Advice to those who Pass the Level I exam

By Arif Irfanullah, CFA


Posted on 24-01-17 at 3:09 pm


Dear December 2016 Level I Candidates,

In a day or two, the moment of truth will come.  I’m sure you have been anxiously waiting for your Level I result.  You will experience the agony of failure or the thrill of victory.

If you have cleared the exam, this is indeed a milestone.

If you are interested in my thoughts on what do next read on.

I passed the exam.  What next?

About this time every year I get the same question from successful Level I candidates: should I take the Level II exam in June this year?

As with so many other situations in life, the answer is: it depends.  Specifically, I’d suggest you go for the Level II exam in June 2017 only if both the following conditions hold:

– You can take out sufficient time for studies (if it seems like you’ll have some intense work and/or personal commitments over the next few months then I’d not recommend taking the exam in June 2017)

– You are good with numbers.  With a focus on pricing and valuation, Level II is much more quantitatively intense relative to Level I.  (If you struggle with numbers, Level II will require an extra effort.)

As this stage it is also useful to learn a little bit about what you are signing up for.  The Level II exam consists of two three-hour sessions.  The ten topics are the same as Level I but the weights are different.

Ethics: 10 – 15%, Quant: 5 – 10%, Econ: 5 – 10%, CF: 5 – 15%, FRA: 15 – 20%, Equity: 15 – 25%, Alt: 5 – 10%, FI: 10 – 20%, Der: 5 – 15%, PM: 5 – 10%.

The questions are MCQ based, but on case studies (vignettes).  A case study generally spans one or two readings from a particular topic.  You’ll then have to answer 6 questions per case study.  You’ll have 10 case studies per three-hour exam which means 18 minutes per case study and 3 minutes per question on average.  This is twice the time you had at Level I but here you have to read/understand the case… and some questions involve a fair amount of calculation.  Level II is significantly more quantitatively intense relative to Level I with an emphasis on pricing and valuation.

Coming now to some study advice. The obvious first thing to do is create a schedule.  Normally I say that you should be done with the course 4 – 6 weeks before the exam so you have sufficient time to review and practice.  If you are starting now (late January 2017) you can target completing the course 15 – 25 days before the exam.   This gives you approximately 110 days.  With 18 study sessions you have approximately 6 days per study session.  You can spend more or less than that depending on your comfort/expertise in a given area.  However, be careful not to spend too much time on a particular reading/study session as that might compromise your effort in other areas.

In terms of the sequence, I suggest starting with FRA and then doing Equity.  These are the two biggest topics and jointly contribute to about 40% the exam. It is nearly impossible to pass without doing well on FRA and Equity.  After that you can cover the topics in any order you want.

Make sure you do the curriculum practice problems at the end of the reading.  The case study questions in the curriculum are the best indication of what you’ll get on the actual exam.  You should also go over the curriculum examples… especially the ones with short and crisp exam-type questions.  You’ll see what I mean once you start reading the curriculum examples.

Once you are done with the curriculum end-of-chapter (EOC) questions, also try and do practice questions from other sources.  Some prep providers offer practice questions for each reading.  In the final few weeks focus on the CFA Institute practice questions and mock exam.

One final thought. Since it is already late Jan, you might find it difficult to master the curriculum.  Focus on understanding the main concepts and then practice as many questions as possible.  Practice, practice and more practice is the key to success.

Best regards,

Arif Irfanullah, CFA