FinancialExams® White Paper
Exam Preparation Program For the Level I CFA Exams
Taking the CFA Level I Exam
1. USE NO. 2 PENCILS! DO NOT USE MECHANICAL PENCILS WITH SYNTHETIC NON GRAPHITE (NON ELECTRICAL CONDUCTING) COMPOUNDS WHICH WILL NOT BE COMPATIBLE WITH THE ELECTRONIC SCAN GRADING.
2. MAKE SURE THAT YOU PURCHASE THE CALCULATOR REQUIRED BY THE CFA INSTITUTE. BY THE WAY ITS IMPORTANT THAT YOU TAKE IT TO THE CFA EXAM!
How to Prepare For the Exam
If you are like most candidates, you do not have enough time to give every Topic, Study Session, Reading, and Learning Outcome Statement first priority. You cannot master everything. Therefore, you either start at the beginning and study until you run out of time–or you prioritize.
What follows is an analysis of information which we think relevant to the issue of how to prepare for the exam, to help you decide where you should place your emphasis.
Analysis: The Background of the 2013 Exam
It is dangerous to try to forecast the content of the exam. The only way to be confident you can pass the exam is to have a disciplined approach and build up a thorough understanding of the CFA Institute’s Body of Knowledge. You will be tested on your knowledge of the syllabus and your skill and ability in answering questions based on this Body of Knowledge. Make sure you do lots of practice questions to test your knowledge and see where you need to go revise further.
There Are No Shortcuts!
Below we look at the recent developments to help understand what the CFA exams in June and December might look like and develop an approach for preparing for the CFA exams.
- Starting with the 1995 exam, the CFA Institute has discontinued the publication of actual past exams. Candidates pledge not to reveal the contents of the exam and the creators are, of course, bound to secrecy. No one who is free to give advice about the upcoming exam has anything near perfect knowledge of the contents of the most recent exams.Each candidate should have received the source Readings including 2013 Sample Exams. The questions from those exams are not included in this FinancialExams program. However, it is likely that the sample exams, of which these are annual sets, are diverging from reality year by year. Fewer than 10% of the questions in last years CFA sample exams are changed from previous sample exams. Our assumption is that the actual 2013 exam will have evolved from the 2012 exam to a much greater degree than that.
- CFA Institute has remains consistant with the 2012 required Readings for 2013. The decision to cut back from the 2012 required Readings was reasonable because the scope of the 2013 Readings had grown to what some considered an unmanageable size.The 2006 discontinued Readings were mainly basic background introductory Readings. Without them, for some candidates it is more difficult to understand how the many elements of this broad and rich body of knowledge fit together. By adhering more closely to the overall scheme that CFA Level I focuses on “tools and concepts” while CFA Level II focuses on “asset valuation” and CFA Level III focuses on “portfolio management”, CFA Institute has removed from the CFA Level I curriculum some of the structure that held the curriculum together and helped it to make sense to the student. What has been kept is “how to use the tools”, but more and more of “what the tools are used for” has been held back for CFA Level II.
Of more immediate importance to us is the gradual changes in the Learning outcome Statements (LOS) make it more difficult to forecast what the exam will emphasize. Many of the “All-Time Favorite” questions now have less support in the Readings than they once did. So, will CFA Institute abandon many of the all-time favorites, heavily represented in the 2000 Sample Exams? If so, what will take their place? It is important to study the new 2013 LOS, as questions are likely to appear on the latest topics, but many course providers rely heavily on ‘old’ questions and do not give adequate weightings to the new topics. FinancialExams makes sure there are questions on all the new topics added into the 2013 course.
- The third change which makes it harder to predict where the exam will go is the Learning Outcome Statements which were introduced of in 1997. They are clearly a helpful addition to the study guide materials. The candidate can use them to focus their studying and to check retention of key facts and concepts and they show how the Readings are likely to be tested.So, what is the problem? The Learning Outcome Statements are much more focused than the Candidate Body of Knowledge Outline – until recently the most complete statement of learning objectives.
Isn’t that a good thing? The problem is that we do not know the extent to which the introduction of the Learning Outcome Statements has modified the exam.
No CFA Level I exams given since the LOS were introduced has been made public. If we reason from the sample exams which have been published, we would assume that little has changed. If you performed a painstaking comparison of exam questions published by CFA Institute with the Leaning Outcome Statements published by CFA Institute, as we have done, you would find a surprisingly high level of mismatch. Some published questions do not fit easily into any of the Statements, and many Statements (and entire Readings, for that matter) are not covered at all in the recent Sample Exams. Where a mismatch exists, will the 2013 Exam look more like past exams or more like the current Learning Outcome Statements?
It is possible that CFA Institute will attempt to apply the LOS approach to the exam by spreading the questions more broadly and thinly and paying at least token attention to almost every LOS. While there will be some shift in this direction, we expect that it will be limited.
- The last change is that the CFA Institute has provided new information on the format and content of the Questions. They have explicitly said which structures and terms will not be used. Some structures will not be used in questions stems include EXCEPT, TRUE or FALSE. Terms such as closest to, most likely, least likely, best described, most accurate, least accurate, have been replaced with most appropriate and least appropriate. Distracters such as I only, II only, III only, and II and III only, all of the above, none of the above will NOT BE USED. The order that distracters are presented will be shortest to longest and so on. On content we have also been given information, for example, that empirical findings will not be tested.
