Is it ok to skip derivatives?

Leaving out forwards, futures and options, do you think its ok to skip swaps and those 2 sub readings? Swaps very tough. With that amount of time saved I can concentrate on other topics better? What you think?

And I dont think credit or interest rate derivatives can come on the exam because if you look at the EOC, they barely have testable stuff.

Absolutely nothing wrong with skipping swaps, or derivatives altogether for that matter.

Unless, of course, you want to pass the Level II exam.

If I were in your shoes, I’d prefer passing, so I’d make sure that I understand all of the derivatives material. It could be 15% of the exam.

In my opinion, Derivatives is low hanging fruit. If you get how to apply the formulas, you got the points in the bag. This is unlike Econ, FRA, Corp Finance, etc where they could throw some fluff knowledge question (that came from 1 line in the CFAI text) at you that you can’t answer.

Derivatives is the only section where I’m aiming for 100%. The other sections I’ll be happy with 70%+.

I’m considering skipping the whole of Equity reading myself.

I’m skipping ethics. I know the difference between right and wrong so it should be obvious.

Will probably also skip the finance parts too. I deal with money every day.

I hate to admit that it looks like this is going to be my strategy for Ethics.

For those planning to skip Swaps, Just give 10-15 minutes time reading what CPK had written about swaps. Believe me its easy, dont try to “by heart” that big ***** formula. Understand it, draw a diagram and its a pie. Dont miss it…

CPK has explained the whole stuff beautifully here in the below link -


Those that passed the exam last year smashed 3 sections; equity, corp finance and derivs. You can see that from the 300hrs review of the L2 exam. I would suggest being able to smash these sections, along with FRA and Ethics which altogether are likley to make up 70% of the exam.

Then you’re in for a good chance.

I would seriously spend some time working with derivatives. I found the section quite challenging too, but the SWAP section was not too bad. Watch the video (1.5hr)…take some notes…knock out 150 questions on Qbank. That should take you about 5hrs. You’'ll be good at SWAPS after that. I think SWAPS is very testable!


I hope you’re trolling

Yea dawg, the whole of derivatives is childs play - I’m thinking that FRA can also be put on the backburner next to Equity. According to a statistic I just made up, Derivatives has only shown up on 5% of all the past L2 exams. True story, brah…

According to Pierre on this blog, you could potentially skip 65% of the readings and you should be fine. Stop wasting our time man.

I agree with cleverCFA. Derivitives and PM offer great ROI that way because there is lots of plug and chug. I think id spend the time and know that you are counting on 90% from these two on test day.

I do also belive in non prioritizing sections but I think quant and econ are way better candidates for volume,complexity vs marks available. Econ especially for me.

I don’t agree with skipping ethics, but do plan on not focusing on it until late.

Your plug and chug assumption is pretty naive :). I’m expecting mind-benders on the exam - hedging short CDS positions, deciphering CDS premiums, calculating arbitrage profits on currency forwards, etc.

Pierre…youre the man.

Please move forward with this strategy. In fact, I hope many level 2 candidates will adopt this same strategy.

I think it will all be mangeable though.

Why does this guy have so much time to troll. More importantly, how do others find the time to respond? This board needs user ratings desperately.

It’s okay to skip derivatives. I doubt they will show up.