Stressed out about the upcoming CFA Level 1 Exam? No doubt. It’s hard, it covers a huge amount of material, and some of the concepts might be completely new to you.
So, how do you survive (and pass)? Below are the 5 simple steps that I recommend to all of my clients and help many pass.
Step 1: Close Your CFA Curriculum Text Books
Yes, that’s right. The fact is that the CFA textbooks are a less practical approach to passing CFA Level 1 than pouring over practice questions (more on that below!).
There are well over 2,000 fun filled pages of reading in there! (*crickets*)
For those not keeping score. The average person reads somewhere between 200-300 words per minute. A conservative estimate is that there are about 800,000 words to cover (or around 400 words per page).
At 200 words per minute that’s almost 70 hours of reading, assuming 100% comprehension.
As a tutor, I can tell you that 100% comprehension is almost never the case. Many students I see get stuck on small sections of the material for hours a time. The 70 hours estimate, can easily become 100 to 150 to ensure a thorough understanding. .Not to mention then you need even more time for practice questions.
With all of that said, start with the practice questions and then review concepts from the textbooks when you need more help understanding specific problems. If you need more than that get a study group or a CFA tutor.
What kind of questions should you be practicing? We outline that in the next step.
Step 2: Get Schweser’s QBank
The most valuable resource any candidate can get their hands on for the CFA Level 1 exam is Schweser’s QBank. This product has thousands of practice questions and is customized with questions specifically pertaining to the timing of your exam (e.g., June or December). It is also the primary resource I recommend to my students.
Here are the instructions on how to find it:
- Go to CFA section of Schweser’s website.
- Select the exam date and level that applies to you (June or December)
- On the right hand side under the sidebar “CFA” click the “+” for “Level 1”
- Then click “All Products” and you’ll find it when you scroll down (for around $299 USD)
The CFA Level 1 exam can be a race against the clock with 240 questions in 360 (1.5 minutes per question!). Thus, you want to be as familiar and as comfortable as possible with as many types of questions that you can.
I highly recommend doing over 2,000 practice questions if you really want to ensure a high likelihood of passing the exam.
Strategically speaking, for the CFA Level 1 exam, the sheer volume of questions makes becoming familiar with HOW the CFA Institute asks questions just as (and maybe even more) important than WHAT will be asked.
To boost your chances further let’s talk about note taking.
Step 3: Keep Lots of Notes
CFA candidates that have limited familiarity with accounting and finance undoubtedly have a steep learning curve and will need more time preparing.
Importantly, for these types of candidates I STILL recommend starting with practice questions. Use the QBank as a study guide by taking practice questions and then review the answers immediately after each question.
Keep detailed notes on the questions that trip you up. Creating a small catalog of the difficult areas of the exam will be hugely beneficial as you start reviewing your notes.
Have an exhaustive list of difficult concepts, formulas, and question types. Carry this list with you wherever you go, and during any idle time you have, pull it out, review it, and continue to familiarize yourself.
Reviewing this material will be key for retention.
4. Review The Hard Stuff Weekly
This may sound excessive. For the young folks taking this exam, it is not. There is a LOT of content and the stuff that really trips you up needs to be in your long-term memory. With all you are trying to cram into your brain for this exam, a lot will fall out.
Also keep in mind, that you only need to recognize the correct (or incorrect) answers given the multiple choice question format.
Reviewing questions that trip you up in the QBank are important. Check out the break down of your scoring. The QBank keeps track of what you get right and wrong. Any section on which you are scoring below 50%, needs more attention and focus. This goes double for FR&A, Ethics, Quant, or Economics sections – a combined 57% of the total exam weight!
5. CFA Level 1 Curriculum vs. the Real World
Lastly, I want to make a point about the curriculum itself.
When it comes to the CFA curriculum, there are some grey areas. Specifically, between what happens in the real world and what the CFA curriculum says should happen (according to theory).
When it comes to answering questions on the CFA Level 1 exam, always defer to the CFA curriculum’s teachings. For example, typically when stocks rally, bonds sell off. If your career in finance spanned the years of quantitative easing by global central banks, you experienced the opposite: bonds rallied, and stocks rallied.
Despite your real world experience, always stick to the CFA curriculum’s lessons.
For more on how much of the CFA curriculum matches the real world, check out our post here.
Final Thoughts
Overall, through my own experience and through my clients’ experience, I believe that focusing on thousands of practice questions is your best bet for passing the CFA Level 1 exam.
Yes, the passing rate is very low but there is a massive disparity of test takers, and many that don’t pass are typically unprepared. Practice hard, take notes, and review challenging concepts. You will improve your odds dramatically, and be on to the next level!