The Chartered Financial Analyst (CFA) Charter is obtained by those who have passed all three levels of the CFA Exam process and completed the required work experience. The Exams test the knowledge of CFA candidates on many topics, including wealth planning, asset valuation, risk management, and portfolio management. Typically, CFA candidates have finance, accounting, business, and economics backgrounds, but a financial background is not required to pursue the Charter.
Passing all CFA Exam levels is challenging and requires a dedication to studying for a few years. How you prepare for each Exam might determine whether or not you truly understood the concepts tested or merely memorized the information on exam day. Let’s explore the benefits of studying to understand the CFA Exam versus memorizing to pass.
Memory Recall
Memorization is the ability to learn singular facts through conscious efforts. Memorizing is an excellent way to remember information for short-term recall and in fast-paced environments. Using memory recall is a valuable skill in many settings, especially when working in high-stress situations. Recent studies have shown that memory recall is vital for long-term learning since every time memory is retrieved, it becomes more accessible for future scenarios.
Memory recall also helps CFA candidates create comprehensible and integrated mental portrayals of structured concepts, which is critical to solving new problems and drawing new inferences.
Comprehension
When CFA candidates can understand concepts to the extent that they could teach the material to someone else, they will have achieved true comprehension. Comprehension means long-term understanding because you’re figuring out connections between ideas, why they work together, and why things happen the way they do.
Once you comprehend information, you will have a deeper understanding of the material you’re trying to learn for better recall on exam day. Fully understanding complex information and ideas builds confidence in your knowledge when sitting for the CFA Exam.
The best way to approach comprehending a topic is to ask yourself, “Why does this matter, and why is it important for me to comprehend?” When you’re able to answer “why,” you’ll be able to approach the CFA Exam with a deeper understanding of the material.
The Best of Both Worlds: Active Learning
Active learning and recall is an essential and powerful learning process that combines memory retrieval with comprehension. Active learning is an excellent learning technique to boost memory retention when studying for the CFA Exam. There are several steps in the active-learning process, including learning by doing, focused learning, and simplified learning.
- Learning by doing involves repetition to master difficult concepts; for example, doing practice questions to familiarize yourself with the CFA Exam test-taking process and topics tested until mastery is achieved.
- Focused learning lets you hone in on the most relevant topics you need to know and target the more challenging areas within your study plan. When you focus on what is most important to learn, you can study more efficiently and prevent burnout.
- Finally, simplified learning is taking complex ideas and breaking them down into more manageable and concise sections so that you can absorb and understand more information. Once you truly understand the subjects, you can use memory tools to recall what you both understand and remember.
Active learning is a participatory study method that allows CFA candidates to engage fully with their study materials instead of passively reviewing the information. By incorporating active learning into their CFA studies, candidates can absorb more of the material faster and obtain the confidence they need to pass the CFA Exam.
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