Is the current market situation likely to influence the type of questions asked in the exam ? Thoughts anyone ?
We have never really seen this, though every year someone expects it. The CFA exams are not especially timely or responsive to current environments. The world was essentially wiped out by securitization and credit issues and yet how much stuff has been added to the curriculum about CDO’s or even basic credit stuff. You could theoretically be a CFA charterholder and not understand a sentence like “People were buying mezzanine CDO debt thinking it was AA and it turned out to behave like B subordinated trash”
I think they’ll test us on the material in the curriculum this year, as they’ve done in the past. Are you worried about them testing us on stuff from, say, the financial press that’s not in the curriculum? It’s hard for me to imagine that.
I think the bigger issue is: when answering essay questions will the graders accept responses that reflect the reality of our current financial markets, or do they only want curriculum regurgitation
Not sure exactly what that means, but I’m certainly going to assume they’re looking for “regurgitation” of the curriculum.
I am not sure on this, but I vaugely remember reading a summary of the examinations from the CFA Institute that says questions are designed based on the curriculum with an eye on current market conditions. Also, if you read they’re detail on LOS, it doesn’t make you feel great --> https://www.cfainstitute.org/cfaprog/courseofstudy/los.html. That being said, unless a particular investment vehicle like a Mezzanine CDO is discussed in the curriculum, I doubt they would put it on the exam.
I’ve probably already made my view clear, but just in case, if anyone is debating between 1) studying the curriculum (or materials based on the curriculum, e.g. Schweser) in preparation for one of the upcoming CFA exams, or 2) studying something else in preparation for one of the upcoming CFA exams, I think it’s obvious that he or she should choose option 1).
I decided to forgo the curriculum for L3 and instead got a subscription to Business Week. I’m pretty certain I’ll be more than prepared.
stromey Wrote: ------------------------------------------------------- > I think the bigger issue is: > when answering essay questions will the graders > accept responses that reflect the reality of our > current financial markets, or do they only want > curriculum regurgitation If you mean will graders accept answers that reflect economic realities that conflict with the curriculum the answer is a resounding no. You should pretend that graders are completely expert at the curriculum and know absolutely nothing beyond that.
I think that ignoring current economic reality in fact is good for the exam, since otherwise it would be easier to prepare and many people could ignore some essential knowledge and still pass. Work experience requirement ensures that you know something about economics, while questions of the exam ensure that you are also theoretically prepared.
I think this is a great question and I am wondering how far in advance an annual level III exam is developed. I think the question here is to what extent will curriculum topics applicable to the crisis be emphasized in the June 2009 exam: Will it increase likelihood of seeing - Credit Derivatives (especially swaps) questions and credit risk/derivative questions - Risk management questions (limitations of risk management tools) - Will they pull back some securitized debt questions (from LII curriculum) like they did for the “cash and carry” concept last year Does anyone no how far in advance they finalize these test and so how fully can they incorporate hot topics if they were so inclined ?
I think effort spent trying to identify what might be “hot” topics and know them especially well will very likely be effort wasted.