At this point, you’ve passed both the Level I and Level II CFA exams. There’s only one last thing to do! The Level III exam is the final step in the process of becoming a CFA charterholder, and it will not be easy. This post aims to answer all of your questions and provide you with all of the information you need to pass the Level III exam.

WHERE DO LEVEL I AND LEVEL II CFA EXAMS DIFFER?

The CFA Level III test is somewhat different from the previous two. You must write your answers rather than selecting from a list of multiple-choice alternatives during the Level III exam’s morning portion. Level II’s 10-item sets are repeated in the afternoon session.

You must learn and memorize the relevant data to pass the Level I exam. Level II is usually regarded as the most difficult because the issues are math-based and the solutions are foreseeable. Through case studies and math, the Level III test assesses your ability to effectively perform the duties of a CFA charterholder.

Because of the considerable differences between Level III and the other two tests, you’ll need to change your preparation strategy. The most common reason why people fail the Level III exam is because they do not follow this crucial step. If you’re not sure if you’ll be able to do it on your own, a study bundle can help.

WHERE DOES THE LEVEL III CFA EXAM GET ITS ORGANIZATION?

The Level III CFA exam is split into two sections, one in the morning and one in the afternoon. The morning session consists of “constructed replies,” which are multi-part essay-style questions. These questions put your ability to apply what you’ve learned in the classroom to a real-world setting by presenting you with a problem to solve. Like Level II, the afternoon session consists of ten item sets. Each item set starts with a statement of the case and then asks six multiple-choice questions regarding it.

WHEN WILL THE LEVEL III CFA EXAM BE OPEN FOR REGISTRATION?

The Level III CFA test is only offered once a year, in June. The exam was formerly planned on a specific day in early June, however the exam date for 2019 will be selected by your geographic location.

HOW MANY HOURS DO PEOPLE DEVOTE TO STUDYING FOR THE LEVEL III CFA EXAM?

The CFA Institute advises that you spend an average of 300 hours studying for each level of the CFA test. Candidates spent an average of 335 hours studying for Level III, according to a poll conducted in June 2017.

IS IT HARD TO PASS THE LEVEL III CFA EXAM?

The Level III CFA test is supposed to be difficult since it differs from the Level I and Level II exams in terms of format. The pass rate for the Level III exam in June 2017 was 54 percent. Keep in mind that these are people who have passed the Level I and Level II tests and have a firm grasp on CFA concepts and topics.

HOW MUCH DOES IT COST TO TAKE THE LEVEL III CFA EXAM?

When you register for the Level III exam, you will be charged a fee. The CFA Institute test has three registration windows: early, standard, and late. The early bird registration fee is $650, the regular registration fee is $950, and the late registration fee is $1,380. Early registration not only provides you more time to study, but it also saves you money that you may use to purchase CFA exam preparation materials or attend classes.

This is a quick rundown of the information in the Level III CFA exam. Please do not hesitate to contact our Student Support Team if you have any additional inquiries. Our CFA blog also has some further information. Watch this video from David Hetherington, Kaplan Schweser’s Level III manager, while you prepare for the exam: How to Pass the Level III CFA Exam.

Professional Standards and Ethics:

This is one of the most important topics of study because the CFA certification program is committed to the promotion of universal professional ethics. This is reflected in subject weighting as well, with ethics having equal weighting across all three CFA Levels. This subject covers the code of ethics, professional standards, and Global Investment Professional Standards, as well as a larger aspect of the ethics issue as it pertains to the financial business (GIPS).

Corporate Finance (Corporate Finance) is a term used to describe the financial activities of a company.

This part, which is only 7% weighted, covers topics including capital planning, NPV IRR, cost of capital, measures of leverage, dividend basics, and share buybacks, as well as working capital management and public company corporate governance. Among the topics explored are agency issues in the context of the agency-principal relationship.

Economics:

This section covers the fundamentals of microeconomics and macroeconomics, with an emphasis on the latter. People with an economics background naturally excel at macroeconomics and find it easier to integrate all of the information presented through graphical presentations, which is the typical method. This topic has a 10% weighting, indicating that it is important enough to explore aggressively.

Financial Reporting and Analysis:

As previously noted, it carries a 20% weighting, making it a substantial enough knowledge area for anyone pursuing CFA. This test measures your knowledge of financial ratios and financial statements, which are frequently used in financial analysis. Revenue recognition, accounts receivables, and inventory analysis, as well as taxes and long-term assets, should all be familiar. Keep in mind that local accounting procedures are of little value when studying for this exam because the CFA is a global exam that focuses on US GAAP and IFRS norms.

