Dec 2006 CFA Level I results are out

Good job man.

I just took the level 2 practice in Dec and it doesn't get any easier...

thanks.

level 2 isn't offered in dec, is it?

Level 2's only offered once a year.

And that once a year isn't in Dec.

I didn't say I passed or failed. It was a reference to a practice exam guys. sidebar convo from earlier...

sorry. i just realise that you said practice. my bad.

good luck with that. it will be a "fun" 136 days or so.

Actually, that word "practice" was edited ex post facto. Not that it's a huge deal.

how many months/week/hours per week did you guys have to study to pass level I. I was thinking of signing up for the june test but don't know if i have enough time to study. also do you think that most people fail because they 1. the material is just that difficult or 2. because they were unprepared. I consider myself fairly intelligent but something about a 39% pass rate scares me.

If you studied finance/accounting, L1 is a joke. Don't worry about the pass rate.

why do you say that?

any other thoughts?

I studied probably 300 hours total, and passed Level 1 by a pretty wide margin.

It was still a b!tch of a test though, harder than all my undergraduate courses combined...

L1 material is not difficult at all. If you have a decent accounting/finance background you've seen >80% of it before. Even if you haven't the background, I'm sure the majority of people on this board could pass it easily given he/she puts in the time.

do you think its possible to study/pass while working 70 hour weeks?

Having an accounting/finance background means very little. The CFA tests are not memorization at all. They are very tricky, and you have to know the material thoroughly.

It is not "technically" hard. Not advanced concepts at all.

I don't mean to say that it is a breeze to pass. Still have to review/memorize all the material, and it is very broad.

The problem is, to any question there is a right answer, a wrong answer, and a "CFA answer". Therefore, definitely need to at least review all the material. The leaning objectives are pretty specific.

Whoever said it's not about memorization...right. How many formulas did you have to memorize for L1 ?

hardly any formulas to memorise for level one. things like the ddm, capm and wacc you should understand and know. same thing with how accounting ratios fit in with one another dupont ratio. I'll elaborate a little below:

let's look at the accounting ratios that comprise ROE first: Return on average equity: Net income/sales * sales/average assets * average assets/average equity

Instead of memorizing, you need to understand that the return on equity is comprised of the margin on the stuff that you sell, the rate at which you sell the stuff that you make, the ratio of your equity investment to the stuff that you make.

Once you understand this, then you don’t need to memorize anything. You understand that you can increase your return on equity by, having more profit per item sold (through lowering your cost/increasing your price), by increasing sales velocity (selling more stuff quicker), or by using less equity (i.e. more debt, taking more financial risk). You also have an understanding of how to measure the effects of these variables and see to what extent all these changes have a + or – effect on ROE, i.e. that a company could have decreasing margins, lower asset turnover, but still manage to have a higher return on equity because they are using leverage (taking on more financial risk). This is the kind of understanding that they test.

The same can be said for the formulae for equity analysis and capital budgeting (DDM, CAPM, WACC, etc…). the dcf stuff is similar as well. once you understand the underlying concept, you don't need to memorise the various letters. e.g. in DDM, that the price of a stock is based on the dividends paid in the future, how risky these dividends are and how fast these dividends grow. dig deeper, and you see that the dividends paid are based on the earning and the pay out ratios. suddenly you can link pe ratios with the ddm. the same can be said for capm and wacc.

my point is that once you understand the reality/theory that these models and formulae are trying to describe you won't need to memorise them and recite them over and over to yourself like a bad poem you are trying to learn.

Perhaps the quant section has a little more formulae memorizing, but understanding the concepts can help there as well.

that's just my take on things from level 1.

Very little is memorization - I said it, and I am right.

If it was memorization, do you think it would require so much studying?

I'm not saying memorization = you don't need to understand what you are studying. Many questions are put in some sort of tricky way, you do have to actually understand most of the material (IMO, especially the FSA part).

I'm not even saying that saying that a major portion of the exam is based on memorization. What I'm saying is, there is a still a lot of it. Come on, who needs to know about Roy's safety first ratio, or Chybishev (however it's spelled) inequality. Yet this random BS is still LOS material.

And I maintain my point, the material is still not hard to understand if you manage to put in the proper time. The difficulty is finding the time/motivation to study stuff you 80% already know, except you have to learn it the "CFA way".

I pulled an all nighter, the test was an absolute joke. I passed it. Like said above many times, if you have a good finance/accounting background it is VERY easy.

level one is not a joke.

the grading is skewed by stockbrokers and "financial consultants" off the street. if u want to pass, study. what you know is irrelevant to the pass rate.

Level 1 is actually quite 1/3 quant and 2/3 concepts. the hardest things are not going to be on the test. Ethics will be the trickiest.

I am looking to take Level I in December. I am going to purchase prep materials, but I don't know how difficult it will be.

Background: -Econ/Accounting Undergrad -Currently finishing my masters in Economics (w/ some finance courses)