I skipped Derivatives for L1.. What should I do now?

CFA Level II
#1

Hello every one…

This is my first post … I registered in this forum because of the support I felt since we all understand what each of us is going through …

So I passed L1 in December, Im planning to take L2 this June. However I am worried about the level of difficulty of Derivatives… I skipped it for L1 due to lack of time… but planning on covering all topics for L2…

Will I be able to understand Derivatives from L2 material now that I skipped the basics? Do I have to review L1 material first (I do not think I have enough time)?

Any advice would be highly appreciated…

Thank you,

#2

Yes. I do believe they cover all the sections from Level 1 Derivatives before introducing Level 2 concepts. Those segments are optional but it might be worth reviewing before you move onto Level 2 derivatives stuff.

#3

yes, they do repeat a lot of stuff, I wouldn’t worry

#4

Thank you both… I’m a little relieved now =)

#5

dont get too comfortable, deriv is extremely complex at Level 2

#6

How far into Derivatives are you, Providence? And have you read all of the CFAI books?

#7

Derivatives is a very challenging topic for a lot of L2 candidates. It certainly was for me. You don’t need to review L1, as the curriculum does a good job of brining you up to speed for the concepts in L2.

I dedicated a lot of time to derivatives in L2. Did a ton of questions to make sure I got the concepts down pat. I didn’t “master” the material, but felt confident enough with deriv. going into the exam. But during the exam, I left the deriv section last, and ended up running a bit tight on time, with only enough time to crunch out 1/6 questions. Ended up guessing most of the set. Luckily i passed.

Don’t take my exp. as “I can skip deriv and still pass”. But think about it in terms of “there’s no giveaways in L2, and even if you’re not 100% comfortable with deriv, you should know it well enough to at least pick up a few points.” The exam experience is full of surprises.

#8

Ive done all of CFAI Derivatives and im halfway thru elan deriviatives now…

It’s intense… once you get the process down for binomial pricing it gets easier though…

futures/forwards seem daunting at first, but its very similar stuff once you understand the big picture

#9

Thanx guys for the heads up … It’ll help a lot in formulating my studying plan …

#10

might I add…

DERIVATIVES ARE HELL

#11

In fact, derivatives aren’t as difficult as many candidates believe. The primary problem, in my opinion, is that they are rarely explained fully, leaving most candidates with a ton of formulae to memorize, rather than giving them a solid understanding.

I’ve started writing a series of articles on derivatives, here: http://financialexamhelp123.com/level-ii-derivatives/. They might prove helpful.

I’m planning to write more; let me know if there are particular topics you’d like me to cover.

#12

S2000 - had my first class last night, and first night of studying tonight… Starting with Econimics for Valuation… glad to see you are still here!

THANKS!

#13

I agree. They’re far worse.

#14

wink

#15

And you as well.

You’re welcome.

#16

Greenman: I’ve posted articles on pricing and valuing forwards and futures, currency forwards, FRAs, and plain vanilla interest rate swaps:

If you wouldn’t mind, I’d love it if you would take a quick glance and give me your opinion on the helpfulness of the articles. (However, if you couldn’t care less, I understand completely.)

I’ll get to the other swaps (currency swaps, equity swaps) and options as soon as I can.

Thanks!

#17

YI’d love to, but not right now. Why don’t you remind me on April 16th?

And yes, I am serious. I’d be glad to help out after tax season.

#18

I knew you were serious.

I’ll put it on my calendar.

Save those taxpayers a bundle!

#19

Hahahaha. +1

#20

I’m half way through Derivatives…

I wouldn’t call them hell, they’e the HELL of HELLS !!