Fixed Income, general thoughts and difficulty of exercises

CFA Level III
#1

I think the fixed income readings are probably the most difficult, but then the given exercises (CFAI Books) are way too easy, anyone the same opinion?

Are we expected to know how to calculate Maculay duration, cash flow yield, portfolio dispersion, convexity (all this is done in the white text to explain the concepts, no blue boxes and no exercises)

Is there another source of exercises for fixed income (and equity) since all the old mock exams are not relevant anymore?

#2

You should know how to calculate them (it’s impossible to believe that anyone would consider themselves educated if they couldn’t), but you won’t have to do these calculations on the exam.

(Well, maybe convexity if they give you all of the necessary bits, but even that’s quite a long shot in my humble opinion. That’s not the purpose of this exam.)

#3

I agree, in fact I find it useful the example they show to explain those concepts… I also thought it’s too much calculation for the exam…but according to Marc Lefvebre we should know all those formulas and do the calculation for the exam…

Any opinion about the excercises (not) difficulty compared to the material?

#4

Sorry: I don’t quite get your last question.

(It’s Friday, and both of my neurons are spent.)

#5

While FI is heavy (15-20%), I think it’s doable despite the lack of practice mocks available. Lots of EOCs and online questions, and the concepts are quite intuitive (e.g. barbell vs bullet, excess return, immunization, etc). I’m a bit concerned about Equity, which is 10-15% of the exam, and again only has three years of relavant mocks to practice with. The EOCs were too easy, The online questions were mostly definitions and qualitative regurgitation. There’s a lot of qualitative “pros and cons” type sections, which makes Equity a bit of a wild-horse for me right now because on one hand the questions are either too easy (like some behavioral bias questions), or require short-term memory recall (differences between bottom-up/discretionary and top-down/systematic wrt diversification).

#6

I agree with you about equity.

Regarding Fixed Income I also think that the EOC and online exercises where too easy compared to the material… I am a retaker so you know what I am meaning…

#7

I’m doubtful they’ll ask us to calculate the Convexity of a portfolio, even though everyone at lvl 3 should know what convexity is and what to do to sell or buy convexity.

If it comes down to recalling the formula for convexity and calculating it, I’m not sure I want to pass that exam.