Should the CFA be taught with a strong emphasis on Excel?

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No. Because then you’ll have to take the test on a computer. And I doubt CFAI will ever go down that road.

If you can use your calculator, you can learn to do it in excel.

For Level 1, while I was working problem sets, I actually started doing some of them in Excel…It was a lot faster

I doubt that that’s a criterion that CFA Institute uses to establish how they format their exams.

They should move to a computer-based exam… and ask some questions requiring the use of Excel.

Just my opinion

it would seriously devalue the qualification if excel was included. if employers think that you need excel to calculate R squared from 4 data points then we’re all in trouble

go get an ms excel certification on your CV and tell us how you get on with the job search.

do your job without excel and tell me how THAT goes


I agree… I feel like there should be some questions that equire excel models and some without. For instance, the standard deviation examples where you have to do manual calculations to understand. But excel would be a great testing tool to test on Monte Carlo and integrating macros in sensitivity analysis for example. Just my two cents.

Worst idea ever!

I certainly see the utility in having the exams in excel but I would never want it to happen. The test series as I see it now is very heavy on the concepts and very light on the application. With excel involved that could change. Now this may not seem so bad if we are talking about calculating standard deviation. But if we are talking about simulation and portfolio optimization, or pricing of asset backed tranches then it could be a real buzzkill. Also if they did go down the excel road why not other programs that are a little more appropriate for different parts of the curriculum. We could tackle SAS coding for the quant tests (this way we could not just interoperate output but actually construct the regressions and tests). Also we could use C++ or Matlab or some other numerical processor for the portfolio mgt, risk mgt, derivatives, and option imbedded fixed income sections. Given that this would make our skill set a little more real world and practical it seems good on the surface, but the test could be just ridiculous – it’s bad enough now with just paper, pencil, and a hand held calculator – I don’t want CFAI getting any more latitude on these tests… At least until I clear them.

LOL. True, sorry for planting ideas, and I do want to pass so let’s stick to paper, pencil and calc. I’m just trying to imagine someone with no excel experience with a CFA. Would he be valuable as an analyst?

I think it should be, since many people without the quantitative practice would find it difficult to perform that kind of analysis in real life. Thats my opinion. I used to work in the risk managment-quantitative analysis area and its pretty important to have good skills at programming and visual basic to to the job, although that is not what CFA intention is.

The four year work experence requirement is suppose to cover these things, reading annual reports, bloomberg, infomation systems and other work related functions. Plus it also depends on your role as certain career paths focus on diffrent things.

There’s a big difference between being able to do your job and being able to pass the test.

CFAI puts in its curriculum “how to calculate standard deviation”. And (at least in theory), you’re required to be able to calculate it.

However, you will NOT see a list of 50 data points on the test, and a question saying “calculate the mean, median, mode, variance, and standard deviation of this data set.” CFAI knows that Excel can do that in .028 seconds, while it will take 30 minutes to do it on paper.

However, to understand how the calculation works, what it means, how to interpret it, how to use it, and its shortcomings–these are what you will find on the CFA exams.

So if you’re worried about having to calculate betas, covariances, mutiple regression lines, ANOVA tables etc., then don’t worry about it. Chances are extremely small that you’ll have to calculate these things on the exam.

+1 for Greenman’s comments…

Plus, to add to the above…

Why Excel? Why not Numbers? Or Minitab? Why don’t we also use some of Thomson Reuter’s accounting softward to build financial statements? Should we be proficient in Word and Powerpoint too? What about Adobe Acrobat? And why don’t we ask for a Bloomberg Terminal so we can research our own corporate governance statistics, and get real-time betas for portfolios?

My point is…once you start adding something beyond the most basic of “pencil, paper, and calculator”, you’re opening up a can of worms. And once you open the floodgates, you can’t tell the water where to go.

The CFA exam is not meant to teach you everything about your job. It’s meant to teach some financial concepts, and demonstrate that you have a basic knowledge of these concepts. If you want to learn to do your job, then learn by doing.

Good points greenman, altough the TI BA 2 Plus is an extremely arbitrary place to draw the line. Why allow us to shortcut TVM functions? Why allow us to shortcut multiplication and square roots, etc.

Personally, I would make the test incredibly complex and difficult, with full open book access to excel, google, books, whatever you need to bring to the exam to help you solve the questions. Just like you would in a real world work/investment situation.

The problem is that this is not real world, this is an exam – an exam that has nothing to do with the real world. I have a hard time believing that there are very many positions out in the real world that cover as wide a swath as the CBoK expects us to know – granted the real world expects a much deeper understanding of certain topics – but not the breadth.

The CFAI could insist on no calculators – but then you just spend 6 hours trying to compute the IRR of a cash flow stream – not really what the CFAI is shooting for as that would give us no time to talk about cash flow duration. They could also make it open book and really really hard as you state. This makes logical sense as it would ensure that only a very strong candidate could pass (ignoring curving). But again given the breadth of this exam you would have to be skilled in a lot of different areas:

Numerical processing/programming

Excel Modeling


Statistical programming

Financial Statement Construction


The CFAI, as I see it, doesn’t make this test to determine if we are employable in all these tested areas – if this were the case we would have to program regressions or price MBS tranches or forecast interest rates using the Black-Derman-Toy model, construct financial statements, etc. If you wanted a job as a quant you are going to get asked not to interoperate a statistical program’s output, but you are going to have to go to a white board and write sample code to answer questions that your interviewers are throwing at you. The CFAI could make the test really ‘real world’ and you would have to spend six hours combing through a company’s 10k to find a footnote that will alter your forecast for PP&E – again a real world issue.

No, I think the CFAI gives us the test that they do not to insure that we have employable skills – they assume we already have these in some area from the work experience requirement – they give us the test that they do not to test our real world application (again we get that at our jobs). But rather to insure that if we belong to their club we have some area of expertise (picked up on the job) and can talk at least intelligently about most all broad areas of finance. We may not be able to determine how to price a knock-in-put, but we can at least talk about the structure and assumptions someone would make in order to do it. We may not be able to determine if an SPV really is bankruptcy remote but we understand the ramifications to the collateral if it is. The CFA exam is not about doing – there is basically no doing on the test – it is about interoperating someone else’s work.

-i think at least

True, i agree with the concepts, but imagine how far you can go by keeping the exam at the same 6 hour duration, but incorporating multiple concepts at one time, so that you may use excel to build on top of other anwers. That’'s the route i was thinking of. Honestly, being able to build an LBO model is so much more constructive thatna “how to” test (in my opinion). Yes, they are theories and we should understand them, but I find application of theory just as important, and that means knowing how to use the proper tools to execute. In the real world, pencil and paper won’t fly.