Posted by: Kaplan Schweser
Published: March 10, 2020
Are you going to take Level I of the CFA exam? If so, you might have heard all kinds of opinions about how hard it is and what you can do to pass the CFA Level I exam. This article is a practical, step-by-step guide to passing Level I of the CFA exam based on tips and guidance from Kaplan instructors and successful CFA charterholders.
The curriculum for Level I of the CFA exam covers 10 topics, each of which is weighted. The topics and weights change regularly, but these are the most recent topics and weights shared by CFA Institute in 2020:
Although the weights are variable (which means they are subject to change), you can see that the ones with the most weight are ethical and professional standards, financial reporting and analysis, equity investments, and fixed income. Make sure you are really on top of those four topics. Otherwise, it will be more difficult to pass the exam.
The format of the Level I exam is multiple-choice. There are 240 equally-weighted questions (starting in 2021, there will be only 180 questions) with a focus on investment, and each question has three answer choices. The exam is divided into a morning session and afternoon session, and each has 120 questions. Both sessions cover all of the topics according to their weights, so be prepared to answer questions about each topic in both sessions. There’s no gaming the system.
Knowing this format will help you start thinking along those lines as you study. It’s also important to remember Level I is testing your knowledge and understanding of these topics, so you need to have the concepts of each topic area down.
Level I of the CFA exam is definitely challenging. The pass rate is in the low-to-mid 40s. For example, it was 41 percent for the June 2019 exam and 42 percent for the December 2019 exam, and in the two years prior, it was around 43 percent. Don’t be discouraged by those numbers. Instead, use them to energize your preparation. If you haven’t already, you should start studying right away. Although CFA Institute recommends 300 hours, that’s really their minimum needed to pass. So, see if you can put in more. Over the years, successful candidates have told us that they studied for about 360 hours, so that’s a good goal for you.
Dedicate as much of your free time as you can to studying, and don’t let up until you walk in the door of the testing center. In short, start early and study often. Consider an exam prep package because surveys show that the pass rate for Level I is higher for those who do. For even more details, check out our article on how to make the most of your study hours.
To increase your odds of passing, you should spend up to 40 percent of your study time preparing, which involves absorbing information by reading and listening to lectures. The focus should be on the Learning Outcome Statements (LOS) from CFA Institute because they detail exactly what you are expected to do on exam day.
Level I CFA exam preparation classes can really help here, and that’s why anyone serious about passing the exam should enroll in one. These courses will go over the concepts and help you navigate the LOS. You will answer practice questions throughout these classes; however, you should also spend up to 50 percent of your self-study time on practice questions. Research studies have shown that practice is the most effective way to prepare for Level I.
CFA charterholders report that review workshops were part of their preparation strategy and helped them pass. These review workshops pull everything together, which is critical to doing well on the exam. They show you slightly different perspectives for the same topic, which can help you remember solutions to questions when you’re taking the exam.
There’s a difference between learning the material and learning how to take the exam. That’s why you should take at least one mock exam. Mock exams offer realistic simulated exam conditions that can really help you in your last weeks of studying. CFA Institute will give you one mock exam, and you can purchase others from exam prep providers like Schweser.
You can also do a six-hour, live mock exam offered by CFA societies in over 120 locations worldwide or online. These mock exams include a multimedia tutorial that will take you through each question and help you understand where the answer comes from, the calculations required, and what terms they are testing you on. This will help to fill in your knowledge gaps and give you an idea of how you should pace yourself during the actual exam.
And if you make a mistake, you can use it to your advantage. You can train your brain to recognize that this is the kind of mistake that can be made. Then, you’re less likely to repeat it. Successful CFA charterholders have told us they spent the entire last month working and reworking exams and focusing on the main issues. “I learned from mistakes,” they say.
For an in-depth look at what you need to do to increase your chance of passing the CFA Level I exam, view this video by clicking the image to get started.
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