The Ultimate FAQ Guide to CFA Level 1 Exam
Introduction to CFA Level 1
Embarking on the Chartered Financial Analyst (CFA) journey is a pivotal step in a finance professional's career. With Level 1 being the gateway, it's crucial to have all your questions answered. This comprehensive FAQ guide is designed to help you navigate the complexities of the CFA Level 1 exam.
1. What is the CFA® charter?
The CFA charter is a globally recognized professional designation offered by the CFA Institute. It’s esteemed as the most respected investment management qualification worldwide.
2. How do I earn the CFA charter?
Earning the CFA charter involves passing three levels of exams in sequence: Level I, Level II, and Level III. Each level builds upon the knowledge and skills demonstrated in the previous one.
3. Is the CFA charter a degree?
No, the CFA charter is not a degree. It's a professional credential indicating advanced investment analysis and real-world portfolio management skills.
4. What to Expect on the CFA Level I Exam?
The Level I exam is challenging and requires serious preparation. It consists of 180 multiple-choice questions, completed in 4 hours and 30 minutes, utilizing an approved CFA calculator.
5. When is the Level I CFA exam?
The Level I exam is offered multiple times a year. Candidates should select a date that aligns with their preparation schedule.
6. Can I postpone my CFA exam?
Postponement is possible under specific conditions, primarily medical. Withdrawal is simpler, but re-registration fees apply if not done within three days of initial registration.
7. What are the requirements to sit for the CFA exam?
Candidates must have an international travel passport and either a bachelor’s degree (or be within two years of obtaining one) or 4,000 hours of professional experience.
8. What is the format of the Level I CFA exam?
The exam is computer-based, with 180 multiple-choice questions split into two sessions of 2 hours and 15 minutes each.
9. What subjects are tested?
Subjects include Ethical and Professional Standards, Quantitative Methods, Economics, Financial Statement Analysis, Corporate Issuers, Equity Investments, Fixed Income, Derivatives, Alternative Investments, and Portfolio Management and Wealth Planning.
10. What are the topic weights?
Weights vary annually but generally range as follows:
- Ethical and Professional Standards: 15-20%
- Quantitative Methods: 6-9%
- Economics: 6-9%
- Financial Statement Analysis: 11-14%
- Corporate Issuers: 6-9%
- Equity Investments: 11-14%
- Fixed Income: 11-14%
- Derivatives: 5-8%
- Alternative Investments: 7-10%
- Portfolio Management and Wealth Planning: 8-12%
11. How much study time is needed?
Candidates should aim for at least 300 hours of study over six months.
12. How hard is the exam?
The CFA exam is challenging, designed to set a high standard in the investment management field.
13. How is the exam graded?
Grading is a combination of machine and charterholder evaluation, with a set minimum passing score.
14. What is the pass rate?
The pass rate varies, with only about 20% of candidates who start the program earning the charter.
15. What are the exam costs?
Costs range from $1,000 - 2,500 USD, including enrollment fees, exam fees, and preparation materials. Registering early can save costs.
16. Can I take a CFA Level I mock exam in-person?
Yes, Kaplan Schweser offers in-person mock exams at Prometric centers.
17. What are Practical Skill Modules (PSMs)?
PSMs are additional requirements to complete before receiving exam results, taking about 10-15 hours.
18. What score should I aim for in mock exams?
A target mock exam score of 75% or higher is recommended.
Conclusion
The CFA Level 1 exam is your first step towards achieving a distinguished career in finance. This FAQ guide provides a thorough understanding of what to expect, how to prepare, and the importance of this prestigious designation. Remember, success in the CFA program is a blend of dedication, smart preparation, and a deep understanding of the financial world.