Ask me about the CFA program

[Phone Booth]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
I've heard of people breezing through the first exam by putting in little effort, but I think you're the exception to the rule. I haven't heard of anyone breezing through the second or third exams. Yes, it was worth the effort for me.


[/ QUOTE ]

Actually it's the other way around. It's impossible to pass the first exam without at least cramming for about a week or so because of the sheer amount of arbitrary terminologies being introduced. You can, however, pass the second exam without studying at all if you have fully absorbed the material from the first exam, because most of the new material being introduced is logically sensible (thus derivable during the exam).

[/ QUOTE ]

Not sure I agree with this statement at all. Level 1 is all but a survey class, where L2, at least with accounting, I doubt anybody can walk in and pass w/o studying the materials.

[/ QUOTE ]

Well, there's very little new accounting material (except maybe some concerning multinationals) introduced in level 2 (well at least when I took it in 2005). And most of the investment analysis section is somewhat obvious - as in, there isn't a whole lot that is completely arbitrary. Besides, you don't have to get that high a score to pass.

Likewise, if you give a smart enough kid who knows calculus very well but hasn't had exposure to multivariable/vector calculus a light multiple choice exam on the subject, he will learn enough during the exam to get by because how vector calculus works isn't at all arbitrary and whichever parts that are can be inferred from the questions and corresponding choices.

[kevkev60614]

[ QUOTE ]
[ QUOTE ]
how useful is that little piece of paper or whatever it is in actuality?

[/ QUOTE ]

Enough to make median salary 233k for a charterholder w/ ten years experience as of a few years ago. That is more than someone w/ a MBA,

[/ QUOTE ]
Just out of curiosity howdy, where did you see that number?

[kevkev60614]

[ QUOTE ]
Can you perhaps give some thoughts on what you would consider when deciding between a CFA or an MBA. I am looking for a door opener into a more challenging career. I have a BA in math and an MS in Education. Sorry if this is too general of a question but any thoughts would be appreciated.

[/ QUOTE ]
The CIO at my last job had two Masters degrees and a CFA charter, and he always spoke more highly of the CFA charter. The CFA charter is less common, less expensive to obtain, and does a fantastic job of educating those seeking a career in the investment industry. Howdy essentially posted above that you're more likely to demand a higher salary with the CFA charter.

But as I said above an MBA is more widely known and respected. If you end up enjoying a job outside of the investment industry, an MBA is likely a better choice.

[kevkev60614]

[ QUOTE ]
[ QUOTE ]
Actually it's the other way around. It's impossible to pass the first exam without at least cramming for about a week or so because of the sheer amount of arbitrary terminologies being introduced. You can, however, pass the second exam without studying at all if you have fully absorbed the material from the first exam, because most of the new material being introduced is logically sensible (thus derivable during the exam).

[/ QUOTE ]

Not sure I agree with this statement at all. Level 1 is all but a survey class, where L2, at least with accounting, I doubt anybody can walk in and pass w/o studying the materials.

[/ QUOTE ]
Yeah, Phonebooth's statement is just wildly inaccurate. I'm not sure when you took the exam, Phonebooth, maybe things have changed recently. I can say with certainty though that the vast majority of material on the current Level II exam is not review, nor is it derivable from the material on Level I. Passing the second exam "without studying at all" is just not possible, even for someone who aced the first exam and has been in the industry for years. The breadth of the candidate body of knowledge is tremendous.

[kevkev60614]

[ QUOTE ]
[ QUOTE ]

how much work would learning the required accounting material for the exams be for someone with absolutely no exposure to any accounting in the past?

[/ QUOTE ]

i can only speak for level I (though i don't think there's much accounting material beyond level I). i think if you were to spend a solid day or two studying the material, you'd have no problem passing if your knowledge of the rest of the material is strong.

[/ QUOTE ]
Actually, a large chunk of Level II is financial statement analysis, which is steeped in accounting. The same topic is about 20% of Level I IIRC. The CFA Institute recommends that you don't ignore one topic completely and I agree; not only would it hurt your chances of passing Level I but it would hurt your chances of passing future exams as well. The accounting material wouldn't come as easy to you if you have no experience with it at all, but just by putting in a little more time to that subject, you'd probably be fine. IOW the Level I accounting material doesn't assume you're starting from scratch but you could definitely pick it up.

[kevkev60614]

[ QUOTE ]
You mentioned that you got your trading job before getting certified. How much weight to places put on it for entry level trading/analyst jobs?

[/ QUOTE ]
No trading firm I'm familiar with have any interest in my continuing to pursue the CFA designation. "Analyst" is kind of a broad term. Some firms would definitely be interested in you pursuing a CFA charter; it depends on the firm and the type of analyst position.

