Here is a little background on the Chartered Financial Analyst (CFA) designation. To attain the CFA designation, you are required to pass a series of three exams as well as acquire sufficient hours of work experience. The Level 1 exam study material consists of 10 subject areas: ethics, quantitative methods, economics, financial analysis and reporting, corporate finance, portfolio management, equity, fixed income, derivatives and alternative investment products. The actual exam consists of 240 multiple choice questions that are broken down into two 120 question blocks. CFA candidates have three hours to complete each of the two blocks.
It took me a little while to get into the studying routine, but thankfully I had little else to do but study. My Danish course and homework took about 20 hours a week, so I did my best to devote at least 40 hours a week to studying. While the economics section was pretty straightforward, I found the section on financial reporting and analysis rather daunting. I also have never quite liked probabilities (ever since third year university and having to sit through an early morning statistics class after Wednesday night karaoke at Father and Sons), so I actually avoided that chapter entirely. Otherwise, I was at least able to cover all the other information.
It is not the actual material that is difficult...it is the overall quantity of material that you are tested on. One thing that I found really encouraging (insert sarcasm) are the friendly postcards that are sent to you regularly from the CFA prep guide companies. I particularly liked the one below and attached it to my fridge for added inspiration. Yes, it is true that the pass rate of the exam is usually between 30% and 40%, but I really did not enjoy receiving 'friendly' reminders of this in the mail. This failure rate is so very broad, and I would have much preferred more specific statistics on who is failing the exam (country, age, educational background, employment) or how individuals who purchase the study guide perform relative to those who do not purchase it. Ultimately, I chose not to spend an extra $300 on a study package.
While the June CFA exam has many test centers around the world for the three levels of CFA exams, there are far fewer locations for the December writing of the exam which is solely for Level 1 writers. Unfortunately for me, there was no testing center in Copenhagen so I decided to go to one of the biggest testing center of all: London, England. I took the advice of some other CFA candidates I met in Greece and booked a hotel very early in the area of the Excel Center; apparently most candidates like to spend the day and night before the exam near the test center. I chose to stay at the lovely budget hotel chain: Etap. It was still a half hour walk to the test center, but far cheaper than the ones right beside the Excel Center. I mentioned in one of my previous posts that I was very lucky to actually make it to the exam. I had made the decision to book with British Airways, and the flight I took from CPH was the only one to make it to London on the day I flew due to the poor weather. If i had booked with Easyjet, I would have not made it to London for the exam, would have had to repurchase all the books and wait to write the exam the following June.
Exam Day.
Of course I hardly slept the night before the exam. I was at the Excel center by 7:30am the morning of the exam. I had half an hour to sit and chat with other CFA candidates (because frankly I was sick of studying) before going through security. The one question that everyone asked each other right off the bat was "Which study material did you use?". My reply was always that i just read the CFA published material and worked through the practice questions. Apparently this really astonished most people; I guess when you are working full time and studying for the CFA exam it is useful to have a condensed version of the material to really help you prepare. This is good to know in the event that I have to rewrite this exam.
After passing through the identification and calculator checks, I was escorted to my seat in the massive exam writing room. One CFA candidate told me that there were between 2000 and 3000 people writing the exam in that room. As I was laying out my two calculators and pencil on my desk, another CFA candidate came up to me and asked if he could buy my second calculator off me. Apparently he had not checked the battery of his calculator and it had died right before the exam. I declined though, I had no idea how long either of my batteries would last. At 9:01, the fun of the exam began. Sure it was long and grueling, but the part I really appreciated was being able to go to the bathroom during the exam (I had not been sure this would be the case). I stayed for the entire three hours of the morning exam, but left the afternoon sessions when there was about 45 minutes left...I was at a point where I just could not take it anymore (likely not a good sign, lol).
Ultimately, it was a great experience writing the CFA Level 1 exam. I learned a lot and I am excited to continue learning. I unfortunately have to admit that there is a strong chance that I will be among the 60% of candidates who failed the exam, but I will not know for sure until the end of January. I definitely have developed a good base now on the material and believe that a re-write of the Level 1 exam will hopefully not take as much time. I will of course start studying earlier and perhaps consider to purchase a study guide. The more multiple choice practice questions, the better!
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