Thoughts on this?- PhD in finance says he would pass all three levels without ever opening a book

Well, it’s possible that a finance Ph.D. might know enough of the material to pass, but it’s unlikely that they would be able to answer enough questions correctly in 6 hours per level without drilling beforehand to get the format and making sure that all of the info is ready-on-demand and there isn’t lots of time wasted trying to remember stuff.

It’s a pretty douchey statement to say “I could walk in and pass those exams without studying.” My guess is that they underestimated the preparation and concentration required. The Ph.D. may have been exposed to and studied most of the material (though knowing the professional standards stuff would be a surprise; that’s pretty unique) and was commenting on that, without necessarily knowing how bad it makes him/her sound by saying it.

Joey D’Vivre said it was unlikely he could just walk in and pass today, and he already passed the exams (his Ph.D. admittedly was in mathematics, not finance, but he had plenty of financial experience that he applied his mathematics to).

Could it happen? Absolutely. Would it happen without looking at ANYTHING before each test? probably not.

There are probably very few people who can but they wouldn’t be the ones to talk shit about it.

I think this is probably most accurate. I think there are people on Earth that do exist that could pass all three without looking at the material. Just a matter of actually being one of the few

^I doubt there’s anybody who can.

First, you have the Ethics and GIPS, which represent 10-15% of the entire exam across all three levels. A finance PhD with his Master’s in Math and Bachelor’s in Accounting has never been exposed to these.

Plus, there’s all the stuff that isn’t covered in school or a PhD program. (At least as far as I know, it’s not.) Things like “the seven qualities of a good benchmark” and the various trading strategies aren’t taught.

Then there’s things that CFAI does that are different from the way you’re taught in school, such as how to calculate price elasticity. I was always taught that it was % change in price divided by % change in demand. But CFAI does it just a little differently. (I don’t remember CFAI formula off the top of my head, but I know it was different.)

And there are all the little inconsistencies in CFAI stuff itself. EG - at Level 2, they teach the HHI model in one reading using decimals, then they teach it in another reading using percents, and the interpretation is very different. Another example is the multiplicative vs. additive problem in L3. (If you have 5% inflation and 5% real return, what is your nominal return? Is it 10%, or is it 10.25%?)

Not that any of these things are difficult to understand or internalize, especially for a finance PhD. But they are something that you have to have seen at least once before you take the exam.

Highly unlikely, but not impossible.

True. But also keep in mind, though, that the guy i was mentioning also works as a PM on the side. So his knoweldge would not simply be that from academia, but also from real world PM experience as well

+1

agree. stephen hawking > finance PhD

+1

I don’t think that any one will pass CFA level exams if they have not solved atleast one mock per level.

I don’t think even a PHD in finance will find it “easy” to solve MCQ’s and item sets asked in cfa l1/l2 exams without going through at least 1 mock for each level.

If someone knows 55% cold, and makes pure, uneducated guesses on the other 45%, that’s 70%.

Level III’s essays would rough though.

furthermore, the guesses likely wouldnt be cold or uneducated. I think itd be safe to assume a 50% correct guess rate, meaning itd only be needed to know 40% cold.

I had a professor my last year in my MBA program that was a Charterholder, had degrees from Yale and MIT and had successfully managed a lot of money before retiring to be a teacher. We’ve stayed in contact and I asked him just now if he felt he could pass L1 again without studying.

His response was to “get off analystforum and get back to work.” I thought that was pretty spectactular.

  1. He was being humble

  2. He didn’t want candidates here to underestimate the test and underprepare

  3. He volunteered for the Institute and didn’t want to denigrate it

Can someone run a simulation? Given 120 questions in L2, and multiple choice - 3 choices, how large an N size do you need where you can get 1 student to get 70%+ correct from total random guessing.

The skills required to complete the 3 levels of CFA are completely different to those needed to complete a phd. A phd requires a huge amount of knowledge and research in one very specific area whereas the CFA exams require a very broad, but relatively shallow knowledge of a huge range of topics. So it is in no way shameful for a finance professor to need to do some prep work before taking the exams.

Ethics alone is 10% of level 1 (if I remember right) and there’s no way you will pass that without prep.

A professor needs to do prep work before teaching a class they’ve given a dozen times. Why wouldn’t they need to do some prep work to take an exam some whose contents they may have seen but not reviewed in a decade.

I could see it be done with minimal effort (relatively speaking), but I’d be highly skeptical of success with no preparation. An individual at my firm is a PhD and senior grader for CFA Exams - and he studied. Granted it was much less than anybody else I know, but he still had to study.

I wish I could ‘like’ or ‘favorite’ this response. Well played by your professor.

X~Binomial(N=120, p=1/3)

70%*120=84

P(X>=83)~10^(-15)

On average, one in quadrillion random-guessing candidates should be able to do it.