A lot of the stuff in this exam is presented differently from what you would do if you were really working in the field. He would probably not pass straight without opening any material. But he would probably be able to do it with less effort than the vast majority of the people on this forum.
Yes, I agree.
It’s a regular joke in my classes that “there’s the right way, the worng way, and the CFA way. and the only one that matters is the CFA way.”
Their presentation is different in some topics from both the academic treatment and what’s done in practice. One example that differs from acadmeic treatment is how they treat flotation costs when calculating cost of equity. Out of 10 intro finance texts, I’ve only seen one that does it that way.
True, I’m younger and much, much, much better looking.
A professor at a local college sat for CFA Lvl 1. He thought he could wing it with his vast finance knowledge… so vast indeed… he FAILED lol.
^ L1 is damn easy. I wouldn’t be surprised if I got a close to perfect score. I was so confident that I bought the Schweser L2 books and started studying before I knew my L1 results (I did L1 in Dec, so wanted to get a head start for L2).
Nicely played
Being a PhD student in Finance myself, I can safely say that nobody, not even a distinguished professor will be able to sit and master the CFA exams with zero preperation for the following reasons:
-
having a PhD does not make you a smarter person. I actually know some PhD students who are quite stupid (finance is better, but management and marketing harbors quite some goofy folk) and I myself do not consider myself much smarter than the average MBA or MSc. Pursuing a PhD is not really a sign of supreme intelligence, but rather a sign of focused interest.
-
PhDs are experts in their very narrow field. I actually chose to pursue the CFA charter not only for the potential career benefits, but rather to have a solid basis of knowledge in the area of finance. My field of research is very very very narrow and I still do not consider myself an expert. After all, you can only learn so much in a lifetime.
-
the CFAI body of knowledge tends to teach things in its own manner. Econ is the best example. I had the luck of being forced through loads of hardcore econ material already at my undergraduate level and had a solid knowledge of macro and microeconomics before enrolling in the CFA program. Although the concepts are the same, the CFAI textbooks have imho a very peculiar selection of basic topics of economics and I had to “relearn” those topics because they somehow conflicted with my previous knowledge.
however PhDs might find it easier to prepare for the CFA exams because:
a) they can manage their time very freely. Academia is still a very relaxed occupation despite recent developements.
b) they are used to read, filter and memorize large chunks of complex information. If you are used to chew through dozens of wordy research papers every week, the CFAI textbooks are a refreshing alternative.
c) ON AVERAGE PhD students are smarter than the average Joe, however, the CFA program requires more than smarts. You have got to be ambitious, tenacious, humble and consistent - qualities some people in academia are in dire need of.
Some facts that I know–I began the CFA program in 2008, after my first year of grad school. There was a Finance professor there who started studying for CFA at the same time. Whether he studied or not, I do not know. But I know he ordered some Schweser books.
I failed L1 once and L2 once. So I guess you could say I went 3/5, and I got my charter at the same time he did.
Hmm with my academic background i can say CFA is much tougher than a Phd from avg place
But a Phd from a reputed university can be hair breaking , as u need to handly the systematic risk of — guide
I think everyone here is emphasizing the merits of a PhD too much.
The debate really should be- is it possible for anyone to already have enough knowledge from their career to pass all three levels without studying.
Besides the simple statistical possiblity of passing by chance, imo the only person likely to pass without ANY prep is a senior portfolio manager who has a strong academic background, who kept with recent developments in the industry, who is above-average intelligent and most importantly whose company has adopted the CFA codes and standards as it compliance framework and vigorously enforces them.
To the last 2 posts, that’s why I put forward the name of Mohamed El Erian.
exactly. And why I’ve said this whole thread that you’ve made spot on posts
Playa Hater Degree
still no. for the same unchanged reason that the curriculum is simply too broad with too many topics to cover.
/thread
It’s certainly possible to know enough to pass all three levels without studying, but when you hit L3 you have a problem. Without the answers in front of you you are interpreting what the question is and what they want you to answer. I saw a question on a UK qualification - Evaluate five key risks associated with hedge funds.
I would have totally missed this question as I assumed it was client risks, whereas the question was talking about systematic risks.
Knowing the material is not enough you need to know how to answer the question, that’s why mocks are so important.
^So, if I may paraphrase Monito’s comment…
“It’s possible to know enough to pass without ever studying, but you need to study in order to pass.”
Got it. Thanks.
bravo. very helpful advice. not an oxymoron at all.