Financial advisors everywhere want the title of ‘chartered financial analyst’, but it is not easy to pass the CFA test. Passing the CFA test is indeed quite difficult. It is important to mention the fact that less than half of the people who take the CFA test even pass the first level. There are three total levels of the exam, so this gives you an idea about the test’s difficulty. You should also be aware that you have to have a total of 4,000 hours of experience working professionally over at least 36 months to get the ‘chartered financial analyst’ title.
The CFA Institute website lists the topic areas for the exam. A few of these topic areas include economics, accounting, and statistics. The major classes of assets also have topic areas and the CFA Institute website lists those, as well.
Learn More About The Test’s Levels
Level 1 is all about the foundational information that you need to succeed as a financial analyst. It is also important to point out that Level 1 has multiple-choice questions. The topics discussed in the exam change from time to time. One recent addition is about environmental, governance, and social issues. You have to apply your knowledge via analysis at Level 2.
You can see this in the fact that Level 2 contains item sets, another term for small case studies after which there are between four and six multiple-choice questions. Level 3 presents you with real-world decisions. At Level 3 of the CFA exam, you are required to write out all of your answers to the questions.
What Are the Pass Rates for the CFA Exam?
Candidates often retake one level or even several levels. The pass rate for Level 1 is 45-50% and the Level 2 pass rate is a little bit higher than that of Level 1. The pass rate for Level 3 is somewhat higher than the pass rate for Level 2. It is relevant to note that Level 3’s pass rate does have somewhat of a bias effect. This is due to the simple fact that the candidates in this case have passed Level 1 and Level 2 already.
Preparing for the CFA Exam
It is critical to prepare properly for the CFA exam. You can check out the CFA Institute’s website to prepare and their website even has practice questions. You can also contact any CFA societies near you or even utilize third-party programs to help you study for the exam. The amount of time you need to study depends on your education as well as what role you have in the investment industry. Candidates spend a minimum of 300 hours studying per level, as a general rule.
How you prepare is up to you, but practice tests can help you study for the exam. Several prominent figures in the investment industry, including Derek Burkett, who is the Vice President of Advanced Designations at Kaplar Schweser, recommend that you should take practice tests. These practice tests can make it easier for you to understand the math formulas and when you should use these formulas. You can also take CFA prep courses and this CFA offer code can make it easier for you to do that.
Changes to the CFA Exam Due to COVID-19
The CFA Institute decided to delay test days in 2020 due to the COVID-19 pandemic. The CFA exam is shorter, at four and a half hours long, and it is also computerized. You will also notice that the CFA exam contains fewer multiple-choice questions, as well. The CFA Institute decreased the number of multiple-choice questions because they felt 180 multiple-choice questions were enough to figure out if the candidate knows the content.