Quantitative Analysis Methods:

This section focuses on quantitative analysis and mathematically-based strategies for dealing with complex financial problems, which is why this subject is so important. Some of the most important subjects covered in this section include performance assessment, time value of money, statistics and probability principles, sampling, and hypothesis testing, as well as correlation and linear regression analysis in Excel. In the realms of fixed income, equities, and portfolio management, a good understanding of these principles will provide you with some really useful tools and techniques. The mastery of a substantial portion of the CFA body of knowledge would be aided by a solid grasp and command of quantitative processes.

Alternative Investments:

This part delves into investment types not covered by the other CFA knowledge areas. This can be seen in real estate funds, venture capital, hedge funds, and commodities, to name a few. Because commodities will be heavily emphasized, it will be advantageous for participants to have a good understanding of commodity trading concepts. There may be seven or eight conceptually oriented questions in this part, some of which are directly related to commodities. Despite the fact that this topic has a low weighting in CFA Level I, it may be learnt rather quickly if you put in the effort.

Derivatives:

Derivatives are complex financial instruments, and this section covers the fundamentals of futures, forwards, options, swaps, and the most typical hedging strategies. More complex mathematical tools are typically employed to examine these odd financial instruments. Despite this, the majority of the material on Level I is introductory, and this section is just 5% weighted, accounting for only about 12 questions on the exam.

Stocks and bonds investments:

This section focuses on stock markets and covers a variety of valuing tools and approaches, including DCF, PE Ratio, PBV, and PCF. With approximately 25 questions, this section accounts for roughly 10% of the exam’s weighting. The majority of the questions are likely to be around business valuation and analysis.

Earnings Guaranteed:

The markets and instruments of fixed income, as well as the methodologies used to price them, are discussed in this section. A variety of key concepts, including as yield metrics, duration, and convexity, are discussed. This section starts with a bond analysis and valuation, then moves on to the bond’s characteristics, and finally to 10 debt investment risks. On the exam, this section gets a 10% weighted.

The word “portfolio management” refers to the process of putting together a portfolio of investments.

This part introduces basic portfolio management concepts and introduces important topics including the Theory of Modern Portfolios and the Capital Asset Pricing Model. Only roughly 17 questions are weighted by section on the exam, which accounts for about 7% of the total. This section becomes increasingly significant when the focus shifts to the application of available knowledge for efficient portfolio management in Levels II and III of the CFA.

It can feel like an unrecoverable setback to spend six months of your life studying for a test just to find out that you failed. When you consider that you still have two more examinations to pass, two of which are much more difficult, it’s easy to see why you’d never want to do another practice question.

Before you call it a day on your quest to become a CFA charterholder, it’s critical to take a hard look at what might have gone wrong in your initial study plan. This essay looks at the main reasons why someone can fail the first level of the CFA exam and provides some perspective for how you might solve those concerns and successfully proceed down the difficult, yet ultimately rewarding path of becoming a CFA charterholder.

Don’t even consider it.

After failing such a difficult test, your natural reaction may be to over-analyze the reasons for your failure. Stop thinking about the exam and take a long break rather than grinding yourself into a toxic stew of self-doubt and self-criticism.

Most likely, you’ve spent the last six to eight months juggling the obligations of a full-time job while also trying to squeeze in an extra study session whenever a spare minute arose. That is a very draining and difficult way of life.

Allow yourself to relax. Take some time off. Take a trip to the beach. However, do something that isn’t related to the CFA exam or studying. If you give your mind a month off from the crazy pace you’ve been keeping, you’ll be shocked at how much clearer it becomes.

Make a sincere evaluation

It’s time to ask yourself some honest questions now that you’ve had some time to focus on more fun things and given your brain a break.

What motivated you to study for the CFA exam? Do you have a natural passion in the subject matter, or are you just looking for a means to make more money and advance in your career?

You already have a significant advantage in passing the CFA exam if you have a natural interest in any or all of the topics on the exam. The curriculum for the CFA Program is nearly 4,000 pages long. If you have a natural interest in any or all of that information, you’ll have an easier time memorizing it than someone who doesn’t.

What if you’re not interested in nature?

If you don’t have a strong interest in the content or are only studying because you believe it will help your job, you should seriously consider retaking the test.

No matter how hard you try, your subconscious will work against you since every minute you spend studying generates a small amount of internal anger that you have to devote so much of your own time to something you aren’t totally devoted to.

Is Natural Interest Necessary for Passing?

Unfortunately, a natural interest in the topics included on the CFA exam will not be enough to gain you a passing grade. What your natural interest may do for you is provide you with the motivation and stamina to keep learning even when you’d rather be doing anything else.

How did you fare against that timetable?

