Is it necessary to memorize all the formulae? We’ll have 1000s of formulae in the course and how do we keep track or remember all of them… Share your tips, thoughts, trouble, etc…

Memorize = bad Know the concepts (why the formulas are the way they are) Its not too late but you got some work to do if you’re trying to memorize stuff at this point.

(Insert chiding language here for failing to check the CFAI website FAQ. You earn a Stephen Colbert “wag of the finger”) http://cfainstitute.org/cfaprog/faq/faqs_candidates.html##70 “I have begun studying for the Level I exam and discovered that there are many formulas presented. Are candidates expected to memorize all these formulas? Candidates are expected to be able to perform the actions specified in the learning outcome statements (LOS). If a formula is required, then it should be committed to memory.”

ok guys… thanx…

Niblita75 Wrote: ------------------------------------------------------- > Memorize = bad > Know the concepts (why the formulas are the way > they are) - NO MATTER HOW YOU LOOK AT IT , MEMORIZING 1000 CONCEPTS (WHY FORMULAS ARE THE WAY THEY ARE) IS EVEN HARDER THAN MEMORIZING THE FORMULAS THEMSELVES. THATS WHAT MAKES CFA VERY INTERESTING AND CGALLENGING! > > Its not too late but you got some work to do if > you’re trying to memorize stuff at this point.

I respectively disagree.

Niblita’s right, you can’t memorize all that shit. You need to know the mechanics and logic behind them. Or have a photographic memory like yours truly. That helps too.

As long as we don’t have to memorize the kurtosis formula, I’m happy. (we don’t do we?)

Just know that a normal distribution has a kurtosis of 3 and anything greater than that is excess kurtosis. X-3=1 would mean such and such distribution has excess kurtosis.

If you had any guts you would simply wing it.

Don’t memorize for the sake of it. But some theories just simply have to be memorized, e.g. bond adjustments and the like. Having written in June and just failing, I can tell you that come exam day, knowing some formulas hard after using them extensively can provide that extra boost that leads to a pass!

Well, if you’re using a BA II Plus, the TVM formulas are a non-factor. Even a lot of the statistical formulas can be computed using your calculator. The key is to understand WHY the formulas are how they are and note any patterns between one formula and the other. For instance, by taking the formula for variance, you can derive the formulas for standard deviation, skewness, kurtosis, and, resultantly, excess kurtosis. It helps to have a strong mathematical background in areas such as algebra and calculus as well.

I don’t know about this 1000’s of formulae thing. There’s probably a couple of dozen little things that you need to “memorize” like what the current ratio is and why is it different from the quick ratio. Even then if you just know the definitions, you don’t know anything that will help you much on the exam. They aren’t going to give you a bunch of numbers on the exam and ask you to calculate the excess kurtosis as this is a silly question. They may well ask something about the investment implications of holding securities with excess kurtosis. I think you could fit all the formulae you need to memorize comfortably on one sheet of paper. As gdiddy says, noting the similarity and the derivation of the formula gets you there. For instance, if you understand that current ratio is a measure of liquidity and then observe that the quick ratio is a fix because it’s not very clear how liquid inventories are (and usually you can’t pay your bills by sending them ski equipment or whatever you make). That ought to be all there is to it and you will never need to “memorize” that again. BTW - In all my statistics classes, I used to let people bring in a 3x5 card with whatever they wanted written on it. They could take the whole book and put it in microfiche and wear special glasses for all I cared. The students who did the best always had note cards with just a few things written on them while C students had very artful notecards. If someone brought in a 4x6 card, I got to make it into a 3x5 card. Very fun.