Hi Everyone,
First of all, congrats on those who passed the level II and sorry for those who did’t make it this year. For those who didn’t pass level II this time, I don’t want you guys to be harsh on yourself. I’ve known a lot of super smart people at my work but they have managed to get CFA after failing level II once or multiple times. I’ve benefited so much from this forum while preparing for the exam, so I thought this would be the right time for me to contribute as well. I just want to share my thoughts and a few pieces of advice to those who just passed 1 and plan to take level II or those who failed this time but plan to re-take it next year. These are solely my opinions so please read it with a grain of salt, and also please feel free to share your experience and thoughts.
1.Start as soon as possible (A.K.A Don’t think the level 2 would be similar to Level 1)
I’ve seen a lot of people who crammed for the level 1 and managed to pass it. The biggest mistake these people typically make is to think that they can do the same thing for the level 2. I know a few can still study for like a month and manage to pass level 2 but I can guarantee that the level 2 is a different beast. I think Mark explains it really well in this video (https://www.youtube.com/watch?v=nIIV0TqXOnQ). For the level 2, you can pretty much pass it if you memorize all the core concepts and formula. Put it differently, if you were allowed to bring in Kaplan Secret Sauce to the actual exam, you would be mostly likely to pass it. You know formulas and just plug in the numbers to get answers. On the other hand, the level 2 requires a different learning strategy. You actually need to understand concepts and logic behind formulas. Most of the time, you need to derive inputs to formulas or need to understand what the results from formula mean. And thoroughly understanding a concept definitely takes longer time than just memorizing it. If you just pass the level I, I strongly recommend you to start studying very slowly from September. Just study 2-3 hours every weekend and try to read through the whole materials by December. You will forget most of stuff by December (I will talk about this later on) but it is important to understand concepts once. If you take the level 1 in December and get the result in January, I am sorry but I strongly recommend start studying right after you get the result. As you know, 2018 was an odd year where we had one extra month to study, but still I felt like I needed more time to study.
2.Buy the physical copies of CFAI text books.
I know we have already spent hundreds of $ into CFA, but extra $150 would definitely help you. I am not asking to read through the whole books. I found the CFAI text books extremely helpful for two reasons:
-
EOC (end of chapter questions): You really need to do these problems. I would not say that these questions are best representative of the actual exam, but they really force you to understand the concepts and formulas. Highly recommend to do these questions once you went through materials twice (they might be too hard if you try them right after reading through materials once). You might want to use a pencil for these and it would be good to do those questions again 1-2 months before the actual exam
-
When you need more explanations: I think you should you third-party materials (i.e. Kaplan) as a primary studying tool. But as these materials typically compress all the key materials into shorter books, they often miss logic or reasoning behind some concepts and formulas. If you have hard time understanding a specific topic, it is always good to refer to the actual textbook. Sometimes, it could be too excessive but usually helpful in understanding the concept (but I do not recommend reading the fixed income section – I will touch on this topic later)
_ 3. Aim for 80+ score _
I don’t know whether you guys watch NBA (probably not because we are sucked into this dark hole of CFA), but a player is considered really good 3-point shooter if his average 3-point field goal percentage is above 40%. Surprisingly, if you go to a game little bit early to watch them practice (or watch a youtube video of it), they make 8-9 out of 10 attempts. My point is that the real exam is stressful. Some people function perfectly well under pressure and some don’t. There might be a lot of questions on the topics you didn’t pay attention to while studying or you end up making multiple dumb mistakes. If your target score is 70 and you have studied to get that score, your confidence interval would be (no scientific backing) roughly 65 – 75. But if your target score is 80 and you have studied to get that score, your confidence interval is more likely to be higher (75-85). The higher target score forces you to study with a different mentality. I’ve seen a lot of people (especially for level 1) who decided to skip a few sections (or the whole topic area) because you can technically pass it by getting only 70% of the questions. Higher target score forces you to pay attention to every topic and concept (and I will talk about importance of it later) and to understand concepts rather than just memorizing them. Another benefit of this strategy is that it gives you confidence. 1-2 weeks before the actual exam, I was constantly getting 80-85% on practice exams, so I was pretty confident on the exam day and this confidence definitely helped me throughout the actual exam.
I know this could be an overkill and not the most efficient way of studying (especially if you are under time pressure), but I believe it is better to think “ah I studied too much for the exam” than failing the test by margin.
