CFA level 1 Study Plan, Topics, Pass Rates and Tips


hello everyone hi and welcome to the
channel wallstreetmojo to know more about this video cfa level 1 the study
plans topics so the passing rate and the tips that I can give watch the video
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clicking the bell icon that’s given below welcome everyone and today we have
a very fantastic topic that is cfa’ the course that every financial student they
prefer to study well let me give you a short synopsis what we are going to do
in this particular topic well cfa level 1 is focused on acquiring
knowledge so see if a level 1 topics and curriculums that I’m going to show you
then some of the important things that you should remember for this curriculum
the subjects now then I will probably make you understand some of the exam
details and then the study plans will also move on with the exam tips that you
should take care while taking this into consideration so the simple questions
and finally conclusion to this whole particular topic well let’s quickly
begin with this so guys CFA exam is indisputably one of
the toughest and the most valuable financial example is I mean to help the
professional to acquire the advanced financial analysis and the investment
management skills in capabilities so CFA a professionals are in great demand
in various sub domains of Finance for their expertise in knowledge of the what
we call as the financial analysis okay I am known for this and CFA
professional great demand it’s this certification is awarded by CFA
Institute of USA United States of America and is globally acknowledged by
the top of financial institutions in the top industry employers so it is
comprehensive certification program consisting of the three levels there are
three level level 1 2 & 3 each of one focuses on specific knowledge area to be
to help you develop a detailed understanding of the concept and their
practical application so each cfa level represents are an important
step on the part to become a CFA charter holders so it must be understood
that to complete the certification program and acquire the CFA Charter not
only helps to validate the financial knowledge and skills and the capacities
a professional but also to showcase the ability to work patient you can make you
know determined and well-defined efforts to excel in the domain of the
professional pursuits so in this course we will focus in this topic we will
focus on here fill level one example the first and most important is the step
work wire well how does the curriculum goes if you talk about the curriculum a
no cfa level model is focused on acquiring knowledge of the basic
concepts in finance so it would be very important to get understanding of this
subject why is organization of the exam so there are basically 10 knowledge
you can say areas covered in CFA organize and therefore model with an
increasing level of difficulty from CFA a part 1 2 part 3 so the 4 modules the
for knowledge models of see if includes our ethics then you have professional
standards ok then you have some of the things called investment tools and asset
classes and the final but not the least the portfolio management okay and wealth
planning so this is how the whole topic area this is a tabular representation of
the knowledge areas along their specific waited for the level 1 exam so if you
see ethics and professional standard has total 15 the investment tools the
highest rated rate which is here on ethics then you see the next comes the
financial reporting in analysis that is also one big chunk quantitative methods
economics then corporate finance this is all the investment tools alternative
investment is very low in the first level but it will increase gradually
with as you increase the level two and three the alternative investment in
derivative and probably the equity fixed income will increase as the level
increases so these are the wealth planning tools all of them the wealth
planning tool is basically the portfolio management and there
is the asset classes so this is how the whole thing is this is of the whole
bifurcation is divided now the financial reporting standard so well the important
things that you should take into consideration for level one exams I will
start with you know the financial reporting ethics cons makes approx 50% ethics are cons okay
and financial reporting so all of this makes 50% weighted sure it
should be apparent from the information presented from about that you know
financial reporting analysis Ethics professional standard in
quantitative method represents closely around 47% of the exam
weighted taken together so it is clear that if one scores well in this 3
exams 3 subjects they stand to get a good chance of passing the CFA level one
however it is recommended to not to ignore any of the subjects to be able to
score well in the exam this is 47%
second the non-financial graduates to put more efforts on the financial
reporting remember this very important okay see CFA level one may not be
nearly as challenging for the finance graduate whereas for non finance
graduate might have to put it greater amount of preferred for financial reporting
analysis but it should be M it should not be a major obstacle those having a
completed an MBA in the finance of probably engineering background could be
more comfortable with the financial reporting and could find their Forte in
the quantitative methods which can be rather than challenging for those who
are non mathematical background third the subjects and the modules are mostly
common in all the levels okay so one needs to understand that although the
subjects and modules are common to all the 3 cfa levels the real difference
lies in the exam period which keeps changing and with each level so for CFA
level 2 and 3 there is a period of stress and more complex areas
incorrect derivatives alternative investments equity investments portfolio
wealth planning however is almost an equal level of stress on the study of
the ethics in all the three cfa levels which indicates a kind of the
significance attached to this area of the study of the cfa institute right so
next we provide you an overview of all the 10 knowledge areas covered in the
CFA level 1 and this should be held to participate in an insight into the
