Hello, I’m new to this forum and I just wanted to introduce myself. I have graduated college a year ago witha dual bachelors, one in Mathematics the other in Economics. I took a year off to deal with a family emergency and to recoup. I’m now about to pursue a double masters in quantiative finance and mathematics. I’m doing so cause I really don’t know what I want to do, I could really pursue any one of my fields more academically or go into private industry. I have contemplated investment banking, as a friend of mine is Buisness claims that my studies will be “fit naturally” to that field. However, given some further inspection on the subject, I noticed that “Investment Banking” is a very broad “subject” indeed, and could mean almost one of any number of things. I’ve discovered this forum after much searching about the CFA on the net. I could not find anyone in recent few pages of posts that had my predicement, so I thought I would ask everyone if they could give me their opinion on the matter. Does the CFA make sense for me (I am indeed contemplating the possibility of going to investment banking after my masters -if I don’t chooes to pursue academia further)? Further, is there any subfield of “investment banking” that I should look at in particular that would fit more with my background? Also, how many questions are on the CFA exams? And can anyone compare it to any of the other entrance exams that one may have taken? GRE? GMAT? LSAT? GRE Subject Exams? Department Prelims/Entrance Exams? Thanks.
Unfortunately, the question needs to be asked: How is the quality of your undergrad? If you went to a top school and had good grades, you background should certainly get most banks to at least take a look. And it seems like you enjoy the quantitative aspect of things, and there are plenty of trading desks that are very quant intensive w/o needing a Ph.D.
My grades are fine, but “top school” is hard to qualify, if you mean US-News and World Report, my school was ranked in the top 50, but my mathematics department research output was ranked in the top 25 by the NRC. But then again, that is tertiary with respect to undergrad. My professors have stated, that at least when it comes to getting into a “top program” at least for PhD, what will matter is my research and LORs. Then after that, it’ll be by test scores and GPA. I’m going to mastesr to I can have more time to develop some research ideas. But then again, this is mathematics. For Economics, my professors told me “Just get a very high GRE score,” “maintain a 3.5 GPA,” and “take as many mathematics courses as possible,” unfortunatly my Econ GPA was 3.4, cause I did screw up my final year. Again, another reason why I’ve decided to pursue masters, to fix some of my errors in my final year of school. Are these investment banks pretty anal about “being in the ivies” etc. Cause I gaurntee if it they give me a exam or any other quantiative tests, i’ll crush it. I’ve browsed some of these investment bank texts (Sharpe and Bodie were the two I purchased for some self study) and the material seemed pretty trivial. I’ve also purchased some book on Amazon, entitled “Heard on the street,” and the questions on here were also pretty easy. The more advanced finance text I observed seemed to be relegated to Mathematical Economics and Mathematical Finance and required much more sophistication (Functional Analysis, Measure Theory etc.)… although alot of it seemed to be irrelvent for “practitioners.” Could someone also comment on the other facets of my intial questions thanks you!
Serge, I was in a similar predicament but I’m strictly an economics major. I too was going to become an academic until i realized my best efforts would problably amount to little more then trivial research and teaching in a small town. I too am interested in investment banking (corp finance to be exact). I’m in Toronto so the situation is problably a little different as well. I’m currently an IR (bottom of the bottom of the bottom doing customer service). I would stress that if you’re looking to get into ibanking, start your research on getting in as soon as possible. from what I understanding, they like to recruit on campus (analyst role at least). You seem very confident in your intellectual abilities and that is a sweet thing. But i have realized that intelligence is much too overrated. To get in I think has a lot about how well prepared you’re in finding the opportunity (being very smart and being able to understand esoteric theorems problably won’t give you a huge advantage). I have a feeling that when you find out what they do, you’ll say, “damm its easy and trivial”. But getting in is hard. don’t expect rocket science in the real world. much of what they do is procedural and not very cerebral unless you’re a top guy and not too many people come into finance as a top guy. Putting such heavy emphasis on how intelligent you’re and expecting your IQ to pay the bill itself is problably misguided as well. I’m saying this because you mentioned you read some books and they were “trivial”. i had the same feeling before but now i understand the game a bit more. the mental fighting that you have to do in mathematics (academic research) is problably going to be harder then anything out there in the real world. As to the CFA, given what you’ve just told us. You’ll pass it with your eyes closed.