_ 4. There is no such thing as “core” materials _
I’ve heard a lot of people saying something like “oh you need to know only these 3 core sections of FRA” or “You only need to know these 4 types of equity valuations”. After taking the actual test, I think those statements are totally wrong. Every topic can be tested on the actual exam. I told myself several times during the test (over course without actually saying), “Man this CFA guys seriously asking about these?!” You will be surprised how many questions were on so-called “non-core” concepts. I don’t think it is realistic to read through and remember every section within the actual CFAI text books, but I strongly encourage you to carefully read through every section of Kaplan (or other third party materials), especially big topics like FRA and Equity. Kaplan is already very condensed material so if it is covered in Kaplan, it is a fair game that a question related to that concept shows up in the actual exam.
_ 5.Remembering is always easier than learning _
I mentioned the importance of starting early. But I often hear people saying “you will forget most of stuff anyway if you start too early” and I totally agree with them. When I first went through the whole Kaplan materials in December, I didn’t remember anything at all from the first book. Scarier thing is that when I finished reviewing the materials again in Mid-March and tried to do practice exams, I realized that I remember less than 30% of what I had studied. I am sure you will or had similar experience. But I can assure you that this is a natural phenomenon. I always think learning is like crafting a net. First time you read through the materials, there are only few strings attached to the net that everything will fall through. Every time you review the materials, more strings attached to the net and you retain more. The promising part is that it takes so much less time to review and remember stuffs than learning and understanding them for the first time. If it took 3 hours to go over one section, it will take only 1 hour next time you review it, and only 30 mins after that and so on. Don’t afraid of forgetting stuffs and start early!
6.Start practice exams early
I think the first time I started to do a practice exam was round mid-March, and I felt “I am Fu**ed”. The formatting of the practice exam is so different from the end of chapter questions from Kaplan and the level 1. This is when I realized you need to do more than just plugging numbers into formula to pass the level 2. I don’t ask you guys to start doing practice exams when you don’t understand concepts well, but it is important to feel what the level 2 questions are like by attempting to do a mock exam.
_ 7. Do not get intimidated by practice exams _
Here is one thing I have constantly heard from previous test takers and realized after taking the actual exam. The actual exam is so much clearer and shorter. I know people get intimidated looking at two page long vignette questions for the first time. I honestly don’t understand why all mock exams from third-party providers keep this long convoluted vignettes. Vignettes from the actual exam is so much shorter, mostly 1-page or shorter. Usually, one paragraph (3-5 sentences) is related to one question and you rarely need information from previous paragraphs to solve a problem. However, this doesn’t necessarily mean the actual exam is easier than third-party mock exams. Pay extreme attention to details. Don’t jump to conclusion too fast. Try to read questions and related paragraphs several times. There are some occasions when you need to calculate inputs based on information or they include some unnecessary information to trick you.
Lastly, some thoughts on studying materials
-
Kaplan: I used it as a primary studying tool. Very concise and easy to follow. Highly recommend. Little bit too concise on the fixed income section. Their mocks were okay but not very good representative of the actual exam in terms of vignette styles
-
Mark Meldrum: I found out about him pretty late. Didn’t have a chance to watch the full videos but *highly* recommend to at least watch his videos on the derivative section. You can purchase videos for each topic and it is really affordable (like $30). The biggest issue with the derivative section is that Kaplan is too brief and doesn’t explain the logic behind formulas and that the CFAI textbook is just nearly impossible to understand with its own series of notations. Mark does a really good job in explaining how to derive each formula and helps you solve any variation of questions. Did not purchase his question banks so cannot comment on them.
-Konvexity: Guys, this is a jewel. I’ve seen some posts in this forum about it and gave it a try about 2 weeks before the test. I feel so lucky that I found it. Their vignette seems so simple compared to other mocks, but honestly this is the best representation of the actual exam. A vignette is typically short and concise. But be aware that Konvexity is definitely harder than most of other materials. I think it is great to do their section problems and mock exams as a last check-up. This will definitely help you understand important concepts thoroughly and get you from 70 to 85. It is really affordable as well ($45 for section problems and mock exams). Please be aware that there are some errors and typos in problems.
-CFAI EOC: Also very important to do all of them (at least multiple choice questions). I think this is easy way to get yourself familiar with vignette style problems as well as to check whether you understand concepts rather than just memorizing formulas.
-CFA website practice questions: these are collections of previous mock exams provided by CFAI. I think this is harder than the actual exam given that their vignettes are so long and convoluted. But make sure to do them as I’ve found a few questions from the actual exam that initially asked the same concepts (or used the same traps)
It is getting late today and please bear with me for all the typos as I didnt’ have time to proof-read. There are so much more things I want to share, and I will continue to add to the list once I have time to do so. Always welcome to share your thoughts and advice on this thread and feel free to leave any questions.
Good luck with level 2.
