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On June 5, 2010, over 139,000 people worldwide sat to write the Chartered Financial Analyst
examinations. The CFA program requires candidates to complete three levels of examinations, one each
year, and obtain 48 months of work experience in an investment related role. On July 25, the results of
this years Level 1 exam were released: 42% of candidates had passed this years Level 1 CFA exam, and
thankfully I was one of them.

The CFA exam has become a gold standard for professionals looking to enter many diverse finance
careers; specifically, many buy-side jobs such as portfolio management and investment analysis. It is
also a great option for analysts working on the sell-side, in areas such as investment banking analysts,
in case they want to make the switch to the buy-side. In January of 2010, after hearing all of the
horror stories of the long study hours and the miserably low pass rate, I signed up to write the Level 1
CFA exam. There were many reasons why I signed up. Obviously an interest in finance first got me
curious to find out more about the CFA program. Many professionals I have talked to in asset
management have promoted the benefits of the CFA, going so far as to say it is a better alternative to an
MBA for young professionals interested in finance. Secondly, if you look at the careers section on your
schools website, many entry level and mid-level finance job descriptions state that the CFA designation
is a strong asset for candidates, and in some cases it is a requirement.

CFA Cheat Sheet: How to Pass Level 1

The CFA institute recommends students study 300 hours for the Level 1 exam. To put that in
perspective, it is 7.5 standard 40 hour work weeks, on top of a summer job or school. The good news is
that 300 hours is not needed for a student coming from a business undergrad. The CFA level 1 exam is
essentially a test on all of the quantitative material learned within a four-year undergraduate business
program, plus a couple hundred pages of new material on subjects such as alternative investments and
ethics. The test is broken down into 10 sections of various weightings: Alternative Investments (3%),
Corporate Finance (8%), Derivatives (5%), Economics (10%), Equity Investments (10%), Ethical &
Professional Standards (15%), Financial Reporting & Analysis (20%), Fixed Income Investments (12%),
Portfolio Management (5%), and Quantitative Methods (12%).
Recommended Courses

If you are considering pursuing the CFA designation, you can save yourself a lot of time and headache by
taking both the advanced accounting and investment analysis courses offered at your university. At
Queens University, these are Investments and Portfolio Management (Comm 324), and Advanced
Accounting (Comm 311 and Comm 313). Any course on Investments and Portfolio Management will
cover the basics of fixed income investments, derivatives, portfolio theory, and equity investments.
These sections make up a large portion of the Level 1 exam. I will admit bond valuation, yield curves,
and many other fixed income concepts are not my strength; but having taken a course on portfolio
management, I found many of the CFA exam concepts similar to those that I had already learned in my
course work. As for the advanced accounting courses, with 25% of the exam marks based on Financial
Statement Analysis, it is essential to master this area. It is much easier to learn some of the more
advanced accounting concepts over an entire semester of classes than to cram them into one month of
studying for the CFA exams. This is why I would recommend candidates take at least one advanced
accounting course in their final year of school.
Study Materials
The CFA Institute forces you to purchase their textbooks when registering for the exam, an excellent
business model for them. The books cover every topic necessary for the exam and then some; in total
the CFA books are 2600 pages long and can read very slowly. YOU DO NOT NEED THEM!
There are a number of alternative sources for students to use; I used the Kaplan-Schweser guides, which
are half the length of the CFA Institute books and provide a much clearer explanation of the concepts.
The Kaplam-Schweser guides also include multiple choice questions at the end of each chapter and full
length mock exams covering all required material. These extra questions and mock exams are perfect to
study from, as they are very similar to the questions asked on the real exam. The Kaplan-Schweser guide
costs about $500, a steep price for any student, but it is much cheaper than the $1,000 fee to re-write
the Level 1 exam if you fail on the first attempt. If you are serious about passing the Level 1 exam, make
the investment, and purchase the Kaplan-Schweser guide.
Study Plan
Start studying early; I cannot stress this enough. This does not mean starting to study on your Christmas
holidays, but definitely start before final exam period in April. I signed up for the Level 1 exam in
January, and began studying in March. March is a busy time for many students, as final projects are due
and preparations for final exams are just around the corner. I am not a big organizer, but a strategy I
used to keep on task was to purchase a wall calendar where I recorded the number of hours I studied for
CFA exams, completed school homework, or headed out with friends each day. While I never set a
concrete schedule, I tried to study for the Level 1 exam for 10 hours each week in March, or an hour and
a half each day. Some days I didnt study at all for CFA exams I had school work, or wanted to head out
partying with my friends but my calendar reminded me of my obligations. By the end of March, I had
reached my 40 hour goal and was already 20% through the study material.
For the month of April, I did not touch CFA material; I had 5 exams at the end of the year and was very
busy. Once May 1 came, the intensity shifted up, and almost every hour I was awake I was either

studying or feeling bad that I was not studying. May was one of the longest months of my life; it was like
a never ending exam period. It was a gruelling time, and I barely went out with friends, but you get into
a routine and can tolerate it.
The Final Week Before the Exam
During the final week before the exam, you should by now have covered all the material and be starting
the mock exams. The real CFA exam is 240 multiple choice questions that must be completed in six
hours, split into a morning and afternoon session with a two hour lunch break. When completing your
mock exams, try to simulate the experience of exam day as much as possible. That means complete the
entire morning half of the exam (120 questions) in three hours, take a break for lunch, then do the
afternoon in three hours as well. Do not look at the correct answers until after you have completed the
exam. On exam day you will have to second guess yourself and go into the afternoon session knowing
you got some of the morning questions wrong, but you have to overcome this feeling. Once you have
completed a mock exam, score it and see how you did. The CFA institute never releases what the
minimum passing score needed for the examinations is, but no candidate has ever failed if they scored
above 70% on the examination. The mock exams are a little bit easier than what the real exam is like on
exam day, so shoot to get above 75% on the mock exams. Once you complete and mark your mock
exams, take a step back and identify areas where you need to focus on studying going forward.
Exam Day
The night before the exam, stop studying at midnight at the latest. There is no point in cramming
further; the CFA exam is a 6 hour marathon, and an extra hour of sleep will do much more than a couple
more hours of cramming. I wrote the exam in Toronto at the Direct Energy Centre, in a room the size of
an airplane hangar. You are writing with 4,000 other students, some are nervous, some claim to have
not studied at all. Forget about what others say and just focus on the exam in front of you!
Final Thought
Having studied and successfully completed the CFA Level 1 exam, I can honestly say it was one of the
most time-consuming and mentally draining tasks I have ever attempted. I am relieved to have passed
the Level 1 examination, and truly believe that if any business student follows the tips I have outlined in
this guide, they too can pass on their first attempt. I am looking towards next June when I will write the
Level 2 examination with a mix of nervousness and excitement: I know it will be a daunting task, but I
know with a great deal of hard-work, I will be writing the guide How to pass the CFA Level 2 exam this
time next year!
Good Luck.
Additional Links
CFA Institute
Analyst Forum (Forum for CFA Writers)

John Veitch is a Queens BCOMM 2010; he is currently an Investment Banking Analyst at a Big-5
Canadian Bank.