You are currently viewing 5 Tips to Help You Pass Chartered Financial Analyst (CFA) Level 1 [2022 updated]

5 Tips to Help You Pass Chartered Financial Analyst (CFA) Level 1 [2022 updated]

1. Put in a lot of practice time!

Because the CFA exams are so long (6 hours for each level), time management is essential. It’s one thing to absorb information; you’ll also want to put it into practice so that you can improve your recall and ensure that you’re understanding the questions. Start with the CFA Institute’s books, which contain a plethora of mock exams and practice questions. Then, identify your weakest subjects and concentrate on reviewing them. Then, at least two months before the exam, begin taking mock exams. Free mock questions can be found at the end of this blog.

2. Don’t waste time.

About 285 hours of study is recommended by the CFA Institute. However, depending on your background, time management skills, and prep course, you can make the most of each hour, reducing wasted study time significantly. For example, with The Princeton Review, you should be able to put your distractions aside and complete your Level I CFA exam preparations in under 120 hours.

3. Develop a study plan

Setting aside that time and committing to staying on track is critical. By spreading the required work out over six months, you not only establish a solid routine that allows you to digest all of the material, but you also give yourself some leeway to reschedule your study sessions if you fall behind.

4. Focus on concepts

The CFA exams are becoming more conceptual, particularly the Level I exam. Concentrate on the most important formulas for the exam and provide a formula sheet that highlights common-sense applications and how to derive any additional information you might require. Finally, you’ll want to figure out which formulas you can skip if they’re consuming too much of your time.

5. Know your financial calculator

You’ll be able to bring one of two calculator models to the tests. Practice with your chosen device ahead of time so you know exactly how to use it. Once you’ve gotten the hang of it, you should be able to rack up some quick points right away.

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5 questions will be shown from a total of 30 free practice questions to prepare you for CFA level 1 exam. Enjoy!

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1. The percentage returns for a stock for a 5-year period are provided below:

2008: 12%
2009: 9%
2010: -2%
2011: 12%
2012: 8%

What is the standard deviation of the stock returns? You should treat the 5 year period as the population, not as a sample.

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2. Asmita Mack, CFA, lives in the country of Onionland. Each morning, Asmita crosses the border to the neighboring country of WDC where she manages client portfolios. This morning, a positive earnings report was announced for HawkBlack, Inc. (ticker KANE). Asmita would like to invest in the stock and believes it would benefit her clients as well. WDC has a law that restricts portfolio managers from investing in securities owned by their clients. Onionland has no such law.

To comply with the Standard, what is the minimum that Asmita must do?

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3. A portfolio manager has a tight tracking error of 50 basis points. The manager expects to be within this tracking error for a given quarter 85% of the time.

If that expectation is correct and each quarter is independent, the probability that the manager is within the tracking error for at least 7 of the next 8 quarters is closest to:

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4. The early 21st century saw a few significant stresses on the stock market. The markets dipped deeper and more quickly than many were expecting might happen.

Which of the following statistical metrics most accurately describes this event?

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5. Which of the following forms of trading blocs allow for unrestricted trade of goods and services among its members?

I. Free trade areas
II. Customs unions
III. Common market

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