I need more material! cause I’m running out of mocks and things to do!!
I ordered Mark/Bill’s mocks… and I also got his Book 4 video to test him out.
I do like Mark’s voice, very soothing… I’ve concluded that it doesnt matter that he doesnt have a CFA… it doesnt even matter if he’s a high school dropout… his voice is very good!
If you want to challenge yourself buy the following mock books:
BPP (UK based CFA school) They have 3. They are very challenging but good practice
Finquiz (6 mocks available) - very difficult but again good practice
I’m with CEO on this one although my views are not as vehemently strong as his (as I still did use Mark Meldrum’s videos from time to time)
I find it incredibly bizarre that a man that knows each level curriculum inside out wouldn’t just take each exam and get the charter. The dues payable are nothing compared to what he’s earning from his candidates. I also find it extremely ironic that he gives exam day advice and ways to keep clear head and reduce stress when he’s never sat the exam.
And to Magician’s comments regarding Olinto not doing it either, I also found that strange when I learnt it.
I don’t correlate the knowledge of the professor to passing the exams, I know Olinto and Mark are awesome instructors - I just find it really weird they don’t do the exams.
MM being a charter holder or not - if you pass the exam it wouldn’t matter and if you fail it wouldn’t matter. Let’s stick to what matters.
I worry, as I feel they are going to be a real harsh 
.
Just not to be unfair with Mark Meldrum as per my last comment, finally I could purchase the mocks solely.
Can’t wait to open them…
Just remember not to do so until you’re instructed to.
I just took the MM Exam1 PM… After finishing it, I thought wow that was easy. I think I scored at least 90%. But after doing the results, scored the lowest of all the mocks I’ve taken by far… My feedback:
1.) Minor details in a single word that I missed in the story cause me to miss many question. To me, this is more of a “I got tricked” and typically isn’t part of the real exam
2.) The explanation in the answer guides were very good, above and beyond any mocks I’ve taken
3.) Great material for learning… Will do the Exam1 AM tomorrow.
4.) You got a lot of strange names in the stories… Amrabat? Al Jassam? lol
5.) Three potential errors I saw:
Tell that to the FIFA World Cup participants.
In response to CEO10K-DAY
I guess I should address this:
Mark Meldrum here. Let me first point out that the only true CFA body of knowledge is the Code and Standards and GIPS. All the rest is borrowed from the field of finance. All of it. There is nothing in any CFAI reading that has not been borrowed quite heavily from any widely available finance textbook. In fact, the treatment of the topics in the CFAI readings is quite light compared to a more rigorous course, which is the standard at a Master’s level, at least at a school that matters. So while a CFA charter may be enough for a Prep Provider, it would not be enough at a University Level. If you strip away everything from the CFAI books that can be found in more rigorous textbooks, all that would be left is Ethics and GIPS.
Point 2: This relates to a point you make further down this thread about putting in the time. All three levels of CFA would require about 1000 hours of study. That is 6 months of full time work at 8 hours a day. A PhD requires 4 to 5 years of much more than 8 hours a day. Want to test your willingness to put in the time - write a dissertation. There is no such thing as a 70% passing score there, not even close. Or, show up at my office at 6:30 am (don’t be late) and count how many hours a day I put in on CFA content. I would love nothing more than to have the time NOT to put in each day.
Point 3: There is nothing in the CFA program that prepares you to teach. Nothing that touches on epistemology or pedagogy. Nothing that discusses the science of assessment. Nothing that prepares you to write assessments. There is no CFA way to learn, no CFA way to teach. Learning has been the same for 5,000 years, no matter what you are learning. And teaching is not about telling people what you know, it is about telling people HOW to know what you know. I have had full charter holders attempt to write content for my site with very little success. Very few can do it, and those that can typically come from academia. That is important since you need someone that understands the process of learning, can anticipate where the challenges are, knows how to convey sometimes difficult concepts in a more accessible way. I have seen a lot a CFA instructors, full charter holders, reading their words off a PowerPoint and calling that teaching. Its not!
I will put myself up against any charter holder, in the classroom and on the street. For some of them, I’ll even give them a head start.
Think of a charter holder as brandy and a PhD as cognac. All cognac is brandy, but not all brandy is cognac. Be careful abut how much pride you place in what’s in your bottle.
Just did the Exam #1 AM. I actually quite enjoyed it.
However, a few things I noticed – and I may be wrong or right, not sure:
Question #7 part D: I could not locate the reference to client #6. Scanned over and over, no where is client #6 mentioned
Question #5, part D, solutions: The solution refers to the swap duration of 4 years (fixed) minus .25 (float). However, the question stated the fixed side was 1.5 and the float side was .25.
Question #1, part C, solution calculates the before-tax return to cover shortfall, adds the inflation factors, and then divides by the capital. There’s a lot of inconsistency on how to calculate the Required Return. Every mock does it a different way and it drives me nutz.