nature of the topics as well as the best strategy to be adopted for successfully
covering the CFA curriculum well we will start with the subject the first is the
ethics the whole name of the subject is ethics and professional standards so
this is one of the most important area of the study CFA as a
certification program is dedicated to the promotion of the universal
professional ethics so this is evident in the subject in weighted as as well
as whether ethics is one of the area which receives comparative weighted
in all waited in all 3 CFA levels so this subject covers code of the it takes
professional standard global GIPS with global investment profession standards
as a larger part of physics as it is as it’s applicable in the financial
industry second comes the corporate finance okay now these section is rather
limited in its scope merely 7% of the weighted you all know it now and it
covers the area related to the capital budgeting NPV IRR cost of capital
leverage dividends Share repurchases working capital management
corporate governance –is of the listed company and so on and so forth so some
of the problems address including the agency problem is also context in the
agency principal relationship in this particular subject
then comes the economics in economics so what you can learn is you know this
section covers the fundamental of the micro as well as macroeconomics okay so
with its primary focus in it later it goes without saying that you know those
with with an economics background generally tends to do well in the
macroeconomics and makes it less challenging to assimilate all the
information presented with the help of the graphical presentations okay and as
it is a standard method so the subject has 10% weighted to which makes
it important enough to be pursued you to with diligence then comes the financial
reporting and analysis well as we have already made clear that it has 20%
weighted making it important enough in knowledge area for anyone
pursuing the CFA these exam tests the knowledge of the financial ratios and
the financial statement commonly employed for the purpose of the
financial analysis along with this one should well be
closed in the concepts of the revenue recognition account receivables in the
inventory analysis along with the taxes and these long term assets so it must be
kept in mind while preparing for this exam the local accounting practice and
it does not hold much relevance as CFA more of a global exam focuses on US GAAP
and IFRS then comes the fifth that is the cons that is quantitative methods
well this section is focused on the quantitative analysis and mathematical
oriented approach so basically it addresses the complex financial issues
which makes this as a knowledge area and such as a great value so the most
important area that is covered in this includes like in a performance
management TVM time value of money then we have post facto hypothesis testing
probability sampling linear regression and so on and so forth so study of these
concepts provides some highly useful tools and techniques for the knowledge
of the fixed income problem for equities and portfolio management so proper
understanding and grasp of a quantitative technique would help you
master the proportion of the CFA body of the knowledge 6th I’ll take
alternative investments okay the this section includes the form of the
investment not covered under the other knowledge areas or the CFA so this
includes like real estate funds VC’s hedge funds commodities and said is
there is a special focus on the commodity so it would be helpful for the
participants to have an in-depth awareness of the concept related to the
trading in commodities they could have in 7 or 8 conceptually oriented
questions from this section but you know some of them specifically related to the
commodities although this section is short on waiters in cfa level 1 but with
proper efforts this section can be mastered with the comparative
cases 7th comes derivative into picture derivative see derivatives or the
complex financial instruments there the complex are financial instruments and
these sections deal with them specifically so including different
fundamentals of futures forwards options swaps hedging techniques usually M so
more complex methods are usually employed for studying this exotic
financial suite but on the level one most of the material is introductory in
nature and weighting raters are weighted of this section is only 5% with only
about 5% of around 12 questions in the exam
8th is equity I talk about equity section primary reads with the equity
market and covers various tools for the techniques available for the evaluation
companies like DCF, PE, PBV, PCF and so on and so forth so this section has nearly
10% weighted about 25 questions are there and you can say that you know from the
section of the exam most of the questions could be related to the
evaluation and analysis of the company then comes 9 the fixed income
well this section covers the fixed income market and instruments and the
pricing techniques the important concepts included in like yield measure
duration in this convexity are discussed sequentially this section deals with the
bond analysis and valuation before taking of the bonds feature before
finally moving up to the top 10 risk related to debt investments so the exam
rated is closely around 10% for this section 10 portfolio management
well this section deals with the fundamental principle of the portfolio
management it introduces some of the key concepts including like theory of modern
portfolio capital asset pricing model so the section waiter is only around 7%
which is roughly it translates about 17 questions okay in the exam however the
section gains increasingly significance in the level 2 and level 3 of CFA as it
focus shifts to application of the available knowledge for the efficient
portfolio now what are some of the details that you should understand that
CCFA level example is closely around 6 hours long okay divided into the morning
and the afternoon session the morning and afternoon okay of 3 hours each
both of them there will be three hours of each each of the session has multiple
120 question both of them comprising of total 240 questions okay in total 240
questions in both the session so it should be kept in mind that 3
