While waiting for me to finalise some of my ideas on the 3rd and perhaps last part of the financial crisis article, let us side track a bit and talk about how to prepare for financial exams like CFA, FRM exams. No doubt those exams are difficult and no matter what additional aids you can afford you cannot afford to cut your study time. For first time takers you would need at least 350 hours for FRM and CFA level 2 exams, the reason why the average is 250 hours is because most of the candidates are repeat students, when you repeat you need perhaps half of the 350 hours.
So how do you want to study to max your chances of passing. There is no perfect way but there is one thing i must stress, it is to start early. Starting early give you time to absorb the information and to seek help should you encounter a problem. It also allow you to plan for mishaps or unpredictable situation such as business travel and the birth of a cute baby. With many of the candidates holding important positions in the bank, starting earlier can allow for gaps.
Usually the first stage and perhaps the most difficult stage is call the understanding stage. At this stage you would read the material and try to understand as much things as you can. You would take notes, do further reseach, ask your collegue etc. This stage build the base and it is perhaps the most important stage and also the most lengthy.
The next stage comes pratice. Knowing the material but not knowing how to do questions is as good as not knowing the material. During this stage you may also gain deeper understanding. Some concepts can only be deeply understood if you do questions on them, especially the quantitative questions.
Then come the exam pratice stage, where you put your skills and pratice exams. This stage is crucial. It is during this stage where you plan your exam strategies such as how long to spend on each question, what type of question to do first, when to go to the toliet. Unless you are some kind of experience taker don't assume that the bridge would allign when the boat is in front of it. Do at least one paper on real exam condition and stress yourself, ask your child to run around and kick a ball to your desk, if you dont have a child you can call me if you live in singapore i have few infants availble lol.
The last stage is where you put the facts to memory. Remember this stage would be so much easier if most of the work is done in the first few stages. By now most of your doubts should be clear and you should have a strong understanding of the concepts and how to apply them. Depending on your abilities usually this take one to two weeks.
During the exam. Expect the unexpected. Know the procedure, if you do not know ask some one who has experience. If you know what is going to happen you be less stress. Have batteries with you. If you are usually BA II plus the plastic one, change your batteries b4 the exam, dont waste your time unscrewing your calculator during the exam.
Here is what i do. Stage one, do all the question in which i can do and do it fast. Stage 2, do all question that i can do but need time. Then go to the toliet. Stage 3, do the more difficult questions by method of eliminating choice and picking the most potential answer, you cannot be sure of the answer but after so much reading you should at least know which one have a higher chances. Last stage check question in which you have doubt.
How long do i neeed?
It depends on how many hours u can spend per day, and can you make full use of the hours you assign. For parents with young child, constant crying from baby is going to disrupt your study, do plan for that. I am not a parent but i know baby can cry non stop. Typically 5 to 6 month for CFA and FRM studies, and 3 months for CAIA studies. ARPM needs maybe one month. PRM need also one month per paper. I assume that you are working and studying at the same time.
Always remember to plan for gaps in your study timetable for the u never know what may happen cases.
Should i get 3rd party support
I do want to stress that i am using 3rd party support. I do not want to recommend any products because that up to you the reader. But i do strongly felt when i study for CFA exams that the questions CFAI provide are too little and too simple to reflect the actual exams. The books by CFAI are nicely written but extremely thick. If you are a full time student and patient enough you can read it. Other wise i suggest you get 3rd party material to speed your understanding and use the CFAI as further reference. It is better to understand a little then to read a lot and understand nothing.
Once you have some understanding using 3rd party notes you would find reading CFAI books and doing CFAI questions so much easier. For professionals i strongly recomment 3rd party study solutions, you have spend 1000 on the exam whats another 1000 for books, think about the time you can save and the increase chances of passing. Anyway most professional CFA level 2 candidate in singapore earns at least $3000 so thats only 1/3 of your monthly pay even for the lowest paid candidate. A big portion may be earning more than 10k a month so this one time 1000 is "peanuts".
