6 Simple Strategies for Crushing the Financial Analyst Exam
August 23, 2022
Becoming a financial analyst is the first step to many of the prestigious careers on Wall Street, including being a hedge fund manager. There are three types of Financial Analyst Exams from Level 1 to Level 3.
Passing exams at each level is a daunting challenge and require adequate preparation. The pass rate for the exam is usually below half which shows you only the best become financial analysts.
However, if you have the right strategy, you can ace the examination. The following six strategies should help you crush the financial analyst exam:
If you want to pass the financial analyst exam, it would be best to study at your own pace and not rush anything. Therefore, you should start studying for the exam as early as possible, so you do not have to be in a hurry close to the exam date.
Pacing yourself will ensure you comprehensively understand the course material, and you can get help for any part you do not understand. You should leave the last few weeks before the exam for revision, practice questions, and mock exams.
Most people choose to take CFA (chartered financial analyst) Program preparation classes, and though it has a lot of benefits, you have to progress at the class’s speed which could be too fast for you.
Focus On The CFA Institute’s Curriculum
Everything you will face in the CFA exam at any level will be from the CFA Institute, so it would be best to focus on the institute’s curriculum. By reviewing their curriculum, you will know exactly what to expect for each level.
The good news is that the entire CFA curriculum is available on the CFA website. You should examine the CFA website’s exam prep materials and study tips.
Doing so will ensure you focus on only the most-tested material. Many people make the mistake of relying on too many sources of information instead of using the one that matters most. Moreover, you only have six months, so ensure you focus on the CFA curriculum.
Use Available Tools
To best prepare for the CFA exam, you should use the tools at your disposal. Many students make the mistake of trying too hard to find resources they can use and ignoring the basics.
The CFA institute website has most of the tools you will need, including plenty of test questions, guides, and other resources to aid your preparation. You should consider study tips that help improve your memory which is crucial for the CFA exam.
Do not make the mistake of thinking you need to hire tutors and buy expensive courses to pass the CFA exam. If you utilize what you have, you will pass the test.
Know The Exam Format
An essential aspect of preparing for the CFA exam is knowing the test format you will encounter in the exam room. The Level 1 exam takes three hours and includes 120 multiple-choice questions.
You will go for a two-hour lunch break and then return for another three hours to answer a further 120 questions. Level 2 has Item Set questions, which include case studies about an investing institution or individual investor, followed by six questions about the case study.
You will also do 60 questions in the morning session and another 60 in the afternoon at level 2. Level 3 morning session includes short essay questions which may include calculations. The afternoon session includes Item Set Questions.
Keep Up To Date
The CFA institute can change its exam format, so it is essential to keep up to date with developments in the exam. For example, in 209, the CFA institute changed its multiple-choice questions to have three answer choices, one correct answer, and two distractors instead of four choices.
It is also crucial to stay abreast of news and developments in the financial industry. Therefore, you should read newspapers and industry publications like the Financial Times, Economist, Business Week, Wall Street Journal, CFO Magazine, etc. keeping up to date with news and trends in the financial industry will help you learn a lot about finance and also provide references you can use in the exam.
Get Enough Sleep and Arrive Early
Sometimes the smallest things make the biggest difference. To crush the CFA exam, you should ensure you go to bed early and get sufficient sleep the night before the exam.
You want to be well rested to have enough focus and energy for the six hours of exam time the following day. You should wake up early on exam day and eat a healthy, nutritious breakfast.
The last thing you want is to arrive early for the exam or not get enough sleep which will increase your anxiety leading to poor performance.
Any CFA will tell you all three exam levels are no joke, and there is no substitute for adequate preparation. The six strategies above will help you pass the exam with flying colors. Practice is the key to perfection so give yourself enough time to practice and be confident for the exam.
Featured image: Perawit Boonchu, iStock.