Quantifying a top school is not difficult. If you told a girl where you went to school, would she say, “why don’t we go back to my place or to the back of your car and cut” or would she say, “oh…that’s nice. is that like a wharton or a harvard where very smart people go?” outside of academia, nobody really pays attention to the “quality” of your specific department.
"Quantifying a top school is not difficult. If you told a girl where you went to school, would she say, “why don’t we go back to my place or to the back of your car and cut” or would she say, “oh…that’s nice. is that like a wharton or a harvard where very smart people go?” Frank…where do you hang out?
Thanks FrankArabia!, Your statement on on “top school” is most humerous, yet a bit disoncerting. I would hope that the world is not really that way. But no, you are correct, I did not go to “elite” school. But I was pointing out there are many “nonelite” schools which have superior education, i.e. Univ. Illinois, Univ. Mich., UCLA, etc… Apropros to my education, my friend and I compared, and our mathematics curriculum (exam difficulty and even textbooks used in some cases) were extremely similiar (and he did attend an ivy league). Econ is much easier to compare and I’d say most of the top 50 have comparable economics education. Except I did peer into Princeton’s department and it seems that they started off with Game Theory first, right after the Principles curriculum. This is a very smart move, since basic games are used in almost all of hte upper division courses (and it would cut at some of the redundency you see in undergraduate textbooks nowadays). So it seemed to me that the notion that “prestige” => “superior education” is a bit of a fallacy perpetuated by unsophisticaed peoples. I am glad that there are others like me in this board and I hope that we (all?) will put our mutual experiences and knoweldge to profitable use. If you may, I’d like to ask other questions, but at a later time. Thank You!
I’m just here for the free sandwiches…
Wow! Double up on CFA and MBA, looks like dual is your thing. With your quan. ability, CFA should be pretty easy for you.
Hey WS and everyone, I’m not getting a MBA, I’m getting a MA in Mathematics and a MA Q. Finance. Also, I never underestimate an exam… ever. I don’t imagine quant skills can conquer the CFA alone. There seems to be alot of knoweldge associated with the curriculum that will take a bit of time to consume and digest. Have any of you taken any of hte other entrance exams ? GRE, GMAT, Subject Exams, LSAT etc., many of these exams are also 3 - 4 hours long and I wnated a comparison if such is possible for those who have taken both the CFA (any level) and any other entrance exam. Also, how many questions are there in the level I CFA exams? Also, what is the desirable (elite score) percentile rank for the CFA? Or does it really matter? Is 90% and 95% good? Are the exams adaptive? And finally, can anyone supply actual job titles (other then neboulous “investment banking”) that I could search and look up to get a feel for what people in this industry do and how they go about doing it? Next to last: I understand that to recieve a CFA designation you must have 4 years of expereinece, however, in my current regimen, I’ll be taking/studying for the exams while in my masters programs, and probably could only have AT MOST some internship. So will the exams be useful at all (presuming I go into private or try too after my masters?)? To FrankArabia: In your opinion is the Economics degree useful for this field? What strengths do you percieve the Economics degree afford us? What weaknesses? Thanks. everybody.
Is your name really Serge? Do people purposely extend the e and talk in their ultra flamboyant voice when they say your name? That must be annoying
Hi Randall, No Serge is not really my first name, that is the name of my favorite mathematician. And it’s prounounced like “Surge” not “Sayr-gay” or however the stereotypical slavic/Eastern European acccent makes it sound. Also he’s French. So are you also a CFA applicant? Could you give any of your experiences on your studying and your pursuit of this degree? DO you know how many questions are in each exam? etc.
Serge, i have only 1 year of working experience so I think my opinion is premature and inaccurate at this time. However, I will say that a lot of successful people have economic degrees, most notably Warren Buffet. I’m glad you asked the question because I think about it too. First, i think economic degrees SUCK in terms of getting a job in finance. When i mean suck, its inferior in terms of getting entry level positions. The best is problably accounting, finance/business, then economics. if you check out most Ibanking jobs, they want something in that order. business/finance degrees grooms them to be better candidates. Usually, jobs that economist can get, someone with a math or eng. degree can get. However, I’m not regretting my choice with economics at all. I’m actually very happy with it. First, economics is a selfish science in more ways then one. economic knowledge is very useless at the bottom level but extremely valuable in higher levels due to the more broader level of thinking we’ve been trained to do. Secondly, when you’re reading the newspaper and trying to think through what is going to occur, almost always you’ll have to use economic logic whether you know it or not. it’ll pay dividends in the long run. BET. When I’m thinking about investments and even studying for the CFA, i can see glimpses of economic logic piercing out of the panties at every page. If you truly understand economics, you will have NO trouble understanding concepts in finance since they’re really subsets and footnotes to the general train of economic thought. Being good at economics/mathematics is being good at logic but the skills don’t come into play very often. being good at finance or accounting is good for practical purposes but it is harder to obtain that overall understanding of what motivates the world. a fighter with a bad coach will almost always lose no matter how fast his hands are or how strong he is. He might be able to generate wins in the short run, but behind every great fighter lies a great coach. To succeed, one needs both. I strongly encourage you to get your masters. Then, do your CFA and MBA. 1000 on Mayweather.
