QUANTS,PM,AI,ECO

Helo Everyone

I have almost covered Equity,FRA,Ethics,FI,Deriv,Corp F but I am still have to do with the rest four, Can u please advise what are the Testable areas in the rest 4 so that I will be focussing on the same in the next 2 to 3 days.

Thanks in advance.

Can anyone advise on this…

Try doing PM first then Quants then Eco and finally AI.

Thank you Salam

Quant- assumptions/issues with multiple regression (error term issues/heteroskedasticity, etc), ANOVA formulas, model misspecification, autoregressive models in time series (stationarity, mean reversion, unit root, seasonality, ARCH)

Econ- forex. Triangular arb, parity relations, fwd/carry trade, taylor rule, cobb-Douglas, growth theories (classical/neoclassical/endogenous), and then reading 14 is 7 pages in schweser, it deals w regulation, if it comes up it will likely be 1 question but so short it’s prob worth skimming

Alts- [first a general comment abt how im handling alts. As a likely 5% topic IMO, I’m trying to understand concepts on a high level and I’m memorizing formulas. There’s a lot here but i think the exam questions wont be too bad and if they are, few ppl will score well anyway. Youll practice through mocks that contain Alts vignettes.] Reading 38 (Private Real Estate Investments) seems very testable. Valuation approaches (cost/sales comparison/income - income being the most important), debt service coverage and loan to value ratios. R39 (Publicly Traded Real Estste Securities) REITs REOCs RMBS CMBS - know basics, ie which are equity vs debt and some advantages/disadvantages of investing in RE through publicly traded securities. NAVPS/REIT Valuation and the diffrrent approaches (P/FFO, P/AFFO, DCF). R40 (PE Valuation)- Valuation issues for and differences btwn venture capital and buyout investments, costs of PE investing, PE performance metrics (IRR recommended, but know multiples too e.g. PIC, DPI, RVPI, TVPI), Pre and post money valuation in single financing round for VC. R41 (Commodity Investing) is. Theory of storage/convenience yield/backwardation vs contango, roll return etc.

PM- very conceptual and lots of key formulae to know. R53 (portfolio concepts)- big one. Variance for 3 assets, efficient frontier, variance for equally weighted portfolio, CML, CAL, SML, systematic vs unsystematic risk, beta/adjusted beta, multifactor models (macroeconomic, microeconomic/fundamental), arbitrage pricing model, active risk/return, factor/tracking portfolios. R54 (residual risk and return-information ratio) is a lot of easy formulae. Memorize them. Alpha, IR, value added, optimal level of residual risk. R55 (fundamental law of active management) more formulae. IC, BR, market timer. R56 (PM process and the IPS) I think is covered in depth at L3 but its very important to CFAI and ties in with Ethics so maybe their way of adding ethics to the L2 exam (ethics bumped from 10% to 10-15% this year) is to have 2 ethics vignettes and 2 PM vignettes, one of which focuses on IPS. Investment objectives (risk/return) important here, along w investment constraints. Lots of this material comes secojd nature to me, so just skim it and focus on formulae in PM.

Try to finish PM and AI first, more of concepts in case of PM and AI more of formulas. AI should easily get you more than 75%. Quants, if you have not read at all, I must say its difficult to digest them in just couple of days. Rather than wasting time on them, just focus on your strength and easy once (AI). I know someone who left Quants entirely, guessed on exam, and passed. Eco - focus on Forex and Potential GDP factors and formulas in that LOS…

Thank you Chintan…

Id do all of PM (quickly!!!) and write off the other three. Im expecting each to be a single vignette and those three are just too long to be worth it (theyre the worst 3 sections in terms of questions per content by the weights im assuming). Additionally, they arent topics that are easy to cram or grab a few easy points.

Memorize how to solve the types of problems that show up on the related sections on the CFAI mocks and practice problems and hope for the best. You have 6 days, you need to be reviewing content youve already seen.

Thanks hock

I would not write off these sections completely. Based on min scores they total 20%. You’ll have a hard time passing without picking up a few points on these sections, unless you’re very strong in the other sections. Hock is right though that some of the easier sections can be picked up quickly. Personally, I think Quant is challenging. I’m praying for a minimum allocation come Saturday.

Writing off any reading, let alone entire topic area, is a disaster waiting to happen at L2. You could literally have 6 questions on an exam with only 120 on a topic you haven’t seen at all? No thanks. Get the basics, even if it’s skimming third party notes. I haven’t sat for L2 but I imagine it’s not 120 impossible questions, there will be some lower-hanging fruit that a large proportion of candidates will get, you can’t miss those