How Should I Study for the CFA Exam?
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"How should I study for the CFA exams?"
In my previous article, “When Should I Start Studying for the CFA® Exam?”, I outlined how a candidate should prepare for the CFA Level I, II, or III exams in June and the CFA Level I exam in December.
The most important point I raised in Part I is that you should have finished reading the curriculum readings and/or your prep provider’s materials by April 15th if studying for the June exam and October 15th if studying for the December exam.
This second article will help you understand what you should be doing from April 15th until the June exam day or from October 15th until the December exam day. If you have completed the CFAI curriculum readings or the prep provider’s materials by April 15th or October 15th, it is not time to kick back and relax. In my opinion, you have only completed 50% of the work if you are a Level I candidate, 40% of the work if you are a Level II candidate, and only 30% of the work if you are a Level III candidate that is needed to be prepared for the exam.
From April 15th or October 15th to exam day it is time for you to take practice exams, sample exams, and mock exams. Doing these exams is the key to your success on the real exam. It will be even more important in many cases than just rereading the curriculum materials.
Over the years I have seen a strong correlation (though not 100%) between the number of practice exams and sample exams a candidate completed and whether or not they passed the exam. The more practice exams you do, the higher the possibility that you will pass the CFA exam at your level. Full practice exams, sample exams, and mock exams that are in the format of the real exam (i.e., six hours with a morning and an afternoon session) are available from prep providers and CFA Institute, sometimes for free but usually at a nominal cost. For sample and mock exams from CFA Institute, registration is required; one mock exam is included for free, but practice exams cost $40 for the first use and $20 for subsequent use.
LEVELS I AND II
For Level I (June and December exams) and Level II candidates, I highly recommend that you complete a minimum of eight “full” practice, sample, and mock exams (in combination), before you sit for the exam. On April 15th, I suggest you put away your curriculum books or prep provider’s materials and take out one practice exam. Do the morning session of your first practice exam untimed so that you can get the feeling of the exam structure. Then, after you complete the morning session of this first exam, score yourself. Go over each question you got wrong first and read the answer in the answer key. Keep a tab of why you got the question wrong—is it because you made a mathematical error; is it because you read the reading passage or question stem too fast; did you transpose your answer choice incorrectly; or did you simply not know the material? That will give you an indication of whether you need to slow down, read more carefully, or simply go back to the books because you do not know the material.
After reviewing each wrong answer, I suggest going over each question you answered correctly and doing the same—record why the answers are correct. Is it because you knew the material, you guessed, or you got it right by default because you were able to eliminate one or two of the choices? To this end, the answer key can serve as a study tool so that if the question is asked in a slightly different way on another exam, you can still get it right.
After completing the morning session of your first practice exam, time each subsequent session to ensure you are completing it in the time allotted (three hours) and that you have sufficient time to go back and visit questions you missed or did not have enough time to solve or answer.
For CFA Level III candidates I also highly recommend that you complete no less than eight “full” practice, sample, and mock exams in combination before you sit for the exam in June. In addition, I would complete the past three years’ “real” CFA Level III exams that are available for free on CFA Institute’s website (candidate login required). CFA Institute publishes only the morning essay section of the last three years’ exams. Unfortunately, the afternoon section’s item sets are not released.
As a Level III candidate, I would put away my curriculum books or prep provider’s materials on April 15th and take out one practice exam. As I stated for the Level I and II candidates, do the morning essay session of the first practice exam untimed to get the feeling of the essay exam structure. Then, after you complete the morning session of this first exam, score yourself. Keep a tab of why you are losing points on each essay—is it because you did not perform the calculation correctly; is it because you read the question too fast; did you misread the question; did you provide insufficient information in your response or did you simply not know the material? This will give you an indication of whether you need to slow down, read more carefully, or simply go back to the books because you don’t know the material.
Then after you complete the morning essay session of your first practice exam you may proceed in the same manner I outlined for the CFA Level I and II candidates above.
Following these steps will help you to be better prepared on exam day!
–Nathan Ronen, CFA
Have a CFA prep question? Send it to the editor, and we will ask one of our CFA Prep Instructors. Please include your name and whether or not you are a Level I, II, or III candidate (if applicable). Questions can also be kept anonymous. O. Nathan Ronen is the lead CFA instructor at NYSSA and has helped over 20,000 candidates to pass the CFA exams. He has been teaching CFA Levels I, II, and III for over 16 years and has a unique understanding of each level. Ronen’s knowledge and real-world finance experience helps bring the theory to life. Ronen worked as a supervisory analyst training government regulators, an accounting analyst, and a corporate finance analyst. Ronen has also taught in-house CFA seminars at Goldman Sachs, Merrill Lynch, Citigroup, and many other major financial institutions. He holds an MBA in finance and accounting from the University of Chicago.