Tackling Essay Questions

I’ve written a general post on my views on how to approach L3 but I thought I would write one expanding on how to tackle essay questions since nobody seemed to be able to guide me on this when I was starting on L3.

Overview The AM session is “constructed responses” meaning that you have to write out an answer. You will be given 8-15 questions which all come with many sub parts. Each sub part will have a number of minutes associated with it which correspond to the number of minutes (180) in the morning session and these in turn correspond to the number of points available. So an 18 minute question would be worth 18 pts = 10% of your AM points = 5% of your overall exam.

Location, location, location You will have to write your response in either a space provided below the question or, frustratingly, on lined pages at the end of the question. it is crucial that you write your response in correct place. When the responses are several pages in the booklet beyond the question it adds another level of frustration flipping back and forth. If you need a cautionary tale to reinforce this, clickhere.

Mock and Practice Exams Also, none of the practice tests (save the Schweser live mock) use this identical format. The Schweser mocks mostly ask you to write in the space below the question so you don’t get practice flipping back to the lined portion that you will find in the real deal. Also, very annoyingly, the past exams on the CFA website don’t give you any space to answer your questions so you have to simulate with scrap paper. Also, to add to your frustrations in this regard, none of the CFA mock or sample questions include AM style constructed responses so you only get PM practice with these. If you are like me and save that CFA mock for your final practice, this can be a real let down. I simulated it by using an AM session from a prior year but this is not valid since you won’t get a representative spread of topics across AM and PM for your practice purposes.

Read the F***ing Question As I wrote before, but is worth repeating, sometimes the CFA questions may appear to ask one thing but expect another as a response. In L1 and L2, you could deduce the question’s true meaning from the responses presented. In L3, you may find yourself frustrated when you spent time honing a perfect response only to realise from the model answer that they wanted something else entirely (leaving you with pretty much zero points).

Writing the F***ing Answer Once you have considered the question, really consider your response. The temptation due to time pressure is to just start writing but you will probably find that this means you spend the first few sentences figuring out what you REALLY want to say. Write as succinct a response as possible i.e. write only the information you need to answer the question (and sometimes this will be only a single sentence). If you give yourself too much rope, you might just hang yourself. Your answers can be bullets or sentence fragments. PRACTICE! The more practice exams you write, the more you will develop an intuition for the kinds of responses that get full marks.

What do the essays test Almost every past exam has at least one question on an individual investor including IPS and behavioural biases and other things. Remember, one question may have several subparts and may be a significant percentage of the exam. Past exams also usually have an institutional investor question which seem across the years to favour pension funds. Beyond that, they can test ANYTHING. Ethics, you will be glad to know, is almost always tested in the selected response portion in the afternoon (based on past exams and Schweser profs) but GIPS and everything else can be tested ANYWHERE including the morning.

Calculations Show your work as I’ve mentioned before. You can receive partial credit if you have forgotten a term or transposed something. This means training yourself to slow down a bit. I’d trained myself to work out calcs largely on the calculator without any writing. I needed to reverse this. It also stinks because in mult choice you can see if you have the write answer - here you cannot so double checking is vital. Also, I was confused on how to show calculations made on a calculator e.g. a time value of money question. In this case, you will actually write out how you process it on the calculator i.e. “FV = -10,000, N = 144, I/R = 10” etc. and then put FV = whatever your answer is.

Grading I mentioned this too before but it bears repeating: The CFA graders grade one question (and its subparts) each. So the person grading Q1 is not the same person grading Q2. Therefore, don’t be afraid to repeat info from Q1 in Q2 if you feel it is necessary to answer the question.

Manage your time When a question says 4 minutes, look at your clock and only give yourself 4 mins. Move on. It’s easy to get mired in one question. There are some calcs (particularly in the IPS) that are given say 10 mins and there is NO WAY I could get it done in less than 15 mins and then play catch up. As a rule of thumb, give one sentence per minute allocated to the response e.g. a 4 minute question only deserves 4 sentences at most.

The exams you take (both practice and otherwise) should have an index of all the questions and the total number of minutes allocated to each (i.e. the total fo the question’s subpart minute allotments). PAY ATTENTION TO THIS! You may find that the minutes are front or back loaded so you want to have an overview initially of how to plan your attack. I didn’t even get to answer the last 2-3 questions which is a huge percentage but I managed to make up for it in the afternoon. If you come out of the morning devastated and certain you have failed, SHAKE IT OFF, and go kick ass on the afternoon - that’s what saved me I think.

IPS The IPS calculations are not particularly difficult yet they tripped me up almost every time. The key is to find a method of writing out these calculations so that you know WHAT IS PRE- AND POST TAX and where the cash flows are in the timeline. Some of it was not terribly obvious or intuitive to me.

Model Answers On practice tests, you will be given model answers. These are the perfect answers but by no means the only one. Not only does the grader have discretion (i.e. you may give a convincing argument that is totally different from the model answer) but the model answers and just that: Models. They are the responses that someone with access to the materials and hours to spend on it might write. A shorter, less articulate, less complete answer may still get full marks.

Waffles If you don’t know the answer, you won’t get points for answering a question you wish they had asked. Try and use your general knowledge and intuition to answer the question. The most points are awarded for direct answers to the question asked.

Circles There are some constructed responses which have several columns: The first might be statements made in the preceding question, the second might be whether they are true or false and the third might ask you to explain why ONLY if you marked false. These are deceptively tricky since if you get the True or False wrong, they don’t even look at your explanation so pay attention. Also, some of them resemble ethics questions in their ambiguity and you sit there going “well, sort of true and sort of false - it depends”.

