The Student Room Group

Some CFA Level 1 questions

So I want to do the CFA Level 1 in December but I've got a few queries that I hope someone who has done this stage can advise me on:

They say that you should do 300h of study but the pass rates are just 40%. So basically tons of work and a low pass rate but I'm wondering if there are factors that should make me take this data with a pinch of salt?

- The 300h: is this meant for someone with no prior knowledge of finance? As in thats what they “recommend” to learn everything from scratch? How much of a difference does it make if you do know a thing or two about finance? I’m currently doing the ACA (audit trainee at Big 4) and also did a finance degree at university so at first glance, I think I’ve seen pretty most of this material before to some extent or another (the accounting stuff in a lot of detail as I deal with this at work on a daily basis). Would someone of that kind of a background have an easier time with it?

- What are the causes for the low pass rates? I’ve heard of the following reasons:
o People who register for it but don’t take it seroiusly, put in almost no effort into studying
o People who don’t have enough time to study due to working in an industry where very long hours are the norm
o People from non financial backgrounds taking the exam and having trouble understanding it all
o People who have trouble with English taking the exam and not quite understanding everything

My plan is to do low key studying throughout the year until then and get familiar with the material. Then before the exam I’ve got 10 days off when I plan to go all out and study like hell. Do you think this sounds like a feasible approach?

Thanks for your help
300h + or - 50h is the golden number, though if you have a masters in finance or something then obviously most of the material will be familiar and you may only need 250h.

Being an ACA just means you will have an easier time in FR&A. I hated that stuff because I have no accounting background whatsoever, learning IFRS and GAAP was nightmare for me. Don't take the fact you may have an easy ride FR&A as a guarantee you need to do less hours, Ethics is very difficult and may take you some time to understand how to answer the questions.

Your plan is ok, I would still aim to be doing EOC questions and one or two practice papers at least a month before the exam. That why you know your weak areas and still have some time to work on them.

Edit: I forgot, pass rates are due to the reasons you listed. It's also all the prestige chasing indians in Mumbai who think it's their golden ticket out of IT/back office yet don't understand simple things like difference between warrants and call options.
(edited 9 years ago)
Reply 2
If you do 300 hours of effective study you will pass. The key is to be an efficient student and therefore for Level 1 at least you should be able to pass with less study if it is targeted correctly. Focus on the low hanging fruit, FRA, Ethics, Equity & Fixed Income, don't be that guy that reads the Economics book cover to cover as it is only a maximum of 10% and it will be a waste of precious time.

Your background will certainly help you get up to speed on the accountancy portions not only in FRA but it also appears in Corporate Finance. However don't expect just to wing it, there are patterns to the questions and practice will be important so that can get to the point quickly.

Regarding pass rates, broadly speaking you are correct (the guy next to me at level 1 turned up with no pencil), also it is worth noting that 40% is the global pass rate. Anecdotally I've heard that pass rates in London are significantly higher.

Level 2 is much the same as Level 1. There is less material overall but on average it is more tricky and there a lot of formulas which you are required to memorise. Level 3 is however quite significantly different from the other two, with more thinking required during the study process (rather than just trying to absorb the vast syllabus as is done at 1 & 2) and so it presents a different challenge.
(edited 9 years ago)
300 hours was more than enough for me, but everyone studies differently.
Reply 4
Original post by VinceSamios
300 hours was more than enough for me, but everyone studies differently.


Was randomly browsing this thread and was amazed that you had resurrected my ancient thread.

I sat and passed Level 1 in December, probably did about 200h of studying. But this was hugely helped by my ACA as well as undegrad finance degree.

I wrote up a detailed guide to the CFA Level 1 that I posted on some other forums so thought I might as well share it here too. Beware of wall of text:


Just found out earlier today that I passed the December 2014 sitting of the CFA exam so I thought I'd share what I had learned in the processes and what my thoughts are on what one needs to do to pass. Posts just like these on message boards around the internet gave me a lot of valuable advice so I thought I'd pass on the favor.

