The Best Way to Study for Level I of the CFA® Exam
While everyone hears about the difficulty of Level I of the CFA® I exam, very few believe it until they experience it for themselves. To pass the exam, you will need to achieve at least the minimum passing score (MPS) set by the Board of Governors of CFA Institute after each exam. The historical Level I pass rate is only 43%, and the February 2021 pass rate was only slightly higher at 44%. People who are studying for the CFA exam are smart, driven, and want to pass just as much as you do. That means it is crucial that you have a study plan and adhere to it.
We asked over 100 of our former CFA Program students, who are now charterholders, what advice they have for candidates just getting started in their studies. We compiled some of their advice for this article to help you figure out the best way to study for the Level I exam.
Get into a Study Routine Early
Many successful CFA charterholders credit their study routine for their success taking the CFA exams. Not only do you need to study the material, but you also need to be able to apply what you learned to scenarios on the exam. This level of understanding and practical application takes time to develop. Therefore, it is crucial that you get into a study routine early and stick to it.
We recommend following the Prepare > Practice > Perform® method of studying. In the prepare stage, you absorb information through reading and listening to lectures. In the practice stage, you start working through practice problems. In the perform stage, you simulate exam conditions to assess your level of readiness.
As you develop your study plan, we typically advise spending:
- 30–40% of your time preparing
- 40–50% practicing
- 20% performing
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Focus on the Exam Weights and Learning Outcome Statements
You should have a solid understanding of the CFA Program curriculum and how each topic is weighted for the Level I exam. The curriculum is updated every exam cycle, and all three levels of the exam focus on the same core topic areas. Exam weights vary by level and can change slightly from year-to-year, so it is good to be clear on what the weights are for the exam you are taking.
The Learning Outcome Statements (LOS) and core concepts are built from the Candidate Body of Knowledge, developed by CFA Institute. They have devised study sessions and LOS to help candidates figure what should be gained from each reading. Be sure to develop your study plan around these, as they will help you focus on the right topics for the exam.
Apply Concepts to Real Situations
Just knowing the material isn’t enough to pass the CFA exam. You must be able to take the knowledge and apply it to realistic situations. Most questions are not asking you to regurgitate memorized material. They are asking you to use problem-solving skills and apply knowledge to situations you may encounter on the job.
Many CFA charterholders advise you to always tie back what you are learning to the real world. Saqib Baig, CFA, recommends, “As you are going through the learning outcomes, keep asking yourself questions as to why you are learning this and how you are going to use this in your work.” The more you can make the study material real to you, the easier it will be to remember it.
Learn How to Take the Exam
There’s a difference between learning the material and learning how to take the exam. Be sure you practice taking the exam in realistic simulated exam conditions in the last four weeks of studying. CFA Institute will give you one mock exam, and you can purchase others with exam prep providers like Schweser. The Schweser Online Mock Exam includes an exam sim mode that uses the same interface as the actual computer-based exam. It also includes a multimedia tutorial that takes you through each question and helps you understand where the answer comes from, the calculations required, and what terms they are testing you on. This helps to fill in your knowledge gaps and give you an idea of how you should pace yourself during the actual exam.
Following these tips will ensure you are as prepared as possible for Level I of the CFA exam. Now that you know the best way to study, learn how to prepare an effective CFA Program study plan and pass the CFA Level I exam.
Looking for more guidance on how to prepare for Level I of the CFA® exam? Enroll in one of our CFA Level I Premium or PremiumPlus study packages to receive expert instruction, CFA Program study materials, and more. Give yourself the best chance to prepare, practice, and perform on the CFA exam.