choices are provided for each of the questions and most of the questions are
unrelated to each other so this helps to judge the knowledge and the capabilities
of the tester and participants in the wide and range of the knowledge areas
okay well once you’re done with this there let me give you some of the
details on the results and the past rates results and the pass rate see
result of the CFA exam are usually announced within 60 days after the date
of the exam so the result can makes us both on CFA instituted web
as well as example his winds also get an email okay before detailing on the pass
rate one must understand cfa level 1 exam is conducted to vice in the month
of June and December the pass rate if you see in the past 10 years in the past
10 years 2007 to 2016 the oral past it has been around 39.65
okay the 10-year average person of cfa level one is around 40.5 the total 10 year average person of December cfa level 1 exam is
closely around 38.8 okay so this is how the pass rate have
gone about the declining pass rate for CFA level it has often been or pointed
out that you know passing rate for this exam has been declining for past few
years and it could help for participants ruled it possible reasons behind it it
is considered that the result of the low of prerequisites the level 1 exam which
results in a lot of people appearing for the exam so how only those would good
level of preparations make though those lowering the passing rates this holds an
important message for the people within non accounting financial background
CFA might require a good deal of the extra effort from them to be
able to clear an exam and it would not be an intelligent to up for CFA just
because you are eligible to appear for it not a good plan ok now what are the
CFA level one study plans that you should take into account well when we
talk about the study plan as you have already seen you know the passage of the
CFA part one is there are rather low in range of 37 to 40% this
shows that it no rather limited number of the candidates successfully completes
the exam and you really have to make a concerned effort to be able to pass it
through and earn the coveted see if it charted however at this moment we are
focusing on part one but the same holds good for part one as well part two as
well it is only that is not the level of the difficulty will keep rising with
each level going above usually you know I consider that you know 300
hours you know is enough generally it is recommended to vote around thinner
dollars of the structured study to be able to complete a cfa level 1
successful it goes without saying that all those with a solid background any in
any of the CFA topics might require lesser amount of the time for
preparation and it would help you remember that cfa level 1 exam covers
ten topics 18 study sessions 60 in totals readings okay
so each study session should be reviewed and
independently to be able to ascertain the level of the familiarity with the
topics covered therein okay here I’ll give you a general study plan how you
should go about this is a tabular representation of how the weights is you
know the highest weight to the lowest weight okay and based on this how many
number of hours you should devote the days you you should number of days that
you should allocate right so you have allocated 28 days so you require in
total 6 months to complete the entire thing so based on the weight you should
give number of hours and then the rest of the studies so this is how you should
have a proper guidance this means that you know one should start repairing at
least 5 to 6 months before the actual date if you see this and the exam
cover the curriculum well within the time and devote the last month with a
review of the exam material so this can be crucial to success in the exam as the
study material is comprehensive and without proper review the entire
curriculum one may not be able to take or make it through so this is the best
way to start the tutorial you know and move to some of the nodes such as to
ensure that you have covered all the important concepts are from the point of
view of the exam and thereafter you know I would advise you to look at the CFA blue
box examples the blue box examples that are discussed within the chapter and the
end of the chapter that is EOC questions okay this may take around
eighty to closely around 100 hours however it is always recommended to have
they completed at the exam preparation at least 1 month in at once of the
exam date now if you have let’s say 100 to 120 hours exam preparation time
obviously you know that this is for you very short times when however I think it
is just enough to give your one best shot with I recommend it I recommend
that you know forget about the CFA curriculum book sorry but you can’t look
at your your books now on an average it takes around 200 plus ask to
both of the CFA curriculum books which is obviously you are shorter so go
through the or our website of Wall Streetmojo CFA video tutorials this may
take around you know just 40 to 50 hours and these are good starting points
to prepare yourself for the exam once you have looked at the videos go through
these special notes in detail though these are the summary version of the CFA
books however I feel they are sufficient enough
ensure that you know you pass the exam reading this version note will take you
around around 50 not more than that 50 to 60 hours or so and the remaining time
if any you must spend at attending as many mock papers as much as possible
okay and you can an in concept revision so please find it enough for time to
practice or 2 to 3 mock test paper because it is really very helpful trust
me on this and I had only a 100- 110 hours of cfa level
one exam preparation and use this strategy to pass the cfa level 1 now
if you have closely around let’s say 200 to 250 hours of available for example a
position then if you if you can spend 200 to 250 hours preparing the exam then
you might be in the dilemma should I touch the compute see if your curriculum
books are not my take would be to selectively work on the CFA curriculum
book first step you should go through the video to tutorial cfa by WallStreet
mojo then move to the Schweser notes and later to CFA curricular moves
now within the curricular books for the cfa level one do have a look at the cfa
