Perscpective on difficulty and pass levels- feedback?

I wrote level 2 last week which I found to be a tough test.By way of background I have a BSc and an MBA in finance. I also have a decade long experience in structured finance & wealth management area with a large global bank. I also teach finance at the Bachelors and Masters level( part time) .

Going by past papers/ forums & industry feedback it appears the CAIA difficulty level has gone up tremendously. CAIA should only be attempted by folks with a good grasp of quantitative methods and a business finance background.

Regarding the pass level being in the 60’s I would like to point out that most of the candidates appear to be experienced hedge fund , equity/debt market folks who already have a deep knowledge of quantitative methods and or have commodity market experience. CAIA does not seem to attract new finance graduates like CFA does. Due to the element of specialisation that CAIA promises- I think the designation is relevant to people already in or entering the world of alternates.

Gosh, CAIA must be harder than CFA. Thanks for your clearly unbiased, well thought out input!

I disagree about calling CAIA very quantitative.

When I sat for Level 2 there were just few calculations, all quite simple. It was mostly conceptul and about memorizing classifications and numbers from various studies.

Level 1 was heavier on calcs and statistics, but nothing I’d call particularly challenging.

IsThereAny, I don’t think the OP compared the two on difficulty.

It does seem like the CAIA exams have become more difficult since I took them in 2009.

I think they have also improved the curriculum and hopefully the quality of exam questions.

From my experience taking CFA and CAIA, you really cant compare them. CFA is a catch all that provides a great foundation for anyone in finance, no matter the level, Whilst, CAIA is more suitable for someone with some experience in alternatives as it does not cover the basics.

I disagree…most people taking it are either inexperienced folk thinking this will help them break into the industry or marketers and IR people. True experienced hedge fund people haven’t even heard of this. I hope it’s getting more difficult and gains respect.

I suppose evryone has their reasons to go for these programs. At the end of the day, irrespective of which letters you intend to write next to your name, you will have forgotten most of the material in the next two months. I for one, have spent my ten-year career in equities and took this exam just to learn something new, which I certainly did. For me personally, it was purely an academic exercise and not a door-opener to something new as I do not see myself transitioning to real estate or commodites.


Well iIsThereAny is clearly not a douche, but you wouldnt expect to find any analysts that were douches anyway right?

The exam was tough, I probably didnt pass the firs time (this most recent go-around) but then again, I didnt put in the time necessary.

It’s funny how defensive CFAs get when you say there could be selction bias and a higher level of candidate that is taking CAIA. Really, half of most MBA classes tried to take CFA level1 before their first year, most have never even heard of CAIA.

I am not saying which one is harder than the other because I haven’t taken both but I would be willing the bet a significant amount of money that the average CAIA candidate has signfiicantly better credentials than the average CFA candidate and that has something to do with the pass rates.

I really enjoyed the CAIA ciriculum but did find the exam and studying to be one of the least productive exercises immaginable. Let me memorize some terminology and formulas using flash-cards that I will never need to know ever again. Oh well, guess the purpose is to see who really wants it and who watches 30 hours of Kaplan video while playing Candy Crush.

^ Haha I’m kidding bro chill out. We all know CAIA has a much more sophisticated candidate pool and blows L2/L3 CFA exams out of the water in terms of difficulty. I just don’t know how anyone passes such impossible exams!

@skywalk47, yes it is a tiring exercise and as I mentioned in my previous post, you take little away from any of these exams. If most of what you practice is destined to be forgotten in the next couple of months, what good are these programs? The proof lies in the form of all those who have many letters next to their names but are oblivious to the very basics.

For me, CAIA was a good introduction to AI but the structure needs to be changed drastically. All this focus on performance data and legal jargon is utterly futile.

CFA is harder. Why are you comparing candidates? You should be comparing passers. Both exams have stellar candidates as well as your loser frat boys, indian IT support, and straight slackers who are trying to break into finance yielding an average candidate at the mediocre level. The ones who pass CFA though have on average better credentials than those who pass CAIA. That should be your indicator. Sorry b, but the pass rates have to do with the difficulty level, not what you said. I’ve taken both. You would lose your significant amount of money on the bet you mentioned.

Ramos, would I be right in guessing you took the CFA exams and then the CAIA exams?

I wonder how the perception of difficulty is influenced by the order one attempts the charters. Given the overlap in curriculum and similarity in structure, the second charter would seem to be easier for anyone that had already received the first charter. That is, I would think the CFA exams would seem less difficult if someone had already completed the CAIA exams and vice versa.

Has anyone completed the CAIA exams and then the CFA exams? If so, what was your perception of the difficulty?

I did them concurrently.

June 2012: CFA L1 September 2012: CAIA L1 March 2013: CAIA L2 June 2013: CFA L2 June 2014: CFA L3 So I took CAIA L1 and L2 after CFA L1 and thought CFA L1 was harder. Then I took CFA L2 and CFA L3 after both CAIA exams and found those to be harder as well. I’m not saying CAIA is a bad exam…I love the CAIA, I’ve even graded exams before. I just think right now it’s too easy on the material…it needs to be more than just memorization of articles and benchmarks. I would like to see things like calculating equity value through a difficult waterfall of preferred equity and sub-debt. Also, calculating a net return through a waterfall of multi-tiered carried interest using different catch-ups. That’s useful and testable.

CAIA only tests alternatives right? If so, the only overlap is that section (a very small piece of the CFA curriculum).

The Ethics and Level I Quant material would also overlap. Not sure what else, but likely some overlap with portfolio management, equities, fixed income, and derivatives.

Passing all 5 exams in a 2-year period – that’s quite impressive. With regard to the exam difficulty, that’s very useful information as I’m currently contemplating taking the CFA exams. Thanks for sharing.

If it is called the CA(lternative)IA then why does it have all of those topics? I thought it was at least specialized… Sounds like a watered down CFA to me.

Ramos, props for doing CAIA Level II while studying for CFA Level II. That is really impressive.

I did:

CFA Level I Dec. 2012

CFA Level II June 2013

CAIA Level I Sept. 2013

CFA Level III June 2014

CAIA Level II March 2015

Agree that CFA is much more difficult. Does help doing the two somewhat concurrently, as there is some degree of overlap. But I studied probably 200 hours combined for CAIA, while I did maybe 200, 400, 400 for each of the respective CFA Levels. CAIA is a breeze relative to CFA.