The first thing you should consider is how your actual study time compares to that of the example. If your total study time was less than 300 hours, the next question is how much less?

If you studied for less than half of the minimum 300 hours, you failed the CFA exam since you didn’t devote enough time to it. So, the question isn’t so much whether you’ll be able to pass the exam as it is whether you’ll be able to devote the time required to master it.

Not everyone can devote so much time to school while working full-time. If you have certain life obligations that you know will prevent you from preparing, the best option may be to postpone the exam for another year and retake it when your calendar is less hectic.

What if you spent more than 300 hours studying?

If you studied for the necessary amount of time but still failed the exam, it’s time to analyze your study methods and see if you can improve your study time in the future.

Should you follow the CFA Institute’s course?

The most typical issue new students ask is whether they should study with the original textbooks or whether they should use more efficient additional preparing materials. This is a crucial question because it determines how effectively you will use your study time. It’s also crucial to remember that everyone’s answer to this question is different, and it’s based on their individual learning styles and preferences.

The CFA test is divided into three parts, each of which covers a large amount of content. To be successful, you should have a well-thought-out strategy for mastering the topics and being as prepared as possible on exam day. These pointers can assist you in creating your personal study schedule.

Begin early and be consistent.

The CFA Institute suggests 300 hours of study, which is usually the bare minimum most people require to be successful. You’ll need to put in the time and effort every week to devote that many hours over the course of six to nine months. It’s crucial not to jam everything into the final months leading up to the exam. Starting late and cramming for an exam is a surefire way to fail.

Make sure you stick to your timetable and don’t get behind.

Be disciplined and stick to your study plan once you’ve created it. Take a CFA test review course and prepare for it like you would for a university or online school to get the motivation you need to stay on track. This may entail reading relevant literature ahead of time to obtain a better grasp of the topics to be presented and jotting down any questions you have. Forming a study group and meeting on a regular basis is another fantastic approach to keep to your goal. Studying alongside others who are going through the same difficulties as you are a great way to stay motivated and get support. Furthermore, being able to ask questions and explain concepts to others aids in the development of your own mastery of the topics. Build meeting times for class and study groups into your schedule and stick to them!

Prepare, practice, and deliver

The three essential stages of learning provide a very beneficial organizing structure for your plan: Prepare > Practice > Perform® is a phrase that means “prepare, practice, perform.” The key to success is to concentrate on the CFA Institute’s Learning Outcome Statements (LOS). These are performance-based objectives that spell out exactly what you should be able to execute on exam day. One LOS might be, for example, ‘calculate and understand Net Present Value (NPV).’ You should be able to appropriately use the command phrases “calculate” and “interpret.”

1. The Prepare stage is where you start learning the fundamentals. This can be performed via reading, listening to lectures, or attending them. This level consists of passively absorbing information and examples of language, theory concepts, and LOS principles. In a nutshell, the preparation stage prepares you for the next critical stage. Before you can learn how to calculate NPV, you must first understand what it is and what tools you will need to do so.
2. Practice is the next level. This is where you put what you learned in the Prepare stage to use by solving practice problems. If you need to calculate NPV, the best approach to learn how to do so is to complete ten practice problems that need you to do so. Candidates frequently devote too much time to preparation and not enough time to practice.

Perform is the third stage. This is when you take a mock exam, evaluate your performance, identify your strengths and weaknesses, and return to conduct more practice where you believe you need it.

It’s recommended that you intend to spend 30-40% of your time preparing, 40-50% practicing, and 20% performing as you create your calendar.

Review on a regular basis

The material you learn when you first start studying for the CFA exam will not stick with you until exam day. It’s a good idea to go over this information again and again. Plan to revisit material you believe you’ve already mastered for a few hours each week. Complete some practice questions, and if you make any errors, go over them again until you understand them.

All of the materials should be covered.

Don’t play the guessing game by assuming which LOS won’t be tested and then failing to study the material. Every LOS is fair game for the exam, so be prepared to be put to the test.

Ethics are at the heart of all we do.

In general, you should study all topics in the CFA curriculum in the order they are offered. Spend some time on ethics at the beginning to gain a big picture overview, then focus on it heavily in the weeks going up to the exam.

Use the last month to put on a show.

Start taking practice and mock tests in authentic situations a month before the exam. To mimic one session, take the exam on your own with no notes and set aside at least two hours and 15 minutes. The objective is to use these assessments to determine how prepared you are by identifying and resolving your areas of weakness. If you get a question wrong, consider whether the problem was a lack of grasp of the topic or an application of your knowledge to the question. Keep note of your results and keep an eye out for a positive trend. You should be consistently scoring above 70% by exam day.