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04/29/2013

A “Calculating” Tip for Level I and II Candidates


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CFA Exam Prep

If you have cracked open an exam curriculum book (or clicked open the e-book version), then you are familiar with the structure of the curriculum. You know that topics are divided into study sessions, assigned readings accompany study sessions, and learning outcome statements – or LOSs – are developed for each reading. I’m not really telling you anything new here.

Command Central

According to CFA Institute, these reading-specific LOSs are carefully designed to indicate what candidates should learn from each reading. An important component in each LOS is the command word (or words) contained in the statement. 

The CFA exam® curriculum contains 30 official command words such as “analyze” and “compare.” (The complete command word list can be found on the CFA Institute website.) These command words tell you exactly what you need to do know – and more importantly – HOW you need to apply that knowledge on the exam. 

As I said, none of this should be earth-shattering news to you.

But are you using this structure to your benefit in your approach to studying for the exam?

Calculate

Here is one example of how to use command words to your advantage. R. Brock McDonald, CFA, a Level II instructor in the CFASF Review program, suggests that in the final push before the exam one thing you should do is focus on the LOSs that contain the command word "Calculate." In a previous blog, I said that regardless of how you conceptualize the formulas, there is no substitute for actually putting pencil to paper. You must do many calculations with actual numbers to ensure you really know how to use the formulas. Practice makes perfect.

Start by identifying the LOSs that contain this command word and then focus your efforts on honing your calculation skills.

In the spirit of this command word, I did a little calculating and found that, at Level I, this command word is used 107 times in the 2013 curriculum. It is found 84 times in the Level II material. (As you might suspect it is used minimally at Level III – only 12 times – as the focus of the Level III exam is on synthesis of knowledge, not application and analysis.) Below is a chart showing the number of occurrences by study session for Levels I and II. This will give you starting point on where to look for these ‘calculating’ LOSs. 

Study Session
Level I
Level II
1
0
0
2
18
0
3
10
12
4
11
5
5
2
0
6
4
5
7
0
0
8
7
3
9
9
4
10
0
2
11
13
7
12
5
15
13
3
6
14
4
6
15
3
1
16
11
3
17
6
8
18
1
7

You can find additional tips about formulas in my blog post, “The Formula to Approaching CFA Level II Formulas.” Don’t let the name throw you. Level I candidates can benefit from this information, too.

One last thing: Scan that list of command words and see if any of them represent weak areas for you. If so, identify their corresponding LOS and come up with a plan to tackle them.

Now get out your calculator, paper, and pencil and start calculating! 

–Linda Lam

Linda Lam has worked with a candidate review program since 2000.

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