As a CFA exam candidate, your goal is likely to pass your upcoming exam. Whether you are pursuing the CFA charter soon after completing your undergraduate program or sitting for your exams as a working professional, you need the mindset, proven methods, and essential study tools that will help you do your best. While passing each level of the CFA Program exam is a challenge, your study journey doesn’t have to feel impossible! Read on below for tips on how to boost your chances of earning a passing score.
General Tips You Can’t Miss While Taking the CFA Exam
With the average 10-year pass rate for the CFA exam hovering around 44%, it is no surprise that first-time and veteran candidates worry about doing well on exam day. Yet you are likely considering the exam because, like many others, you understand that the CFA designation is the gold standard for investment professionals worldwide. Charterholders enjoy increased career prospects, higher salaries, and greater job stability. No matter your motivation to pursue the CFA charter, there are steps you can take to boost your chances of success when exam day arrives.
Craft an Effective CFA Exam Study Plan
One of the most essential steps in preparing for the CFA exam is to develop a study plan. This should include a timeline for each study session, regular practice exams, and a review of your progress. CFA Institute (CFAI®) recommends that candidates spend at least 300 hours of study time for each exam level. You may want to break this down into smaller, more manageable study sessions to keep yourself motivated and on track.
Daily Flashcards and QBank Techniques Deliver Results
Once you develop your study plan, it is time to introduce effective methods for learning, synthesizing, and applying essential CFA exam material. A great way to build a foundation for your exam success is the use of spaced repetition, or the process of reviewing test content in systematic, planned intervals instead of a mass cramming session.
Digital flashcards with spaced repetition technology help you commit key CFA exam content to memory by showing you difficult concepts over a longer period of time–once every day for a month vs. several times during a single hour, for example.
When you combine the power of digital flashcard review with answering questions daily from a QBank that mirrors the real CFA exam, you’ll have the knowledge, recall ability, and test-taking skills to optimize for success on exam day.
Practice Active Learning Strategies
One of the most effective ways to prepare for the CFA exam is to practice active learning strategies. This includes taking notes, creating flashcards, and applying your knowledge through answering challenging practice questions.
UWorld’s platform encourages and leverages this active engagement from learners by presenting them with interactive questions and simulations that require thoughtful analysis and application of knowledge. Through case-based scenarios, problem-solving exercises, and interactive learning tools, UWorld Prep fosters active learning by prompting learners to think, analyze, and apply their understanding of the subject matter. This approach helps students develop critical thinking skills, reinforce their knowledge, and improve their exam readiness. By engaging with the content and actively participating in the learning process, students can enhance their understanding and retention of the material, leading to better outcomes in their exam preparation.
Time Is Your Ally So Manage It Effectively
All three levels of the CFA exam are timed, so it is essential to manage your time effectively and efficiently. Especially if you are preparing for the CFA exam while working, ensure you understand how much time you have for each section and pace yourself accordingly. This may involve waking up early or dedicating weekends and evenings to study. It is also important to allocate breaks and rest periods to avoid burnout. If You find yourself getting stuck on a question, move on and come back to it later.
Embrace the Wide Range of Knowledge in the CFA Exam
Many CFA exam candidates make the mistake of thinking they can study for fewer than the 300 recommended hours or that they don’t have to study a topic if they already work in that area. The CFA exam covers a lot of material and may even address concepts in your current work that you’ve never heard of.
To avoid any surprises on exam day, make sure you study for at least the recommended number of hours, and review lessons and sections even if you feel you already have a strong understanding of those areas.
The Key Role of a Supportive Network
It is easy to get discouraged when studying for the CFA exam, especially if you’ve taken (and failed) it before. A practical way to remain positive and stay motivated on your CFA exam journey is to remember why you are working so hard to accomplish your career goal. Envision how your life will be once you obtain your CFA charter. Consider the advantages you’ll gain once you have passed all three exam levels. Talking with other charterholders or CFA exam candidates can be enormously helpful in keeping your eye on the prize.