I don't aspire to any absolute truth or saying that this is by any means the only way. What I did was an approach, not the approach.

First off I have to say that I had probably the one of the best backgrounds possible for going into the CFA exam as I had seen so much of the material before. I studied finance in university, with modules also in economics and quantitative methods. I worked briefly as a financial analyst in industry having seen capital budgeting/NPV calculations first hand. I'm now an auditor (hopefully not for much longer) at a Big Four and had 14 out of the 15 ACA exams under my belt when I walked into the exam room in December, meaning that I could do accounting backwards, forwards and sideways.

The only things I hadn't really seen were Ethics obviously (though having done a lot of ethics as part of my ACA, I didn't find it too challenging), statistics and bits and pieces from the other topics as well.

All this meant that studying was in some parts just refreshing my memory and not really brand new facts. Even on exam day I recall there was a question that I didn't recall from the readings but I could hear the voice of my university professor in my head and that helped me work out the answer. I don't wish to discourage anyone with a non-financial background but I can't overemphasize how much a relevant background helped me.

So how did I prepare?
I registered in late June/early July or thereabouts. It was around then that I also started reading through the Schweser notes. I didn't read everything in detail and I did not do the end of chapter questions at that point. It was more to get familiarized with the material. In some places where I felt more confident I just read the chapter summary and the accountancy sections I pretty much skipped altogether. I read the Schweser notes only once. Also did a bit of the CFAI materials end of chapter questions. I would not read the CFAI books as such since unless you have a lot of time to kill, they take up too much time. Schweser delivers the same material in half the amount of pages.
Following that my accountancy exams started picking up as I was sitting the Technical Integration papers of the ACA in early November. As such I shelved the CFA books until that was over. Come the 4th of November I sat my last ACA exam and that's when high gear kicked in.

I had taken 3 weeks off work before the exam (not all consecutive, but that was the gross total) so that I could concentrate purely on my studies. I started off with the CFAI books and did ALL the end of chapter questions (EOCs) from them. I did very few Schweser end of chapter questions as I found them to be (later proved to be correct when I sat the exam) much more long winded and not as direct.
The way in which I did the questions and which I think is good for learning the concepts is to look at the answer straight away after doing it yourself, instead of running through a set of questions and then reviewing the answers. That way the concept being questioned was still fresh in my mind and I could learn it immediately.
After I had done all the end of chapter questions, I moved on to the Schweser mocks of which there were 6. I started working through them in the exact same way I did with the EOCs: did the question and looked at the answer immediately. This is where I also introduced a new thing: I started taking notes of the things I got wrong and organized these via topic. I wrote down the concept that I didn't know when I got the question wrong and then later went back to review these. I did not do the Schweser exams to time, generally was doing one a day when studying. I also had a formula sheet on hand all the time, I think the Schweser one is pretty good. I would refer to this continuously to help drill those formulas into my head. At this time I saw no point in testing my memory of formulas, I was there to learn and as such I did the exams essentially open book.

Speaking of formulas: there wasn't actually all that much calculating that needed to be done in the exam. Some formula collections might look dauntingly long but in fact there are just a few key ones you need to know and much of the rest are just common sense or derivations of one another.

Once I had done all the Schweser mocks, I had a look at the topics I was weakest in (based on the notes I took) and used the Schweser Question Bank to really drill those down. The QB questions are quite simplistic, even simpler than the real exam in some cases, but they are good for learning specific concepts as you can drill down by learning outcome statement/topic to find the very thing you need.
I then did the questions on the CFAI website that are provided to you when you join up. Here the answers are presented only at the end so I reviewed them then. Again making notes of what I didn't understand.

Once that was done I moved on to prior year CFAI mocks. I later realized that this was a slight error as many questions repeat themselves so if you want to sit the most recent mocks fresh (you are provided 2 through the CFAI website when you sign up) then better leave those for later. Again I did these not to time and looking at the answer straight away after as well as making notes of concepts I missed.