Do you need to attend courses, if so online or live classes
Typically attending classes run by reputable lecturers does help, especially if you have little financial background and have trouble trying to make sense of what the textbook is saying. The quality of a live class is higher, since you can ask question on the spot. For live classes some classes are held while u are sleeping so u cant ask questions directly. Beside there is more interaction and "feel" in a live class. This makes learning more interesting. The benifit of online classes is u can watch it any time, and some even allow u to watch it more than once. Some study providers do recorded their live classes so that students can view it again if they want to. Check with your provider if they provide this added service. I cannot tell you who is the best CFA or FRM lecturer, it all depends on preferences. But one thing for sure, you are your best teacher, if you dont put in the effort even having all the Chartered holders as your mentor wont do you any miracles. For those whom do not have time an online is better. Some may choose to attend crash course camps that runs like 3 whole day in a row. For some people cramping 3 whole days of info is a piece of cake to them, for me i can still handle it but i prefer my lesson to be spread out so that i have time to deeply understand what is teach today before moving into a tougher topic the next lesson. Remember most of the lessons build on knowledge of previous lessons. So my advise is revise constantly, dont wait till last min to revise.
How to choose a course
1. reputation of the lecturer
2. quality of lecturer. Ask people whom attend the course, if possible request to sit in for a preview lesson, most provider allow that if you ask.
3. what material do they provide and is it good. No point signing for a lesson if the lecture notes provide is piece of shit.
4. convience. Since most is working, near your office is top choice. Do keep in mind that you may have overtime so too far from office means you miss the lessons
5. After study support. Does the lecturer answer questions and is her explaination good. Basically having someone to ask question is one of the benifit to enrol in a course.
6. Speed of the lesson. Too slow the lecture may not cover enough vital point, too fast you catch no balls
7. Make sure the study schedule fits you. If your schedule is too random. you may consider online lessons. Do of cause pick that which have lesson while you are awake, so that you can ask live question. Asking online is not as good as asking in class but still is better than nothing
8. Price. I do have to stress quality is more important than price, but still price is important especially when the company is sponsoring you. You dont wish to spend 3000 of company money on a course and end up in the failure zone.
9: qualification of lecturer. Does he hold a chartered holder. If you sign for FRM lesson, having your lectuer holding the FRM destination is an advantage because he has first hand experiecne of the questions and materials. Also how long have he/she been teaching. The more experiece lectuers can better convey difficult concepts and answer tough questions. He/she is also more likely to know the major pitfalls and misconception students can make and highlight that in the class.
Tips.
Do not start counting when you see numbers. Some question do not require any counting. For example if you are ask to count the operation leverage of X company and there is only one choice with greater than +1 you know thats the answer.
If you are in doubt just mark in the question paper and come back later, dont spend 10 mins trying to clear your doubts.
If you find that B is the correct ans, then B it is. You can briefly look at C and D to see if they seem better, but dont carry out extensive test on C and D, even if you did find out that D is better ans the B, the time you spend may cause you the next 3 question
Dont shade the oval with the pencil upright, slant it so that there is more contact point. I thought only primary school child make this mistake but most adult do too. And unless you have gentle hands avoid using mechanical pencil. Dont worry you can bring in many pencil, you can bring in 100 if you want, so bring it more than a few, i recommend 3 to 4 with sharpener and dont forget your eraser.
Get a good quality pencil and eraser. Dont get those that breaks easily or leave stain marks all over. Get a good sharpener too, you dont want to end up with 1/4 of your exam time trying to uncork the broken lead stuck inside your sharpener
Be calm, you are there, make good use of it. There is no way you can remember everything you study so just make use of what you know and choose the best answer. Dont worry about failing the CFA and FRM exam, as more people fail then pass. Of cause no one wants to fail but if you reach that stage then dont be too harsh on yourself. If you tried your best, thats it, perhap you should try harder or change your strategy next time.
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