Seek Out Exam Tips from Top-Scoring Candidates
If you’re among the ambitious cohort striving to obtain a coveted CFA designation, we have some more uplifting tips to aid you as you embark on your CFA exam prep journey. Read on below for additional advice from triumphant CFA exam candidates who have successfully passed all three exam levels. You never know how they may motivate you, inspire you, or steer you in the right direction!
Utilize CFA Study Materials and Resources
CFAI provides candidates with a wealth of study materials and resources, including textbooks, online videos, practice exams, and more. Make sure you take advantage of these resources and use them to supplement your study plan. You may also consider purchasing additional study materials from third-party providers to help you prepare. Many prep providers have free trials, just like UWorld has for Level 1 and Level 2.
Network with CFA Charterholders and Peers
Connecting with other CFA exam candidates and charterholders can be a valuable source of support and motivation. Join study groups or online forums to connect with others preparing for the exam. Consider attending local CFA Society events to meet other professionals in the industry.
Review Exam-Taking Strategies for Exam Day
Regarding exam-taking strategies for the CFA exam, it is crucial to approach the test with a well-thought-out plan. Here are some key points to consider:
- Develop a time management strategy: Since the CFA exam is timed, it is crucial to allocate your time wisely. Determine how much time you should spend on each section and question to ensure you have enough time to complete the entire exam.
- Read questions carefully: Pay attention to the wording and details of each question. Sometimes, answers may contain subtle differences, so it’s crucial to understand the nuances to select the correct response.
- Prioritize questions: If you encounter challenging questions, stay calm. Move on to the next question and return to the difficult ones later. Prioritize questions that carry more weight or seem more straightforward to answer initially.
- Manage your stress and stay focused: The CFA exam can be demanding and stressful. Practice relaxation techniques, such as deep breathing or positive visualization, to help manage your stress levels. Stay focused and maintain a clear mindset throughout the exam.
- Utilize your scratch paper: Use the provided scratch paper to jot down formulas, make calculations, or sketch diagrams. This can help you organize your thoughts and make the problem-solving process more efficient.
- Review your answers: If time permits, review your answers before submitting the exam. Double-check for any errors or mistakes you may have made. Be cautious about making last-minute changes only if you are confident in your decision.
The Actual Formulas for Success
The Level 1 CFA exam requires candidates to memorize several formulas, and each formula is essential. However, you must know only a few formulas by heart before sitting for the exam. According to the BrainHack website, those formulas include:
- Cash Conversion Cycle
- The CAPM
- Weighted Average Cost of Capital
- DuPont and Extended DuPont Analysis
- Arithmetic, Geometric, and Harmonic Means
- Variance and Standard Deviation
- Z-Score
- Convexity (and Duration)
- Put-Call Parity
By memorizing the most important formulas for your CFA exam, you will set yourself up for success on exam day.
Master Your Calculator Skills
A critical part of CFA exam preparation involves deciding between CFAI-approved calculators. The approved calculators have some similarities, but differ significantly in operation–so choosing the right version for you simply comes down to personal preference. You must choose between the following calculators: CFAI approves the use of only the following calculators:
- Texas Instruments BA II Plus (including BA II Plus Professional)
- Hewlett Packard 12C (including the HP 12C 25th anniversary edition, the HP 12C 30th anniversary edition, and the HP 12C Platinum)
It is wise to spend ample time working with your calculator so that when exam day arrives, you’re fully prepared to work through any number-crunching problem you encounter.
Dedicate Your Final Month to Comprehensive Practice Exams
Practice exams are critical to your CFA exam success. Taking multiple practice exams is an effective method to develop the mental and physical stamina necessary to perform on exam day. You will also get a feel for how much time you need for each section, understand what typical exam questions look like, and access personalized performance metrics so you can identify your testing strengths and weaknesses.
Prioritize Self-Care
Finally, it’s important to take care of yourself during the exam preparation process. Ensure you get enough sleep, exercise, and eat a healthy diet to keep your energy levels up. Remember to take breaks when needed and prioritize self-care to avoid burnout. Passing the CFA exam requires dedication, hard work, and a solid study plan. By utilizing CFA exam study materials and resources, practicing active learning strategies, and connecting with other professionals in the industry, you can increase your chances of success.