Once all that was done, I finally did the CFAI mocks that I got when I signed up. These two were the only ones I did to time, under exam conditions and without looking at my formula sheet/notes I made. These I did on the Monday-Tuesday before the Saturday exam. Once that was done, I spent the last few days just reviewing the answers to all the CFAI mocks, looking through my notes as well as the formula sheet.

I think the CFAI mocks (more so than the CFAI EOCs) were the very best representation in terms of style and difficulty for the real exam. The questions are very straight forward and there was nothing tricky. I finished both the AM and PM sessions in about half the time allocated. I didn't study much during the break, just ate, relaxed and talked to a few guys I knew who I randomly ran into at the exam hall (took this in London so finding them out of 4k or so candidates was quite the fluke). Although you must focus and work fast, I can't say the exam felt too time pressured. Very few questions were ones where you needed to do longer calculations. Many could be answered within 15 seconds. But do go back and review what you have put down.

General tips:
When answering the questions, make sure you read carefully what they're asking you. Make sure you pay attention whether the questions says most or least likely. I got so many answers wrong in my mocks because I read it the wrong way around, not because I didn't understand the concept. Also try and eliminate answers that are clearly incorrect so you're left with the more reasonable ones and a higher chance of getting it right.

Know your calculator well. I went tor the Texas Instruments one. Once you get the hang of it, all those time value of money questions will be some of the easiest points you can get.

Always keep your eye on the topic weightings posted on the CFAI website. Use this as your guide when allocating time to different topics. There are only 8 Alternative Investments questions so no need to go nuts over such a small area.
Do not, I repeat do not get bogged down by any one particular concept you don't get. Read it again and if it doesn't help, just flat out memorize it. If that doesn't help then just move on. They say Level 1 is a mile wide but an inch deep and it is very true: you need to know a lot of topics but on a very superficial level. Don't get some small thing? No worries, chances are it might not come up anyway and if it does, just take your chances.

They say 300h is the magic number of study time to aim for but I think that is only really relevant if finance is new to you and you've not even seen an income statement before (in which case it might take even more than that). If you come from a relevant background then it's really not that bad at all. For those final three weeks of preparation I was probably starting at around 9:30 and finishing at around 7:30 or so, plus gym trips and meals in between. I worked hard but I can't say I was slaving away or doing all nighters. If I had to guess, I'd say my study time was in the 150-200h range, give or take, but I really didn't count. The last few days before the exam I was taking it easier and not trying to stress myself out.

However as emphasized before I could not under any circumstances have pulled this off like this if I did not have a relevant background to help me. FRA, the biggest topic, was a relative breeze for me coming from a background of chartered accountancy.
I'm happy to answer any questions anyone might have. Best of luck to all candidates,
Original post by snakesnake
Was randomly browsing this thread and was amazed that you had resurrected my ancient thread.

I sat and passed Level 1 in December, probably did about 200h of studying. But this was hugely helped by my ACA as well as undegrad finance degree.

I wrote up a detailed guide to the CFA Level 1 that I posted on some other forums so thought I might as well share it here too. Beware of wall of text:


Just found out earlier today that I passed the December 2014 sitting of the CFA exam so I thought I'd share what I had learned in the processes and what my thoughts are on what one needs to do to pass. Posts just like these on message boards around the internet gave me a lot of valuable advice so I thought I'd pass on the favor.

I don't aspire to any absolute truth or saying that this is by any means the only way. What I did was an approach, not the approach.

First off I have to say that I had probably the one of the best backgrounds possible for going into the CFA exam as I had seen so much of the material before. I studied finance in university, with modules also in economics and quantitative methods. I worked briefly as a financial analyst in industry having seen capital budgeting/NPV calculations first hand. I'm now an auditor (hopefully not for much longer) at a Big Four and had 14 out of the 15 ACA exams under my belt when I walked into the exam room in December, meaning that I could do accounting backwards, forwards and sideways.

The only things I hadn't really seen were Ethics obviously (though having done a lot of ethics as part of my ACA, I didn't find it too challenging), statistics and bits and pieces from the other topics as well.

