A Chartered Financial Analyst (CFA) is a certification course given to the people who undergo the CFA program and complete acceptable work requirements. This is a three-stage exam to test the fundamentals of financial management. It is considered a certificate that defines an individual’s knowledge relevant to a professional career in financial management. The process starts with level one, and there are several CFA Level 1 Formulas to help you start with your dream.
CFA Exam Defined
The Chartered Financial Analyst (CFA) examination is a global professional qualification in investment research, valuation, corporate finance, risk management, financial analytics and portfolio management. This exam is administered by the CFA Institute (formerly known as the Association for Investment Management and Research), making it one of the most difficult exams in the world.
Only approximately 22% of candidates pass this exam on their first attempt. Thus, the CFA degree sets individuals who have demonstrated superior skills in these fields to become investment professionals with expert knowledge across all major asset classes.
Three levels of CFA Exam
There are three levels of the CFA exam. The three levels of this program constitute six papers in total (three each at Levels I and II).
Level I
It is the most basic, appropriate for anyone with an undergraduate degree in any major. It examines more fundamental financial accounting and investment analysis material, which some CFA Level 1 Formulas can master.
Level II
The second level is most appropriate for professionals with about four to six years of full-time investment experience. This level covers more specific topics, emphasizing mathematically intensive topics like derivative pricing.
Level III
This final level is intended for senior-level professionals or academics with several years of experience in asset management or related fields. The most difficult of all tests is the final challenge called the “Diploma Program”, or nicknamed “Dip”.
Candidates must pass all three parts to be awarded the designation of Certified Financial Analyst (CFA).
Pro Tips to Pass the CFA EXAM
Any student with sheer will and determination powered by some tips and strategies can clear all three levels of the CFA Exam. Some of these tips are shared below. Just remember to study at your pace. Don’t rush things and try to take things at your own pace. Instead, break down your goal into small targets and leap one at a time. Rushing things might deviate you from you the right path.
Start by practising all CFA Level 1 Formulas. Use most of the available free tools and gain as much as possible. Take routine practice exams, analyze your performance and work on your weak points. Keep yourself up-to-date by reading the newspaper regularly. Maintain a sound sleep cycle and take proper rest during off study hours.
Clearing all three levels of the CFA Exam is a long, tough journey. Therefore it is important to maintain a slow and steady pace while studying. Fuel yourself regularly with proper motivation and nutrition. Then, make a decent study plan and study accordingly.