Next week, thousands of candidates will be taking the CFA Level 1 exam. If you’re one of them, take careful note of the tips below. They should help you tackle Level 1 successfully.
1. Study the CFA curriculum; visit the CFA website for the Candidate Preparation Toolkit (latest info on curriculum, errata, exam rules, sample exams, etc.).
2. Apply the concepts with end-of-chapter problems, sample exams, practice exams, and mock exams. Take a mock exam under test conditions (i.e. timed, without looking at materials) and check your responses against the answers later. At least as much time should be spent reviewing incorrect answers as actually doing questions to ensure that you are learning from your mistakes.
3. Make a dry run of the exam day experience on a day off before the exam: determine commuting time, parking availability, public transport schedules, etc. On exam day, make sure you bring the valid passport, the details of which you registered with, along with your exam admission ticket, a watch, an eraser, and pencils (number 2 or HB lead).
4. Memorize the formulas that are in the learning outcome statements (LOS) — at Level 1, candidates are expected to be able to perform the actions specified in the LOS. Remember to build in time for learning the keyword/factual areas.
5. Become proficient at using any of the specific calculator features needed to address the LOS in the curriculum. You may be expected to calculate present and future values, annuity payments, square roots, and exponents. You should also know how to use general features of your chosen calculator (bring along a spare just in case).
6. A common question on the exam is: ‘When trying to calculate a ratio that mixes income statement and balance sheet statement information, when should the average values of the balance sheet information be used, as opposed to the beginning- or end-of-year values?’ Look at the intended use of the ratio – it will help you choose the appropriate data.
7. Questions are organized by topic area. Consider starting in your area of expertise. This will help you build confidence. However, if you choose to answer questions out of order, be careful to mark the right questions on the answer sheet.
8. Answer all questions — there is no penalty for guessing.
9. Stay calm and allocate time wisely; don’t look for tricks. Keep thinking positively and believe that you are going to pass. If it appears that a question is going to take a long time, continue to other questions and come back to the more challenging one when you are done.
10. Remember: it will be over within a fortnight and you can deservedly enjoy your Christmas holidays in anticipation of the satisfaction of finding out in January that you’ve passed.