All this meant that studying was in some parts just refreshing my memory and not really brand new facts. Even on exam day I recall there was a question that I didn't recall from the readings but I could hear the voice of my university professor in my head and that helped me work out the answer. I don't wish to discourage anyone with a non-financial background but I can't overemphasize how much a relevant background helped me.

So how did I prepare?
I registered in late June/early July or thereabouts. It was around then that I also started reading through the Schweser notes. I didn't read everything in detail and I did not do the end of chapter questions at that point. It was more to get familiarized with the material. In some places where I felt more confident I just read the chapter summary and the accountancy sections I pretty much skipped altogether. I read the Schweser notes only once. Also did a bit of the CFAI materials end of chapter questions. I would not read the CFAI books as such since unless you have a lot of time to kill, they take up too much time. Schweser delivers the same material in half the amount of pages.
Following that my accountancy exams started picking up as I was sitting the Technical Integration papers of the ACA in early November. As such I shelved the CFA books until that was over. Come the 4th of November I sat my last ACA exam and that's when high gear kicked in.

I had taken 3 weeks off work before the exam (not all consecutive, but that was the gross total) so that I could concentrate purely on my studies. I started off with the CFAI books and did ALL the end of chapter questions (EOCs) from them. I did very few Schweser end of chapter questions as I found them to be (later proved to be correct when I sat the exam) much more long winded and not as direct.
The way in which I did the questions and which I think is good for learning the concepts is to look at the answer straight away after doing it yourself, instead of running through a set of questions and then reviewing the answers. That way the concept being questioned was still fresh in my mind and I could learn it immediately.
After I had done all the end of chapter questions, I moved on to the Schweser mocks of which there were 6. I started working through them in the exact same way I did with the EOCs: did the question and looked at the answer immediately. This is where I also introduced a new thing: I started taking notes of the things I got wrong and organized these via topic. I wrote down the concept that I didn't know when I got the question wrong and then later went back to review these. I did not do the Schweser exams to time, generally was doing one a day when studying. I also had a formula sheet on hand all the time, I think the Schweser one is pretty good. I would refer to this continuously to help drill those formulas into my head. At this time I saw no point in testing my memory of formulas, I was there to learn and as such I did the exams essentially open book.

Speaking of formulas: there wasn't actually all that much calculating that needed to be done in the exam. Some formula collections might look dauntingly long but in fact there are just a few key ones you need to know and much of the rest are just common sense or derivations of one another.

Once I had done all the Schweser mocks, I had a look at the topics I was weakest in (based on the notes I took) and used the Schweser Question Bank to really drill those down. The QB questions are quite simplistic, even simpler than the real exam in some cases, but they are good for learning specific concepts as you can drill down by learning outcome statement/topic to find the very thing you need.
I then did the questions on the CFAI website that are provided to you when you join up. Here the answers are presented only at the end so I reviewed them then. Again making notes of what I didn't understand.

Once that was done I moved on to prior year CFAI mocks. I later realized that this was a slight error as many questions repeat themselves so if you want to sit the most recent mocks fresh (you are provided 2 through the CFAI website when you sign up) then better leave those for later. Again I did these not to time and looking at the answer straight away after as well as making notes of concepts I missed.

Once all that was done, I finally did the CFAI mocks that I got when I signed up. These two were the only ones I did to time, under exam conditions and without looking at my formula sheet/notes I made. These I did on the Monday-Tuesday before the Saturday exam. Once that was done, I spent the last few days just reviewing the answers to all the CFAI mocks, looking through my notes as well as the formula sheet.

I think the CFAI mocks (more so than the CFAI EOCs) were the very best representation in terms of style and difficulty for the real exam. The questions are very straight forward and there was nothing tricky. I finished both the AM and PM sessions in about half the time allocated. I didn't study much during the break, just ate, relaxed and talked to a few guys I knew who I randomly ran into at the exam hall (took this in London so finding them out of 4k or so candidates was quite the fluke). Although you must focus and work fast, I can't say the exam felt too time pressured. Very few questions were ones where you needed to do longer calculations. Many could be answered within 15 seconds. But do go back and review what you have put down.