Handwriting On exam day, even the best handwriting starts to look like a dying man’s last words scrawled in blood, sweat, and tears. Don’t worry about this. The graders are used to it and it is rarely the case that something is so badly penned that it cannot be graded. I would recommend writing smaller than usual. When stressed/pressured, my writing gets quite big which means you might fill the allotted space with very few words. This decreases the amount of info you can convey and also leaves you no room for error if you decide you want to correct it if you are writing in pen.

Command words each question has a command word (e.g. explain, define, calculate). The most points are awarded to answers that response directly to this command word so you should familiarise yourself with them. They are on the CFA website here.

Practice makes… well, a better result The AM portion is a whole study session in itself and you will need time at the end of your reading to get a solid grasp of the kinds of responses required and also practice at a new skill - explaining concepts and ideas in a full thought. If you have a VERY tolerant and patient friend/partner/spouse, try explaining things like asset liability management to them. Otherwise, a study group would be good for this i.e. getting one member to present a topic each week.

Good luck! You’ve passed L2, which is a HUGE hurdle.

my goodness…maybe you should be a cfa instructor hehe

sorry - I’m just trying to do unto others, etc. since I came on the L3 forum at this time and there were posts that basically said f*** off and I didn’t want that to happen to others. Trying to keep my karma clean.

huh…? why sorry…? i think it’s great that you took the time to think and write this stuff…I am sure the new candidates would appreciate it very much! Maybe a boardmember can sticky it somewhere…

Glory Be To God, Trimonious is the greatest instructor ever, I passed purely because of him.

Trimonious - the two posts you started, Ive taken a print out. I am planning stick them on the wall near my desk when I start my preps in the next couple of weeks.

“Thank you” probably conveys probably much less than what I intend to say. But A BIG THANK YOU!

All the very best for your results mate.

Thanks very much OP!

Dear T-money,

I love you. That is all.

Sincerely yours,


I liked this point: “Your answers can be bullets or sentence fragments.”

One thing that really helped me with my approach to this section of the exam was to think of it as “short answer” instead of “essay.” No reason to draw on your knowledge of Strunk & White for the CFA–keep it simple!

Great post, Trimonius. Thanks for taking the time to do it.

but you don’t have to do it in pen.

Wish mods could stickey your 2 posts. Very helpful. Feeling some good karma headed your way in 11 days. :slight_smile:

Thank You!

You *do* indeed have to do it in pen. Check out the exam rules here.

“Use blue or black ink. You must bring your own pen on exam day. Testing personnel will not provide writing instruments to candidates”

Can you use eraseable pen?

preferable : pen

allowed : pencil, erasible pen

Alladin is absolutely right. I’m a nerd and just called the CFA society. They wouldn’t tell me my result but they would tell me that they prefer pen because it smudges less than pencil in transit from grader to grader but that pencils are certainly allowed. I’ve updated the OP to reflect this.

I wish I’d known that in June, Alladin! You could have helped some of my stress go away!

haha Trimonious2…I do hope we all just pass and get it behind us!! That would be a good end for 2012 which incedentally is also the end of mankind

Trimonious, i find your advices very useful - many thanks. You are the Mother Teresa of Analystforum :slight_smile: i just hope for your own sake that you are not like that in your career. A totally differeng thought (apologies for the abrupt switch of topic): i dont wanna start the Analystforum Speing rebellion here and probably this has been chewed over a couple of times, byt the whole “study together, pass together” principle exceeds my intellectual capabilities: in an exam such as Cfa where the results strongly depend on the overall distribution, why would you want to go out of your way to teach as many candidates about the very approach you have elaborated in millions of felt study hours? Appreciate that the forum is (or SHOULD BE) a tit-for-tat knowhow exchange, but to play mother teresa seems somewhat self-destructive to me. By the way - is it allowed by the ethics rules of CFAI to disclose information in a granularity such as you did (shame on me to ask such things). And another switch of topic: in spite of my provokative comments, if you still answer me the following question, then you will have delivered the proof yhat you are the reincarnation of Mother Teresa: are there any good books (apart from the CFA-Vendors’) which I could read in order to be better prepared for the AM essay in L3? Thanks :slight_smile: Sincere Apologies for being a wannabe-Sokrates today.

Thanks for the comment. i think you have three main points and I’ll try to respond to them:

  1. is giving advice on this forum self-destructive? Really interesting question. I’ve started another post to discuss this as I would like to see what people think.

  2. Am I violating any CFAI ethics or rules by discussing the exam in such detail. I definitely tried very hard to avoid falling afoul of any rules - I want this charter badly and respect the code and standards. Nothing I revealed (aside from the approximate number of questions on my test) is anything you couldn’t find yourself by doing a bunch of old exams and practice tests and reading Schweser’s approach to the test.

  3. Any good books to prepare for AM? Not that I have found. I definitely found the very best way to prepare for the AM session is practice exams and old exams. In previous levels, I did maybe 4 practice tests in total. For this one, I did eight plus the 2 sample exams from CFAI. The model answers are very useful in developing an intuition about the kind of answers expected - especially the Schweser model answers where they have a “for the exam” succinct answer followed by a more detailed description. I didn’t use other practice tests but I imagine they are similarly useful.

Forgot to update this one with the good news that, on Saturday night, I’ll be at the dinner and get the piece of paper an’ everything… officially trimonious2, CFA.

Good luck, everyone!