Friday, October 6, 2023

Passing CFA Level 2 - Nine Mantras to Pass CFA L2 [Based on August 2022 Attempt]

In this post, I will tell you Nine Mantras for passing the CFA Level 2 examination. Those nine crucial mantras are mentioned below.

Cover the Syllabus 9 times
The first and foremast mantra is to cover the syllabus Nine times. Why nine times? There is a special reason behind it. The CFA syllabus is humongous. I am not saying that you need to prepare for the entire syllabus in a comprehensive way for nine times. You have to understand the length and breadth of all the topics and concepts in the curriculum. So, that you are in a position to relate to whatever is being asked in the examination. You do not have to take the pressure of remembering everything. You need to cover the entire syllabus as many times as you can and preferably nine or more than that.


Do not do Research on Quantitative Methods
I know quantitative methods is interesting, it has a lot of concepts and it is very demanding as well. You will be tempted to do a lot of reading on your own and try to understand that why certain things happen the way they happen and what are the assumptions and why are such assumptions used over here and what will happen if these assumptions are violated. Do not go outside of the scope of the curriculum. Quantitative methods encompasses a lot of things and with my experience of studying quantitative economics, I know that the content of quantitative methods is of two to three semesters. So, you have to understand that this is the kind of beast you are dealing with.


Corporate Issuers as the easiest topic
Corporate Issuers is the easiest topic, don’t miss it. Read everything thoroughly in corporate issuers. How can you miss something which is very easy.


Financial Statement Analysis (FSA) and Alternative Investments are text heavy
Financial Statement Analysis and Alternative Investments are heavily terminology dependent. So, there is very less mathematics and a lot of text. So, keep on reading as much as you can, but do not beat yourself up if you are not able to learn everything. 


Fixed Income, Derivatives, Portfolio Management
All these topics will consume most of your time, because they are heavy in terminology, heavy in maths and heavy in conceptual understanding as well. Do not take these topics lightly. You have to focus a lot in these three topics. 

These are the three pillars which you have to make strong- Fixed Income, Derivatives and Portfolio Management


Economics and Equity give the best ROI of your time invested
They will ask you to understand the concepts, remember the theory, and remember the terminology, but you will not find it difficult. You will find it easy and that will increase your score in CFA Level 2 examination. So, economics and equity are going to be your friends in your journey. 


If you leave ethics, you will cry
Try to read at least 20 to 30 minutes on a weekly basis, and it is not difficult, it is just requiring your attention. Do not leave it. 


Revise, Revise and Revise!
It means that you need to constantly revise the curriculum. So, if let’s say you have six months of preparation time slot, so revise after every couple of months. 


Calculator is your friend
Always know how to do any activity on your financial calculator, be it standard deviation, present value, future value, annuity, because in the exam, you will have to do a lot calculations and if you are not hands on with your financial calculator, you will hate yourself for it, because that is the silliest mistake you can commit. 


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