Overview
The CFA Program is an international professional certification program administered by the CFA Institute. It is considered to be one of the most difficult and challenging examinations in the financial services industry. The exam is broken down into three parts – Level I, Level II and Level III and the candidate must successfully pass all three parts in order to earn the CFA designation.
Part I – Analytical Section
The first part of the CFA exam is the analytical section and it is designed to test the candidate’s knowledge of investment analysis, portfolio management, and ethics. This part of the exam consists of 240 multiple-choice questions which are divided into 2 sections. The morning section (120 questions) focuses on investment tools and concepts, while the afternoon section (120 questions) consists of questions concerning portfolio management and ethics.
Part II – Quantitative Section
The second part of the CFA exam is the quantitative section which tests the candidate’s knowledge of statistics, economics, and quantitative analysis. This part of the exam consists of 100 multiple-choice questions which are divided into two sections – morning and afternoon. The morning section (50 questions) focuses on quantitative tools and concepts, while the afternoon section (50 questions) focuses on economics and statistics.
Part III – Written APV Section
The third and final part of the CFA exam is the written APV (Applied Professional Valuation) section. This part of the exam focuses on the candidate’s ability to analytically and accurately assess the value of different investments. The exam consists of 8 to 10 long-answer questions which are divided into two sections – morning and afternoon. The morning section (4 to 5 questions) focuses on valuation concepts, while the afternoon section (4 to 5 questions) focuses on company financial statement analysis.
Preparing for the Exam
Preparing for the CFA exam is a difficult process and one which requires dedication and hard work. Candidates must spend at least 250 hours of study time in order to properly prepare for the exam. It is advisable to use a study guide and supplement it with practice exams in order to gain an understanding of the various topics covered. Candidates should also attend review classes in order to properly prepare for the exam.
Studying Materials
There are various study materials available to candidates. The CFA Institute publishes its own official study guides and reviewers in order to help prepare candidates for the exam. There are also various unofficial study guides available which provide a comprehensive overview of the topics covered in the exam. These materials can also be supplemented by practice exams and online resources in order to gain a better understanding of the different topics.
Benefits of CFA Certification
The CFA certification is highly sought after by employers in the financial services industry and can lead to increased earnings and advancement opportunities. The CFA designation is a sign of professionalism and expertise in the field of finance, and many employers are willing to pay a premium for it. It is also an excellent way to network with other financial professionals.
Exam Eligibility
In order to sit for the CFA exam, a candidate must have at least a Bachelor’s degree from an accredited college or university. The CFA Institute also requires that candidates have a minimum of four years of full-time work experience in the investment management field. In addition, the CFA Institute requires that candidates pass a professional conduct exam prior to taking the CFA exam.
Final Thoughts
The CFA exam is a rigorous and challenging assessment designed to test the skills and knowledge of the candidate. It is important to be familiar with the topics and concepts covered in order to maximize the chances of success. Candidates should also prepare by studying materials, attending review classes and taking practice exams in order to gain a better understanding of the various topics covered.
