+1 to this.
For the record–I know absolutely nothing about calculus. I took a college algebra/business calculus class when I was in grad school, and I do not remember a single thing about the calculus part. And I’ve passed Level 2, and 95% sure that I passed Level 3.
If you can do college algebra, you’ve got more than enough math skills to pass the test.
^ +1 to bchad and greenie. My highest level math that I remember was a statistics class. Never took calculus. CFA math is just algebra, so the faster you can accurately figure it out, the better.
Just remember once you’re in a job, calculators and computers do all the tough math anyway. There are very few jobs out there that actually require that you know advanced math (beyond basic stats and algebra) IMO.
I’m confused as to what people are calling “college algebra”, cause the only algebra I ever took in college was linear/matrix algebra and that’s waaaaay beyond CFA. If I recall correctly, Algebra I was in middle school, and the basic 4 years of [US] high school was Geometry, Algebra II, Trigonometry/Precalc, and Calculus in that order (maybe switch the first two).
In the US, college algebra is probably what you would call Algebra 2. It’s required for most (if not all) US bachelor’s degrees. Of course, some majors require that you take calculus and trig and diffyq’s, but if you’re majoring in History or English, then that’s all the math you have to take.
if you don’t love math, good luck. strong correlation between Math and Finance.
I am not sure if i agree with you. Yes, most trivial questions are plug and chug, but during the exam, how often do you get a question like that?
Remember those questions on relations between different ratios, if something goes up or down, how is it going to affect ratio X and Y. And all those questions on fixed income, if you intuitively understand the concepts you are likely be able to understand what the question is asking in the first place, but if you are not grasping the mathematical concept behind the formulas, you may interpret the questions incorrectly (or simply don’t know what they’re trying to get at).
Similar to tax questions on Level 3, i looked at the formulas and they are crazy looking, but if you understand how to derive the answer mathematically, you don’t have to memorize the formulas at all.
There are alot of areas where questions are asking you to interpret the formulas as well (and not straight forward plug and chug), and a lot of them ask you indirectly and test your knowledge on the underlying calculations like derivatives and commodities.
agreed. if you know how to derive the formula and the intuition behind the concept you don’t have to memorize as much. If you had to actually memorize every single formula in the CFA program, god bless you. You are a better man/woman than me. Some of the formulas you will know already anyway just through work/prior educational background.
I think what it’s coming down to is what do you mean by “good at math” particularly since you did say you are “good with numbers.”
For a lot of people, being good at math means that you can do calculus easily, have an understanding of linear algebra, differential equations, and stuff like that. The CFA definitely does not require that level of mathematics.
If by “good with numbers,” you mean it’s not too hard (or even easy) to do the kind of algebra that you typically master before starting calculus, then you should be fine. There’s a fair amount of “what happens to this ratio if that number increases/decreases” types of questions, but if you understand what the ratios mean or indicate, it’s usually not that hard. Probability and statistics may take a little extra work, but to serious statisticians, the CFA stuff is really just baby steps and shouldn’t be too hard to learn with a few drills.
are you serious? I hope this is a joke
You obviously haven’t been here very long.
Fair enough.
For L2 and L3, the questions get more tricky so memorising the formula isn’t good enough. You need to understand what the formula is doing so you can apply it properly to the specific set of circumstances you are given.
You’re right, it’s not always plug and chug. However, you don’t need to know how to derive the formulas in order to understand how they work (eg, that a plus sign indicates that two things are positively related).
I interpreted this person’s situation to be that they are good with numbers (ie, capable of abstract though) but don’t know all the ‘procedures’ that one needs to know in order to, for example, solve differential equations.
@ardeshir said “ Does any one think that a good knowledge of Maths is essential to complete the CFA examinations? Or will I be fine without it?”
If you are embarking on CFA good knowledge of maths may be ( ‘may be’, not ‘is’) an asset ( ‘may be’, not ‘is’ , otherwise all those who are good in maths would have been successful in CFA) but by no means “good knowledge of Maths” which include calculus, advanced algebra and trigono0metry etc, is not at all ‘essential’ for completing CFA. With reasonable intelligence (which in any case is a minimum expectation to clear all levels of CFA) and commitment you may learn the additional maths and stats that you would need to complete the curriculum. In worse case you have to provide a few hours extra (not more than 25-30 hours) to be at par with those who are good in maths and are doing CFA with you. If you are good numerically, your working as credit risk analyst has made you understand the basic principles of finance/risk management and are prepared to update your maths knowledge as and when you need – go ahead and enroll. But be advised - it may not be a cake-walk!
By the way, have you seen the details of FRM as it may be highly relevant to your work /field.
Where there’s a will, there’s a way … that’s the way I view it.
If you can add / subtract / multiply / divide
and have half a brain.
you can handle the math on the CFA exams.
+1
And to add to that - you’re from the UK, so if you were capable of passing your GCSE Maths exams then you will be just fine.
If you feel your basic business mathematics is weak I’d recommend the following site: http://ci.columbia.edu/ci/premba_test/c0331/s1/index.html This is essentially a free online course offered by Columbia. Source: Arif Irfanullah
Basic algebra is all that is required. Accounting and equity analysis make up a huge part of curriculum. Not much math involved here.
knowledge of maths actually is not vip, but if you studied it in the past, it adds to understanding and speeds up coverage of relevant study sessions
though remembering/understanding how to differentiate is one thing that gives huge advantage in understanding option greeks in level II, otherwise you will have too learn the relationships.
and probability theory/statistics was extremely useful in level I quant staff. Again because otherwise it involves painful memorising.
Level II quant is more of econometrics stuff, which i studied before but didn’t remember a thing. But in the end it is again about memorising all those tests like DW.
If you take a big picture glance, quant in level II is only 5% and the time you sill spend on it is not nearly commensurate with the contribution to your overall score on the day of the exam.
Don’t know about L3 but Algebra 2 should be good enough for L1 and L2…
Knowledge of calculus might make it easier to interpret some concepts like duration, convexity, option greeks, etc.
+100