General tips:
When answering the questions, make sure you read carefully what they're asking you. Make sure you pay attention whether the questions says most or least likely. I got so many answers wrong in my mocks because I read it the wrong way around, not because I didn't understand the concept. Also try and eliminate answers that are clearly incorrect so you're left with the more reasonable ones and a higher chance of getting it right.

Know your calculator well. I went tor the Texas Instruments one. Once you get the hang of it, all those time value of money questions will be some of the easiest points you can get.

Always keep your eye on the topic weightings posted on the CFAI website. Use this as your guide when allocating time to different topics. There are only 8 Alternative Investments questions so no need to go nuts over such a small area.
Do not, I repeat do not get bogged down by any one particular concept you don't get. Read it again and if it doesn't help, just flat out memorize it. If that doesn't help then just move on. They say Level 1 is a mile wide but an inch deep and it is very true: you need to know a lot of topics but on a very superficial level. Don't get some small thing? No worries, chances are it might not come up anyway and if it does, just take your chances.

They say 300h is the magic number of study time to aim for but I think that is only really relevant if finance is new to you and you've not even seen an income statement before (in which case it might take even more than that). If you come from a relevant background then it's really not that bad at all. For those final three weeks of preparation I was probably starting at around 9:30 and finishing at around 7:30 or so, plus gym trips and meals in between. I worked hard but I can't say I was slaving away or doing all nighters. If I had to guess, I'd say my study time was in the 150-200h range, give or take, but I really didn't count. The last few days before the exam I was taking it easier and not trying to stress myself out.

However as emphasized before I could not under any circumstances have pulled this off like this if I did not have a relevant background to help me. FRA, the biggest topic, was a relative breeze for me coming from a background of chartered accountancy.
I'm happy to answer any questions anyone might have. Best of luck to all candidates,


Brilliant Post. In fact one of the best I've read on TSR.

I have CFA Level 1 coming up this June. I got started pretty late and so far I've covered FRA, Equity, Fixed Income and Quants - so about 50% of the course. That includes reading the schweser notes, doing all end of chapter questions in the schweser books and a few hundred questions on qbank for each topic.

I have 2 straight weeks off work before the exam. I plan to have covered all the schweser notes and qbank questions for all topics by then, and will spend those two weeks doing all CFAI EOC questions and Mocks. Do you think this is a reasonable plan?

I'm in a similar situation to yourself in that I have seen most of the material before (except for FRA, so that took quite a bit of time....).

I'm also considering leaving out Economics completely? At this point the time required to cover it doesn't seem worth it.....what's your thoughts on this?

Anybody else on TSR got Level 1 this June?
Reply 6
Original post by BillGross
Brilliant Post. In fact one of the best I've read on TSR.

I have CFA Level 1 coming up this June. I got started pretty late and so far I've covered FRA, Equity, Fixed Income and Quants - so about 50% of the course. That includes reading the schweser notes, doing all end of chapter questions in the schweser books and a few hundred questions on qbank for each topic.

I have 2 straight weeks off work before the exam. I plan to have covered all the schweser notes and qbank questions for all topics by then, and will spend those two weeks doing all CFAI EOC questions and Mocks. Do you think this is a reasonable plan?

I'm in a similar situation to yourself in that I have seen most of the material before (except for FRA, so that took quite a bit of time....).

I'm also considering leaving out Economics completely? At this point the time required to cover it doesn't seem worth it.....what's your thoughts on this?

Anybody else on TSR got Level 1 this June?

Thanks, glad it was useful. I think what you've got there is quite reasonable, the two weeks should suffice to get your head around the last bits of the material.

Leaving out economics completely.....not such a good idea. I don't know exactly how the marking is done (the CFA institute keeps the details closely guarded) so I'm not sure how much a total failure there can be helped by good performances in other areas. I'd say read some notes on it and do questions and then read the answers to the questions. You might not get everything but you'll have some understanding of the subject.

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