Prereq Material for CAIA Level 1

So, it says we need to know this stuff but I am confused as to how it might be tested. If the breakdown of the exam is: Ethics: 15-20% Alpha and beta: 10-15% RE: 10-15% Hedge Funds: 20-25% Commodities: 10-15% PE: 10-15% Derivatives: 10-15% Where might prereq questions fit in?? Do they just sneak them in somewhere? Might they expect us to compare the variances of returns for a hedge fund?(chi square t) Is that how they would incorporate it?? Any help would be appreciated… gracias

I don’t remember any prereq-only questions for either level. The prereqs seem to be more the basic tools you need to get through the material rather than something testable. Of course, you *will* use those tools on the test but it will be to solve something from one of the many, many LOs.

Dude if I were you I’d skim the prerequisite stuff so you know what’s there in case you have trouble with any of the actual material, since as the poster above says it seems to be just background. I don’t think the substance of the prerequisite stuff is tested at all on the exam, or at least that was true last September. Focus on the actual material, though; don’t spend much time on the prerequisite stuff.

Agreed (and I’ve passed both exams) – if you can’t get through the pre-reqs, it will be tough to get through the quantitative material. It’s like way back in high school – to take trigonometry/precalc, the teacher assumes you know algebra and geometry. You’re never tested solely on those earlier subjects but if you don’t know them well enough, the actual material at hand won’t make much intuitive sense and you’ll simply be memorizing and taking everything on faith.

I just tried the PDR and scored a “poor” 50%. I have been in the alternative industry for 4 years now, and I have to admit some stuff I didn’t know on top of my head. Some others instead, they are not correctly counted in (kurtosis is not zero for a normal distribution? since when??). I am wondering the same thing: is it worth to pay and spend time on those books before starting with CAIA L1? Or it could be enough to start CAIA L1 and then just look into those notions that are not clear enough as soon as they come up? Is good to know everything, but time is limited and so is money :slight_smile:

You really dont need to do the prereq stuff to be honest. There is very little quantitative work on LI. The thing is though, if you dont understand a lot of the stuff from the prerq material you may not understand what’s covered in LI. If you are interested in learnign the material for the long haul, do the prereq. If you just want to pass the test, dont bother with it…