blue box examples and the EOC question so the blue box that you should
short-short consider and the EOC questions okay now let me give you some
of the final tips on how to work on this cfa level 1 exam see first you create
the schedule for yourself how you are going to go about and outlook on another
tool and the map to progress you complete each study section now this
would help to complete the curriculum at least a month a month before the exam ok
and during the last month review as well it is advisable to develop an adult to
study schedules be be very short short on your schedules okay it is very highly
recommended to attempt all the questions you know in the exams at the end of the
each section instead of relieving it to later because this will help to assess
the progress you have made and expose in the areas of the weakness which might
require extra effort and study time to be mastered now practicing this
questions would also add to your confidence in what you have learned and
help you get a feel of what you might encounter in the exam ok now it is very
important to remember that you know to acquire knowledge of the financial
concepts and understand several complex term that is associated as for the cfa
curriculum because this is because there are number of complex financial concepts
covering thumbs are defined in certain way in
curriculum while the other places things may have been defined somewhat
differently so this may create a confusion in lack of clarity as a
recommend so I basically recommend to continuously refer to the curriculum and
stay on the right track of your exam curriculum is the key to success and the
wallstreetmojo we use well you can prepare well with the mock test in the
in the final days of your studies mock tests really help you well in the
month-long of long curriculum review period prior to exam it is generally
recommended to practice more questions and appear for the mock exam offered by
CFA Institute because this would require you to take around 3 hours morning session
tests and followed by 2 hours break and after wait 3 hours again afternoon
session whatever comments because this is likely to help you to prepare well in
the exam psychologically as apart from helping assess the general level of the
performance and remember one thing that CFA Institute clearly defines the LOS
which is known as learning outcome statement the knowledge skills
capabilities that you should be able to apply after completing each reading and
all the Associated exercise and problem now in order to master the other is you
can write down the principle concepts just write down the principle concepts
definitions and formulas which would help you to remember them better you
could make I know what you call as the flashcards and to be able to instantly
review the key concepts in the curriculum instead of carrying out
around the comprehensive material make sure you do that now this makes it
easier to get back to the learning and reviewing material in the shortest time
breaks so one effective technique could be used you use called the mnemonic
technique devices and other other memory techniques that is possibly available
now it is very important to develop an organized approach to study in order to
avoid missing out any concepts in the nuances presented in the CFA curriculum
so it is not all all necessary to study subjects in order to and they are
presented in instead it could be better approach to start with the section
covering the fundamental before taking up more advanced topics while preparing
so one logical way would be first focus on the quantitative methods ok
quantitative methods is very important now one logical way is to first focus on
called method which might find wider application in other areas before moving
on to the financial reporting so leave more complex in advanced topics
like macro ethics for later another approach could be to focus on the
contacts at one time understand the concepts and tackle the problems
presented studying the quantitative qualitative material including the
ethics behavior so my personal plan would be go for count first then post factor
you can take up financial reporting then ethics then you can go for corp fin that
is corporate finance fixed income economics then you can go for equity
okay that is also a good option equity then derivative alternative investments
portfolio and finally you can go with the ethics so this is how you should go
about you know you mean portfolio but you know ethics should be read twice oil
and recommend ethics again to be read at the end now to ensure you do not lose
any of the time during the exam it would be best to practice with the CFA
approved calculator which can be provided which can prove to be a great
help during the exam so though the Texas Instrument be a two plus official
calculator it is approved by CFA it would be useful if you have well
acquainted with the functions available for calculating the effective VL so the
capital budgeting in other necessary calculations that you can go for right
so well cfa level 1 I’ll make my final conclusion on cfa level 1 topic here
cfa level 1 is certainly not the faint-hearted or or those casualty
interest it is meant for the people already working the field of Finance
with a good amount of knowledge in a specific domain and they are willing to
develop the expertise in the professional skills and capabilities of
the career advancement so the odds of completing the exam exams successfully
are certainly not I mean it’s not in cement of a bubble but you know
participants needs to realize that you know without an organized and dedicated
effort the results may not be favorable on the other positive side completing
cfa level 1 exam opens up you know the whole new world of professional growth
opportunities in expands the scope of the knowledge and the skills for any
finance professional so they can set their side on earning much cover at CFA
charter and put their best foot forward that’s it I think I have covered
everything that that cfa level 1 exam has to
the student has to go through if you have learn and enjoyed watching this
video please like comment on this video and subscribe to our channel for all the
latest updates thank you everyone once again Cheers

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