Why Skip "Alternative Investments"?

I’m coming to the end of my readings of CFAI books and a thought occured to me. Why do so many people skip or barely study “Alternative Investments”?

I would understand that choice if that section had been relatively big compared to its weight. For instance, if the section was 10% of the reading and only counted as 3% on the test, that would be a reasonable choice. However, that is not the case - the actual section is only about 2.5% of the total reading material, and counts as 3% on the test.

I guess alot of people who don’t study this section are under a time crunch and don’t mind wasting 3% of their score. If you are one of the people who didn’t study “Alternative Investments”, what was your motivation?

You pretty much nailed it, it’s a matter of cost/benefit in terms of the time spent studying. It’s not like people view these things in terms of “2.5% total reading material”, but more that that time may be better spent ensuring FRA is well-understood. If there is ample time, then of course there’s no reason to skip any section as you want to maximize your points.

this is a stupid idea !! easy points…

Yeah, don’t skip stuff. Especially not this early, you have plenty of time if you focus

You can throw away at least 72 questions (assuming 70% is always a pass, which seems to hold). Even random guessing on AI should net 2 or 3 correct responses, out of a total of 8 questions. The argument of how much reading is in a section dictating whether to study it assumes you are at least as good with AI as compared to everything else, which is fallacious. I scored <50% on alternative investments (i.e. no better than random guessing would suggest), and I don’t regret barely skimming the material for a second.

Having to skip L1 material? It’s really basic stuff people…

Agreed. I just learned it. Although I had six full weeks to prepare while working full time. Seriously, if you’re having to skip full sections, you don’t want what LII has to offer. It’s one thing to prioritize and hit some sections more heavily than others, another to just totally skip stuff, but to each his own.

people skip it because they don’t think straight under pressure. AI is more bang for the buck. Same with Derivatives.

It’s also a waste of my time. In the weeks before the exam, I was taking a full schedule at school, studying for Exam MLC, applying to grad schools, working part-time, and preparing for the College Fed Challenge. Like I said, you can miss every AI question and not even be close to at risk of failing. So, in a test where you can’t do better than passing, what’s the point of forcing yourself to learn something insignificant? The opportunity cost is simply too high. Of course, I might be taking some personal offense to your comment because I didn’t pay any attention to AI and I understand material much more complex than CFA Level I facts.

I remember when I was in undergrad and thought I had it all figured out… Ahhh the good old’ days

The L2 smackdown isn’t far off. And you can’t pull that “ignore this section” crap anymore. L2 topic weights for: Alternatives 5-15% Derivatives 5-15% Want to gamble on that? L1 was designed for everyone to pass, it gives the masses awareness of the charter, oh and lots of revenue.

Would be pretty stupid to ignore AI if you’re reading Schweser notes. Took all of 90 minutes (tops) to burn through that section. Free points as far as I’m concerned. Will compensate some points I’ll miss on in FRA.

That’s why the passing rate is 40%, right?

It’s a good thing I didn’t use non-CFA study materials then, because I ignored it and it wasn’t stupid at all to do.

Yes that is right. It’s quite a shame too many people don’t take advantage of it.

Alt questions are so easy, you would be stupid to skip it. It was like 25-30 pages in the study notes and most of it is just definitions.

^1

Skipping isn’t a good idea especially when it comes to a whole SS. If using Schweser one can easily nail AI. Plus LII would have details on these topics and allegiance with the basic concepts in LI is highly required. My motivation was to score above 70 in AI which I did as there were only 2 LOS. Ample time is left in the exam so better go for AI.