Hey gain FrankArabia!, Thanks again for your opinions. It dosn’t matter if you only have on year of experience, that is one more year then I. As it is now, I have no idea on what investment bankers actually do, nor have I ever had experience in this industry, so perhaps tyro and fledgling is a word that is TOO strong for me…, I’m glad there is no such thing as negative experience :-). In any event, did you take an Econometrics sequence? What do you suppose is the most important/useful class in your Economics curriculum? Also, is there any industry in your opinion where Economics is a definite advantage (comparatively)?
SergeLang, In my opinion, investment banker are high level, visible salesperson. However, they sell the whole firm, and their firm’s capabilites. They call up on companies to advise them ways to increase value in the market place, (selling off a business unit, buying out a competitor). To get paid, the investment bankers would advised the business to get financing arragment from its own firm (debt, equity or other types of financing options), therefore generating revenue for the firm. Hope this helps!!
To answer your questions: Level I has 240 stand-alone multiple choice questions. 120 for the morning session, 120 for the afternoon session. Each session is 3 hour. The test is graded on a curve, which CFAI will never publicly disclose the passing grade, you will only receive pass or fail, not the acutal grade. Level II has total 120 questions. 10 item set questions in the morning and 10 item set questions in the afternoon. Each item set has 6 multiple choice questions. 3 hour each session. Same grading policy. Level III, well, I am preparing that for now, know that morning seesion involves short answer (essay). Afternoon involves item set questions.
Hey Ws! Thanks for the info. So it dosn’t matter if you rank in the top quartile or top fifth percentile? It’s simply pass/fail? Do they eventually let you know what you got anyways (percentage wise?) That’s sort of odd, wouldn’t that mean that CFA could mean anything from “barely understands” to “Supremely competent?”
CFAI will break down the topic on the exam (I don’t exactly remember all the topics, how sad!!). Each topics are assigned a scoring ranging <50%, 50%-70%, 70%
Hey, That’s intense. The GRE is only 3 - 4 hours and not all of the sections even matter (there is 1 experimental section, but its not identified and so you have to take all sections seriosully). Further, half of the GRE is more of a “basic skills” (quant) and the verbal is really only hinges on 1. Reading comprehension 2. command of large “graduate level” vocabulary, the rest of the verbal section is pretty easy (analogies and antonyms) assuming you command the first two. I still have 1 more exam to take (next year) for my mathematics and I’m planning on taking the GMAT middle next year (suppodly I have heard if you do stellar on the GRE, you will do stellar on GMAT with some little practice). I figure I might as well get the GMAT out of the way, even if I don’t decide on MBA (or don’t do it at all ), the scores will be good for 5 years. How is the strategy for the CFA? On the GRE, it’s much about speed and accuracy. You have to be able to do mental arithmetic very fast to get perfect or close to perfect in the math section. However, the math is very simple, and mental arithmetic is not a problem with me. I have heard the CFA affords one a calculator. On the GRE the expected speed is about 1 1/2 min per question. Do you guys determine any optimal speed in your practice? Is the weight per question equivelent? Or are there certain questions (perhaps placed earlier or later on the exam) that are more point-heavy? Thanks Again! Also, just curious, whence you recieve your CFA, where do you expect to work (if this is not a privvate question)? Oh also, what are the top 10 - 15 “companies” in this industry? Is there a list I can access online?
Go on www.cfainstitute.org. They will give you a list of topic weight for each year’s exam. Yes, time is a major factor on the exam. I would suggest you to watch some CNBC (guys, don’t knock me on this) to get to know some names in the industry. People with CFA charter works in all kind of field. Financial and non-financial. One of my buddy who has a CFA charter works as a budget director for an power company.