FinancialExams have, as far as practical, removed from their data base any old-style questions that do not comply with CFA Institute’s specified format. Our aim is to write questions that will be similar to the ones that candidates face on the exam itself and avoid obvious mistakes such as making distracters grammatically inconsistent with the question stem.
Candidates often say that the exam questions are harder than the ones given by course providers. We aim to make our questions demanding to thoroughly test candidates’ knowledge and comprehension.
We Have Examined Four Things Which CFA Institute Has Done:
- it has stopped releasing actual Exams
- it has modified the Required Readings
- it has introduced Learning Outcome Statements
- it has provided information on the format and type of questions
The crucial question is what role was played by each of these four mindsets in developing the 2013 CFA Exam. The one thing of which we are most confident is that no single mindset was completely dominant in designing the exam.
So, it is important to pay close attention to both the actual and sample exams which CFA Institute has published. Even though the body of questions is standing almost still (CFA Institute added only 20 new questions to the 2013 Sample Exams), CFA Institutes’ thinking has probably not evolved too far from this traditional base. 1600 of our 3000+ CHECK questions are designed from the CFA Institute Candidate Body of Knowledge. Real World Knowledge and concepts make up the remaining CHECK questions. If you understand those questions and understand the underlying concepts well enough to handle similar, worded questions, you are well on your way to mastering the Level I Body of Knowledge and passing the exam.
One Last Point
Don’t underestimate the importance of the Ethical and Professional section, although it is only one Study Session, or 5 Readings, it has a guideline weighting of 15% of the exam. For most candidates their total score will usually decide whether they pass or fail but CFA Institute states that for marginal candidates the Ethics section score could be the deciding Pass/Fail factor.
Focusing Your Study
FinancialExams course is an Instructor Lead Self-Help and Interactice Exam Study Aid and Exam Preparation Tool. It is not intended to replace the CFA Institute Readings, the CFA Institute Study Guide, any seminars, or other tutorial products. It is to be used in conjunction with other product on the market and to help you focus on your strengths and weaknesses; to guide you on what you already know and where to apply your time on learning new concepts.
How FinancialExams Can Help You
We have already suggested several points at which the use of FinancialExams to assess your strengths and weaknesses can help you develop a prioritized study plan.
But, that is only the beginning of what our program can do for you. Used in frequent small chunks or in intensive sessions, FinancialExams can quickly, efficiently and painlessly reinforce what you are learning and polish your test-taking skills. When studying gets to be a drag (when your eyes glaze over) throw in a quick Adaptive Exam as a change of pace. You will learn more quickly and even refresh yourself at the same time.
No matter how many times you use it, the Program will remember what you know and what you need to learn and will bring back the questions you have answered incorrectly more often. (Unless and until you “Clear History.”) And it will tell you exactly where to go by chapter and page number for more information if the Correct Answer and the Explanation still leave you uncertain.
What We Have Done For You
In developing FinancialExams, our focus has been upon making the exam preparation process as useful and as painless as possible.
We use a software engine which is among the easiest and quickest to install and use of any in the entire corporate training field. It has been adapted from training programs used by programmers and software engineers around the world to prepare for CFA certification exams. And it has been refined to be particularly easy for non-technical students to use. Many install it and use it without ever looking at the Instructions. We feature speed and content, not bells and whistles. It has no sound; you can use it in any work environment. It has no RAM-gobbling graphics or animation to slow your progress from question to question. At worst the Program will pause for a moment while it calls up one of our more complicated mathematical solutions.
And we have gone out of our way to provide you with the cleanest and most useful body of questions possible. When you take all the questions from the Level I Exams published by Financial Exams, cuts out all duplicates and then set aside all of the remaining questions which are based upon Readings which are no longer required in 2013, you are left with over 3000 unique relevant questions. We have done this for you. And, it is not always easy. CFA Institute often moves questions from one Topic to another when it reuses them and frequently changes the wording in ways which do not change the substance but do make it difficult to recognize duplicates. Where Readings have changed, we have updated the terminology and even the answers in older questions. This is most important in Ethics, where the Standards of Practice have been substantially revised in the latest edition of the handbook which is used for the 2013 exam.
Where we have added questions of our own design as well as questions from other CFA Institute Candidate Body of Knowledge, we have selected them carefully to fill in the gaps to address the Topics which the Sample Exam does not cover adequately. We have not piled on additional questions where CFA Institute has already provided enough. We prefer to cover all Topics adequately with fewer rather than more questions. We think most candidates would agree.
Nor did we stop there. Our Explanation boxes, which you can click on for any question, provide extensive background detail in a concise format. Note-taking, Printing and Historical Analysis capabilities are a breeze to learn to use and habit forming for many. Plus, we provide both technical support and content support for all CFA Level I Candidates.
We want you to like the product, to use it with greater and greater frequency as the Exam approaches, and to PASS the real Exam!
Where to Find Us
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Visit our website at http://financialexams.com often for additional information and program updates.
Good luck on the Exam!
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