How to Prepare an Effective CFA® Exam Study Plan
The CFA® exam is actually three exams, and each covers a lot of material. To be successful, you need to have an effective plan of action to master those concepts and be ready as you can be for exam day. These 10 tips can help you prepare your own study plan.
1. Start early and be consistent.
CFA Institute recommends 300 hours of study, and our experience is that 300 hours is the minimum that most people need to be successful. In order to put in that many hours over 6 to 9 months, you need to be putting in the time and effort every week. Don’t try to cram everything into the last few months; starting late and cramming is a recipe for failure.
2. Stick to your schedule and don’t fall behind.
Once you create your plan, be disciplined and stick to it! To provide the motivation to stay on task, take a CFA Program review course and prepare for it like a university course; read the relevant material ahead of time, get at least a big picture of the topics to be covered, and write down any questions you want to ask. Another great way to stick to your plan is to form a study group that meets on a regular basis. Studying with others who are facing the same challenge you face provides motivation and support. In addition, being able to ask questions or explain a concept to someone else helps develop your own mastery of the topics. Build the class times and study group meeting times into your schedule, and, once again, stick to it!
3. Prepare, Practice, Perform.
A very useful organizing structure for your plan is based on the three key stages of learning: Prepare, Practice, Perform. The path to success is to focus on the Learning Outcome Statements (LOS) provided by CFA Institute. These are performance-based objectives that provide detail on exactly what you are expected to be able to DO on exam day. For example, one LOS might be “Calculate and interpret Net Present Value (NPV).” The command words “calculate” and “interpret” are what you should be able to do correctly.
a. The prepare stage is when you begin to learn the basic concepts. This can be accomplished through reading and listening to or attending lectures. This stage is mostly a passive exercise of absorbing information and examples of vocabulary, theory concepts, and principles related to the LOS. In essence, the prepare stage gets you ready for the next vital stage. Before you learn how to calculate NPV, you need to know what it is and what tools you need to calculate it.
b. The second stage is practice. This is when you actually apply the knowledge from the prepare stage by working practice problems. If you are supposed to calculate NPV, the best way to learn how to do that is by doing 10 practice problems that ask you to do just that. Our experience is that most candidates spend too much time preparing and not enough time practicing.
c. The third stage is perform. This is when you simulate actual exam conditions by taking a mock exam, assessing your performance, identifying your strengths and weaknesses, and going back to do more practice where you think you need it.
As you develop your calendar, make sure you plan to spend 30 to 40% of your time preparing, 40 to 50% practicing, and 20% performing.
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4. Review regularly.
The material you learn when you begin will not stay with you until exam day if you don’t go back and revisit it once in a while. Plan to spend a few hours each week going back and reviewing material you think you’ve already mastered. Do some practice questions and, if you make any mistakes, dig into those concepts again until you know them.
5. Cover all of the material.
Don’t play the prediction game by guessing at which LOS won’t be tested and then ignoring that material. Every LOS is fair game for the exam, and you have to be ready for anything to be tested.
6. Start and end with ethics.
In general, we recommend you take all of the topics in the order presented in the CFA curriculum. However, spend just a little time on ethics at the beginning to get a big picture overview, and then really hit the topic hard in the last weeks before the exam.
7. Reserve the last month for perform.
During the last month or so before the exam, begin to take practice and mock exams in realistic settings. Take the exam on your own with no notes, and be sure to block off at least 3 hours to simulate one session. The key is to use the exams to identify how prepared you are by assessing your areas of weakness and addressing them. If you get a question wrong, note whether the issue was application of your knowledge to the question, or a fundamental lack of understanding of the concept. Keep track of your scores and look for an upward trend…by exam day, you should be scoring above 70% consistently.
8. And finally, reward yourself.
Make a plan to do something fun and relaxing on the day after the exam…golf, hiking, time with family, video games, or simply sleeping. You’ve earned it!