However, MM’s formula sheet that is included in the mock is consistent with the Kaplan… which appear to calculate the numbers different and comes up with a different Required Return:
"Kaplan: For the Exam: The treatment of inflation and taxes in the current reading assignments and past exam questions is not consistent and has caused considerable confusion.
To illustrate, consider a client in a 30% tax bracket with $1,000,000, needing a $30,000 after-tax distribution at the end of the year with that amount growing at an estimated 2% inflation rate in perpetuity.
Current CFA Readings Approach:
Issues with Old Exam Questions: Some very old exam questions first gross up the real, after-tax return of 3% for taxes and calculates the real, pretax return: 3.00% / (1 − 0.30) = 4.29%. Inflation is then added for a nominal, pretax return of: 4.29% + 2.00% = 6.29%. This approach is not particularly logical because it implicitly assumes that any return due to inflation is never taxed. In other words, the 4.29% is fully taxed each year but the 2.0% is never taxed. If you did this on your personal tax return, it would, at best, be disallowed and, at worst, you could go to jail. You cannot exclude the effects of inflation from taxable income.__"
Not that Mark needs it, but I do agree with this perspective. I’ve done both a PhD and got a charter (and I’ve worked in finance for over 5 years now), and I don’t really think there’s anything in the CFA program that you cannot learn through other sources. Therefore, I don’t think you need to be a Charterholder to really know how to collect the material and produce something reasonably helpful to candidates who can’t just pick it up themselves. I’d even add that this is a skill any PhD recipient has to acquire in order to finish; picking up a book and learning on your own is crucial.
So I have no doubt that these materials are thoughtfully constructed. And really, when it comes to mocks, other companies have Level 3 mocks that are straight up hot garbage. So I’m glad to see that Mark is giving consideration to quality of output.
One point I would disagree on, actually, is that I think the CFA materials does a better job of presenting ideas (somewhat) consistent with how things are done in practice than a lot of academic books I’ve read. You would not believe how many arguments I’ve had with academics over how duration is used, for example. That said, it’s clear that CFA borrows from books written by folks who have had some industry experience.
As an aside, Mark I’ve got academic experience, a CFA charter, and industry experience…in case you ever want a content writer. #shamelessplug
You can if that amount remains in an account for which only the withdrawals are taxed, which is the point.
They’re wrong about the issues with old exam questions. As always, you have to read the vignette to know what to do.
Take a look at the article I wrote on this topic, replete with references taken from the actual CFA Institute morning exams since 2004:
http://finexamhelp123.wpengine.com/inflation-in-required-rate-of-return-to-tax-or-not-to-tax/
Ahhhhhhhhhhhh… now that makes a lot more sense… Why doesn’t the CFAI text talk about these Subtilty?
So for your question “withdraws from the investment account are taxed at 20%”… So its a tax deferred account., so increase the return by taxes, then add inflation…
Now I feel like I got a gauranteed several points on the exam… (although I do see they havent asked the return question in the last few exams… maybe it was too confusing)
They asked one in 2017 I thought? Would have to check. Last year they disguised the question, but it was there.
It’s at the bottom of the article. One of those references with which the article is replete.
There are four possibilities for the return they ask you to calculate:
There are (at least) three ways that the returns can be taxed:
There is no default_ way to calculate the return. You have to read the vignette and it will tell you whether the calculation is real or nominal, before taxes or after taxes, and what portion of the returns are taxed. You calculate it the way the vignette tells you to calculate it, and the vignette always – always! – tells you.
For a before-tax nominal return in which only the withdrawals from the account are taxed, I chose to calculate the after-tax withdrawal needed, then the before-tax withdrawal needed, then the amount of return to cover inflation, and then sum the last two and divide that sum by the asset base. You could calculate the after-tax (withdrawn) return rate, then the before-tax (withdrawn) return rate, then added the inflation rate to that last one. You’ll get the same answer.
Well said!
Only thing I completely disagree is the comparison between Master’s and CFA. I have worked and I’m still working with bunch pf people who have gotten their Masters/MBAs from top-notch European schools and IVYs and their knowledge of finance can be surprisingly low…way lower than what would be required to pass CFA exams. One can just wonder what they teach at “big time” schools when you hear one of their alumni ask how an increase/decrease in discount rate affects asset valuation. Or straight bond valuation is too technical and complicated.
Ps. I’m not trying to sh!t on Masters…I also have the degree. However, just based on my own experiences, I’d bet that a randomly picked Charterholder knows more about basic finance than randomly picked alumni from reputable schooI.
There was definitely a disguised one on last year’s exam. I don’t want to say more for obvious reasons although I think folks that have a copy of the exam can see it. Although to be fair I believe in that question you didn’t need to produce a % return.
I just added the 2018 exam question quote to my article. The key phrase is:
. . . investment returns are . . . taxed at 25%.