CFA Level 3 Tips

CFA Level III
#1

If you’re reading this you’ve made it to L3…Congrats!! If you follow this advice it will give you a better chance of passing.

I passed L1 in Dec 2012, passed L2 June 2013, failed L3 June 14 (band 5) and passed L3 June 15.

L3 was undoubtedly the hardest exam for me, although certainly not the hardest material. It is purely the format of the morning exam which is the struggle; the time keep, how to structure your response concisely and answering the actual question which was the difficulty.

Read and learn the material:

Use the learning technique you’ve used in the other exams, be that CFAI material, videos, or Schweser. Some people swear by CFAI; but for me personally, I used it to supplement the material I couldn’t fully grasp from the Schweser. I also did all the BB and EoC questions at least 2 times prior to the exam, ensuring I knew the method of answering the questions.

The MCQ are pretty standard and you should be familiar with those from L1 and L2, the questions on the exam don’t differ too drastically from the mocks and there are some questions in the actually exam which follow the format of the BBs, so make sure you do these and really understand them.

Write out notes:

For me personally, I wrote out small notes. By the time of the exam I had 8 pieces of paper with the whole of CFA L3 written on it. I read these as many times as I could over the last few weeks. You could use flash cards or something similar. But trust me, use something, because when you’re in the exam hall and they give you a 2 page article and ask if it displays anchoring and adjustment or conservatism bias, you really wish you had remembered the differences between the 2 and the nuances that differentiate them. Notes or flash cards are important.

Practice past papers (the golden ticket):

This is the key. Do 8yrs of past papers once and learn from each one, what mistakes were made and the method of answering IPS questions concisely and accurately. Once you have done all papers at least once, print out all the questions from each of the last 8 years on individual pieces of paper. Staple each set of questions into a booklet, so you should have 16 different derivative questions, 20 different IPS questions, 8 different GIPS questions, 20 different fixed income question etc… all printed into a booklet. Do these questions again one topic after the other and do it multiple times so you know it off by heart. You will begin to see patterns emerge as to how CFAI like to ask questions. This was the key to me passing this year and it enable me to quickly answer the questions.

IPS

There is a very simple way of doing the Individual IPS questions. You need to write a SALIE (statement of assets, liabilities, income and expenditure). Then incorporating taxes and some simple formulae, you can calculate the required return. A SALIE are key.

There is a pattern with Institutional IPS, they will always ask you a questions from 2 or 3 different types of institutions. Make sure you remember the differences in institutions and their risk tolerance and how to calculate the required return. This is easy to learn and it is key!

Overall

CFA L3 is a different beast to the other exams. It’s less quantitative and more qualitative which is why I initially struggled. But when I broke the questions down into quantitative measures or formulae, I was able to use that to memorise certain bits of the exam and material that only a qualitative brain can assimilate easily.

I hope this helps and good luck! I hope to be on this forum answering questions to help other pass this exam!

#2

Thank you, much appreciated!

#3

That’s my main message also. Congrats

#4

I went 3/3 (D12, J14, J15), and I completely agree regarding the prior tests. Doing as many CFAI problems is no doubt the best way to set yourself up to pass.

In addition, though, and there is simply no way I can stress this enough, CRUSH. ETHICS. It is by far the “easiest” to learn in my opinion, and the problems have less deviation in their scope and the way they can be asked. Candidly, I feel like my L2 and L3 scores were marginal, especially L3, but at every level I got >70% on my ethics and I truly believe that was my saving grace. So, if you are wondering whether or not to focus on ethics, the answer IMO is unequivocally YES.

#5

I just passed level 3 and I can attest to the advice in the OP. everyone’s learning style is different; however, I think a solid majority will benefit from practising the morning session repeatedly. By the time you write the exam you should feel very comfortable writing the essay section.

#6

Yup. The above is great advice. Always use what has worked for you in the past before, with the caveat that L3 morning exam might need you to tweek your ansering style a little.

For the morning exam, there is no easy way to get to terms with it. You’ll need to set aside blocks of 3hours to actually do a whole morning exam at a time. And when you grade it, be harsh. Understand each question, your answer, why you got it wrong and redo the question a few days later fully… Not just in your head. Don’t just answer questions in your head while practicing. Write, write, write

#7

Absolutely! There are about 500 ethics questions in the Schweser QBank, do them all.

#8

Write, write and write some more. When you’ve finished that, write a little bit more! End of the day, by L3 you’ve gotten pretty efficient at answering MCQs. Focus on writing from the very beginning of your study program. Your passing self will thank you next summer.

#9

I passed Level II recently and plan to write the Level 3 exam next year. Thanks for the tips, is it possbile for you to send the last 8 years papers via email or can you tell me where I can find them.

Thanks

#10

Good tips!

#11

8 years of old exam might be bit excessive - and remember every year curriculam changes slightly. I would focus on last 3-4 years actual exams, and plus some mocks.

The imporatnt thing to remember as you do the AM - you’re trying to learn the process - quickly scanning question, thinking it through, and neatly organzing answers in alloted time. Don’t expect same or similar questions to be in the actual exam.

The term “essay portion” is bit misleading - i learned it hard way failing the first time. You’re not required to or should write full sentences wasting time, and giving too much details. The art is to learning to write compact answer with bullet points, formulas, and neatly organzing one question after another. And finishing each set with alloted time.

#12

Thank you for your tips Prozario, can you tell me where I can find the last 3-4 years exams?

#13

This is really helpful! Thank you! heart