Thought I’d write a follow up guide on passing LII following some demand after writing a LI summary; https://www.analystforum.com/forums/caia-forum/91368012
Updated background - So since i wrote the LI summary, I’ve passed CAIA LII having written it in September 2019, 1 year after passing LI (passing both comfortably on my first attempt). I’ve also passed CFA LII in June 2019 and am now working in investment research. Similar to LI, i started studying around mid-July giving me two months to prep for CAIA LII studying around 80 - 100 hours.
I won’t rehash what i’ve written before as much of LI strategy also applies to LII (regarding depth and multiple choice question strategy), so take a read of my previous post if you’d like - i’m only going to focus on the written component.
LII Format Strategy;
70% Multiple choice
30% Written (10% ethics, 10% CIT & 10% something else)
The multiple choice strategy is the same as before - just learn the content and practice via a Qbank (i used Uppermark). In terms of the written component, i personally found it quite daunting initially but fortunately, greatly overestimated the level of difficulty. This was largely due to the description and lack of context provided by CAIA Association about how the written component will be tested. So it’s described as an ‘essay format’ which implies you need to both memorise a significant amount of information and write a considerable amount, however this is completely false. The extended response questions in the real exam mirror the mock exam, such that they can be sufficiently answered between 1 - 4 sentences (in contrast to CFA LIII which requires paragraphs of writing). There is absolutely no time crunch whatsoever, so there’s no need to stress about it.
#1 You do NOT need to memorise the Code of Ethics and Professional Standards of Professional Conduct - you need to understand them and know how to apply them but DO NOT need to commit to memory that Standard I) A) refers to Knowledge of Law etc. If there’s anything relating to specific standards, the questions themselves will provide this information for you. I didn’t know this until a week before the exam until i did the official mock and they just provide you with all the standards willy nilly - i wasted many hours committing all of the standards to memory when it was wholly uneccesary.
#2 Interpretation of Ethics;
Ethics is intentionally created as to not be black and white. This inherently sounds ridiculous for a test but it’s analogous to the principles of law. Killing someone isn’t automatically considered to be murder just as much as receiving a gift isn’t tantamount to an ethics violation. Context is king
Regarding interpretation - think of the situation as an external informed impartial observer, look at a situation and think about whether or not you would most likely see it a situation as an ethics violation or not. It doesn’t have to be a straight out ethics violation to be considered as one, it just needs to be likely. e.g accepting an agreement to beat the S&P500 by 500 points results in an around the world trip - this is most likely an ethics violation as this specific portfolio will likely receive greater attention relative to others (it may not of course, but the perception that it will is there - hence violation). The natural follow-up question is how does one develop the right interpretation method? Candidates/students are unusually harsh when applying ethical based judgements - so just take your current stance and scale it back, need to remember it’s (theoretically) someones life and ruining it over a bottle of wine is ridiculous.
#3 Final note on Ethics - If you had to allocate resources for guaranteed marks then i would suggest Ethics is an easy place to pick them up - just practice writing responses using your preferred Qbank and try to hit stronger on this. The format of questions is very simple, is this a violation, why/why not? (that said, i’m unusually gifted at Ethics, so i’m cognisant that what i’m saying might just be nonsense).
This section is straight up free marks, you should spend a considerable amount of time here to guarantee you get these. The exam, like the mock only tests you on 1 of the 9 CIT texts (i also didn’t know this until the week before the exam) so make sure you know all of them very well. CIT’s don’t require interpretation like Ethics so it’s just a pure memory test - aim to get 100 on this. Write summaries paying attention to key %'s and do practice responses via Qbank.
10% something else;
Punt it - don’t commit any mental resources to this at all and assume you’ll get 0 for it. It’s 10% on one specific sub-topic across 6 larger topics… How the hell are you meant to prep for this??? You can’t, so don’t.
Best of luck everyone