Challenges faced in CFA Level 1 and how to cope
CFA (Chartered Financial Analyst) is considered to be one of the most difficult tests.It has three levels that have to be conquered. Normally, very little number of people can pass all the three level of CFA at one try. You would be surprised to know that only 20-30% of people usually pass all the three levels of this test in one try. Thus, many candidates start to really freak out before sitting for the exam. If you are planning to give the CFA exam then you need to understand it well. After all, you need to know the enemy well if you want to have any chance to win against it.
The first level of this difficult test is the CFA Level 1 aka Chartered Financial Analyst Level 1. Are you wondering how hard this test is? Well, this test is really, really hard. So, only the worthy and hard working people can pass this exam and get certified as the chartere holder. So, what are the challenges that the test takers have to face regarding this exam? Here are some ideas about what you might have to face if you are planning to take this test.
Requirement of wide knowledge
The first thing that you might find challenging regarding the CFA Level 1 exam is the amount of knowledge that you have to accumulate. The requirement of knowledge for this exam is just very wide. The exam covers a total of 10 topic areas. These 10 topic areas are Ethical and Professional Standards, Alternative Investments, Portfolio Management, Financial Reporting and Analysis, Derivatives, Economics, Fixed Income Investments, Equity Investments, Corporate Finance and Quantitative Methods. Some of these topic areas even have multiple courses. So, basically you will have to cover all the topics that you have studied in the first three semester of your business school. Thus you will to cover a lot of topic areas if you want to pass the CFA Level 1 test.
Discouraging pass rate
The CFA Level 1 exam has been seeing very low pass rate for many, many years. The whole pass rate can sure be discouraging for the test takers.
- Pass rate of 2008 was 35%
- Pass rate of 2009 was 46% or 34%
- Pass rate of 2010 was 38% or 36%
- Pass rate of 2011 was 39% or 38%
The low pass rate of the exam is another challenge that many people have to face in regards to this exam.
If you are planning to sit for this exam then you will need to be able to cope with its challenges. Coping with these challenges is not an easy feat. Here is a list of things that can help you to cope and defeat this exam.
Start at the right time
You should start preparing for the CFA Level 1 exam 6 months ahead of the exam date. If you start any late then that, then you won't be able to prepare fully for the exam. Just because everyone says that you should study hard and prepare for the exam, does not mean you start studying 24 hours or something similar hours a day. Cramming won't help you at all. Be relaxed and prepare a time schedule for your study time.
Remember the 300 hours rule
You must target 300 hours study time by the exam date. Of course some people might target 302 hours or less than 300 hours. But, it all depends on your knowledge and your studying capacity.
Know your calculator
Calculator is an important weapon if you want to defeat the CFA exam. So, you should start early and know everything about your calculator. You should start reading the paper that comes in calculator and understand how to use it.
Don't try anything bad in exam
The CFA exam test centers are very strict about the rules and behavior of test takers. So, do not do anything to piss off the proctor.