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How would you rate this year's CFA Level 1 paper compared to previous years, in terms of difficulty and testing concepts?

According to the feedback that I have collected so far, the difficulty level was similar to that of last year's paper. Students found some sections difficult while some were quite easy.

What, in your opinion, is the ideal strategy to crack Level 1 paper this year?

Dedicate one and half minute per question and do not waste much time in solving a challenging question. Mark the difficult questions and attempt them in the end. Most importantly, try and attempt all questions. There is no negative marking, so there's a 33% chance for a student to get the question right since there are three options provided. Make an intelligent guess wherever deemed necessary. Lastly, focus on your strengths and try to make most of the weaker sections.

Please give your advice on ideal time management strategy for cracking the CFA examination.

Time management is a crucial part of any CFA examination. For Level 1 it is important to dedicate one and a half minute per question, i.e. 3 hours for 120 questions. In Level 2 and 3, for the item set type question devote three minute per question and for the essay type format marking scheme is based on time allotted to each question, which means that marks are equal to the time allotted to each question. Candidate should make sure that they don't spill over time on getting a particular question right and should maintain discipline. Students need to keep a track that requisite numbers of questions are solved at the end of an hour. If a student is lagging behind by 5 to 8 minutes, then he might be in trouble. Time management is extremely critical, so I would advice students not to get stuck on the tricky and difficult questions, leave it for later and watch the time.

How easy or difficult was the Level 2 paper this year?

Level 2 exams are always tougher than Level 1. Even the bright students found some sections difficult to solve, particularly in the fixed income section. There was some difficulty in the Ethics section too.

What is your take on this year's Level 3 paper?

I have got limited feedback but what I gather is that the paper was not straight forward. In fact, Level 3 questions are never start forward or easy. Students have raised concern with the questions in the item set section, as this section was expected to be comparatively easy, but it turned out to be difficult. The afternoon section was, as expected difficult and tricky.

What is the ideal strategy for cracking Level 2 and Level 3?

In Level 2, for the item set questions, it is advisable to read the questions first and then read the item/case study thoroughly, and accordingly underline the important parts for the case. Difference at this level is that the questions are not one-to-one. There are case studies and students need to adapt accordingly.Both Level 2 and Level 3 papers are different and difficult, as they skillfully add a lot of redundant information in order to confuse the students. In Level 3, the students are tricked by giving extra information and the challenge is to sift the necessary information, whereas Level 1 is just to check the concepts. Thus, those students who are not confident and fully prepared will be easily confused. The best way to tackle these issues is to practice and read thoroughly, which will in turn build your confidence to deal with such challenges.

Were there any surprises in the Level 1, Level 2 and level 3 papers?

There weren’t any surprises as such in Level 1 paper. In fact, a lot of things that the student studied for the exam were not tested. Nothing came outside the syllabus. The surprises are subjective to a student’s preparations.

In Level 2, the questions asked were challenging, especially in the fixed income section. Students presumed that some parts would not be tested in the exams but they did come, so they were in a fix.

On the other hand, Level 3 is a paper of surprise. It’s the pinnacle and it would be a surprise if there are no surprises at this level. Usually by Level 3, students achieve the requisite skills and thus nothing really surprises them anymore.

Any advice for students who are going to attempt the Level 2 exams in December?

Students need to start early. It is important not to be swayed by the excitement of having cracked the Level 1 exams; it is just the starting point. There’s still a long way to go, so choose a good preparation provider and begin early. In the early preparation, focus on the concepts and towards the later part start practicing.

What about the students who will be appearing for Level 3 exams?

Level 3 is a different ball game altogether. Essay type questions have been introduced for the first time at this level. The morning exams have essay type questions, and further there’s no assistance of three options. At this level competition is cut throat, and the students need to work extremely hard, and cut no corners to crack this level. My advice would be to read thoroughly, do not get carried away in the excitement of successfully having cleared Level 1 and Level 2. Level 3 is the most challenging level and many students get stuck in this for years. So, it is advisable to try and clear it at the first attempt, since students give their best shot in the first attempt, and stay motivated. As one repeats the exams, the level of motivation falls.

What is the passing percentage of students at different Levels?

The passing percentage of students has been falling consistently for the past few years. According to the statistics we have - at Level 1 the passing percentage is 35-38 per cent, Level 2 is about 40-45 per cent, and Level 3 is about 50 per cent.

In what way is Level 3 challenging from the rest of the levels?

Level 3 is markedly different and challenging from the other levels. It is at this level that essay type questions have been introduced, so it becomes challenging as now answers are not arrived by using a simple formula. Further, it becomes grey in terms of the approach. At Level 3 it is more about getting the broader understanding of the concepts in more practical and real setting; it is more about qualitative analysis.

What is the question break up like at Level 3?

At Level 3 the exam is broken into two parts, where the morning exam includes essay type questions and the evening one has item set question, similar to those in Level 2. So the strategy for the evening part is same as Level 2. For the morning paper, we need a special strategy since essay type questions are quite a decisive part of this level. Instructor and CFA institute provides previous years question paper, so it is advisable to solve those papers, since they help in managing time. Apart from solving previous year’s questions papers, students should give mock test in real exam setting to get the knack of solving questions quickly and correctly.

Any particular advice to those students who are juggling job, studies or other activities along with CFA exams?

Finstructor provides an excellent weekend program, especially for such students, so as to assist them. Time management is critical for CFA exams and we are well aware that there is not enough time left to clear all the concepts, thus weekend classes help the students in getting their concepts right. It is observed that on their own sometimes students do not understand much and understand concepts in a limited way. It is advisable to seek guidance of an experienced practitioner to clear your concepts. This will help you greatly and shorten your preparatory time. Apart from the weekend classes, students need to invest at least another one hour everyday for self-study. It is one hour, only if the students have begun preparation early, otherwise more number of hours need to be put in.

Which are the best sources of material for preparation?

Schweser has done a decent job. Finstructor provides excellent videos, mock test series and question banks. In my opinion, at this stage getting notes is not a problem, there are host of course material providers, the institutes provides good set of notes. The reason if any student fails at this stage will not be because he did not have the required notes but it has to be because the student did not have enough practice, or did not give enough mock tests. To supplement the notes, students can go through the class room series, video lectures, mock test and question banks available at Finstructor which in my opinion, is one of the world best products.

How important in your view are tuition and preparatory courses to crack CFA exams?

I think there is absolutely no harm in taking a preparatory course for CFA exams. It is important for the students to evaluate a course provider, watch the demo class or sample material and then choose which course provider they wish to join. I have personally experienced few course providers and I fully endorse product provided by Finstructor. Students should go visit the site and try out the sample material. A good preparatory course can help students in the long run in getting their concepts right and reducing their preparatory time. We study these concepts once in life, thus it is advisable to study well and get your concepts right now itself as they will stick with you for a lifetime. So, there in no harm in investing in a preparatory course, that will not just improve your chances of passing but also fine tune your concepts.

The author, Aditya Ahluwalia is a lead instructor at Finstructor, Mumbai. He has cleared all levels of the CFA and FRM exams with top sectional performance across levels. Aditya is a computer engineering graduate from Punjab Engineering College, Chandigarh. He has subsequently completed his MBA from the Faculty of Management Studies (FMS), University of Delhi. Aditya currently works in the Indian equity markets as a part of the portfolio management team of one of the largest domestic fund houses. He brings with him invaluable experience from the fields of fund management, equity valuation, portfolio management, risk management, quantitative analysis and behavioral finance. Aditya has over 2000 hours of teaching experience to his credit. He has been actively conducting training classes for the CFA and FRM programs for over 3 years.

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