculum.  For each SS, I watched the Schweser videos, read through the curriculum, and worked the end of chapter practice problems.  I also made outlines based on the videos/readings/problems first by hand and then typed them up to reitteriate the information.

I am currently not working and am able to study for a good portion of the day every day (with occasional breaks)

Here’s my plan for the final 2 months.

I first plan to go through the material once in order of SS, allocating 1 day per SS starting with SS1 and ending with SS18.  For each SS, I plan on re-watching the videos, reviewing my outline multiple times, working all of the associated practice problems, and making flashcards for the important terms/formulas in each SS.

After working through the entire curriculum in this fashion, I then plan on spending 17 days going through the material again in order of exam weights starting with the lowest weight and ending with the largest weight so that this material is the most recent in my memory, allocating the 17 days based on the topic’s weight.

Day 1:  Derivatives & Alternative Investments

Day 2:  Portfolio Management

Day 3:  Corporate Finance

Day 4-5:  Equity Investments

Day 6-7:  Economics

Day 8-9:  Fixed Income

Day 10-11:  Quant Methods

Day 12-13:  Ethics

Day 14-17:  Financial Analysis and Reporting

During these 17 days, I plan on working as many practice problems as possible, reading topics I haven’t yet fully mastered, memorizing formulas, and making sure I can answer all of the LOS for each reading.

This will then leave me with 21 days remaining.  I plan to spread 7 of these days out throughout the next 2 months for breaks and use the remaing 14 days prior to the exam for final reviewing and mock exams.’

Sorry for the lengthy post, I am just trying to allocate my time in the most efficient manner possible and would love your input on anything I should change or modify.

Again, thank you for your time!

-Andrew

Joe Hogue's picture

Hi Andrew,

Going through the material multiple times and using multiple media (video and reading) is a good idea. Sounds like you are well on your way and definitely ahead of the pack.

while you mention practice problems, it wasn’t clear if you are doing any practice or mock exams. With the time available, you should be able to complete one practice exam (2- three hour tests taken consecutively in the same topic weights as the actual exam) per week. Record your scores in each topic area to make sure you are confidently above 70% in each area ahead of the exam. This will also help you adjust your study schedule.

Thanks for the comment. 

Eltomzo's picture

I have not bought any study guides, but just ploughed through the CFAI books over the past 5 months. My main effort has been focused on typing up my own condensed notes, which so far run to c. 200 pages. The intent now is to go through these notes, cross-comparing them with the LOSs and ensuring every one is covered.

Am I the only one relying on large part on notes I have made or do other people do something similar? As in how comprehensive are your flash cards how much do you think they matter?

joeyd72's picture

I wish I would of seen this thread earlier. I’ve throughly reviewed each section but still a bit weak in a couple section. What do you suggest I do with one day left?

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