[kevkev60614]

[ QUOTE ]
im thinking about studying for my CPA and CFA at the same time. CPA runs from OCT - March, CFA test is in June. the registration deadline is coming up this week, you think its a good idea or am i crazy? I've heard from friends that Level I is a lot of accounting so I should breeze through it. I also work full time at an accounting firm.

[/ QUOTE ]
I've heard of CPAs ignoring the entire accounting portion of the CFA exams and then failing that part. But I'd guess that those CPAs hadn't looked at a lot of the material in years (maybe tax accountants or something) and probably also that this was a fluke. I'd at least review the accounting material because it plays a big part in Level I.

When in March is the CPA exam? If it's late March you might be best waiting to register for the December Level I. I don't know your schedule but if your intention was to not begin studying for the CFA exam until you'd taken the CPA exam, I assume that getting the recommended 250 hours to study would be difficult even if you had all of March and April. I started studying in late Jan/early Feb every year, and some of the other people I know started in late Dec/early Jan.

Best of luck with both exams, though.

[Phone Booth]

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
Actually it's the other way around. It's impossible to pass the first exam without at least cramming for about a week or so because of the sheer amount of arbitrary terminologies being introduced. You can, however, pass the second exam without studying at all if you have fully absorbed the material from the first exam, because most of the new material being introduced is logically sensible (thus derivable during the exam).

[/ QUOTE ]

Not sure I agree with this statement at all. Level 1 is all but a survey class, where L2, at least with accounting, I doubt anybody can walk in and pass w/o studying the materials.

[/ QUOTE ]
Yeah, Phonebooth's statement is just wildly inaccurate. I'm not sure when you took the exam, Phonebooth, maybe things have changed recently. I can say with certainty though that the vast majority of material on the current Level II exam is not review, nor is it derivable from the material on Level I. Passing the second exam "without studying at all" is just not possible, even for someone who aced the first exam and has been in the industry for years. The breadth of the candidate body of knowledge is tremendous.

[/ QUOTE ]

I took the exam in June 2005 (and scored over 70% in all major sections from my memory, so definitely didn't squeak by) - I doubt the material or the difficulty of the exam has changed substantially. In the interest of not revealing any personal information, I will stop involving myself in this argument (but not necessarily this thread) after this post. PM me if anyone's interested in pursuing this further.

I will say this much though - most non-experts significantly underestimate the abilities of experts, because experts do things that they themselves are not capable of understanding. Hence, you have cases like durrr thinking he can beat anybody at chess with rook-odds because in his mind, there can be nobody so good that they can overcome such overwhelming odds against even a reasonable player. Likewise, because most people are no good at taking multiple-choice exams or deriving material on their own (a lot of the material in CFA Level II is stuff that any smart person would eventually come up with by themselves and they can certainly do that during the exam, when all clues are presented) so they don't believe that anybody else can. Multiple choice test makers are like bad poker players trying to cheat - they are easy to read. They have to somehow present the correct choice and simultaneously present other, erroneous choices. The problem, however, is that there's no good way to present these other choices without revealing the nature of the answer. I won't talk about the specifics since they depend on the exact test and you figure that out during the exam but I will say that you'll find enough patterns in any multiple choice exam - the key is analyzing each answer choice even for questions that you know the answer to - they should reveal how the test maker likes to lay out the wrong choices. So much so that if I were to design a multiple choice test and my test takers are very, very smart, I would probably make it a True/False test (or the statement a, statement b, tell me if just a is true, just b is true, neither is true, both are true type questions)

The biggest enemy of a great test-taker employing the above stragegy is time limit, since it is often prohibitively time-consuming to do such an analysis during a test. Fortunately, most people are so bad at math that most tests that focus on calculations have far too generous a time limit.

[z28dreams]

All,

I'm interested in entering the finance field, but am not exactly sure what route to take. Accounting doesn't interest me much, but analyst/research type jobs sound pretty interesting. I think trading would probably be too stressful for me.

I have a degree in electrical engineering from a good school (though crap GPA), and have been bouncing with jobs. I currently work doing internet marketing - so it's mostly business development with a little bit of tech stuff built in (web dev/SQL/php/etc ).

What kind of companies/jobs might take someone like me in as an entry-level position to start getting involved in finance? I really have no finance experience outside of some minimal stock trading.

Help!

[dustyn]

How much work experience do you have? Someone in your role who wants to move from marketing to finance, has an engineering degree with a mediocre GPA from a good school, sounds like the ideal candidate for an MBA, assuming your work experience is the right amount.