CFA Level 1 Exam

It's no secret that the banking industry is now more and more dependent on information technology (IT). Banks are forced to buy IT services in large quantities. The purchase is carried out according to different schemes for the support / maintenance of existing systems and for the development / creation of new ones. The first task is solved by people on the staff of the credit institution, generalists of a wide profile with good, but not expert knowledge of technology, and all more or less serious improvements and new projects are often left to the side: it is not profitable for the bank to keep narrow technical specialists on the staff on a permanent basis - they are purchased as needed. Programmers and other techies who have managed to stay in the banking industry develop technical skills to some average level, and the bank is no longer very interested in moving above this level, or rather, it is not ready to pay for it. In general, in IT banks, middle managers with a good knowledge of technology and business are valued, as well as analysts / technologists who are well aware of the business of a particular bank, who are able to set a high-quality task.

Textbook: Schweser FRM 2021

Among other ways to get out of this situation, a good option for programmers is to study finance. This allows you to increase your value further. After mastering technical skills, the programmer has no choice but to expand his understanding of banking, i.e. business, unless, of course, he is going to move to another subject area. And this is also a good test - if banking is not interesting, then it is not worth wasting time on banks. The most successful and happy in the bank are those people who are really interested in all these processes for the endless movement of money

FRM (Financial Risk Manager) is a Risk Specialized Certificate. In terms of difficulty, they roughly correspond to the first CFA level Consists of two parts, each requires an exam (held twice a year). You can pass both levels at once or take turns in two rounds, i.e. you can get a certificate in six months or a year of study, depending on the initial training. After successfully passing two exams, you need to confirm the relevant work experience, but the requirements for its content are lower than for CFA. It is quite possible to get certified by working in a field that is somehow related to risk, including IT. The exams have a lot of math and a good overview of the capital markets. More practical and technical exam than CFA. Perhaps the best choice for quick results (one year of preparation, 2 exams every six months).

CFA Level 1 Exam

CFA exam

Further, oddly enough, we will talk about the CFA certificate. I passed only the first level, the most general and introductory one, without specialized things. I just wanted a good theoretical coverage of basic things. Passing one level is quite a tangible achievement: in technical vacancies you sometimes come across such a phrase: CFA Level 1 as an advantage. And in the resume, submitted by CFA, even the first level, looks attractive to the employer. I did not aim at the other two levels, I do not see the point for myself.

The format of the CFA Level 1 exam is as follows. You need to answer 240 questions, each of which offers three answers. There is no penalty for an incorrect answer, if the correct answer is unknown, it is possible and necessary to guess, this is recommended. Questions are given 6 hours in one day. 6 hours are divided into 2 sessions of 3 hours each with a break of 2 hours for lunch and rest. Each session is given 120 questions, sessions are independent by themselves, but the result, of course, is general. Thus, an average of 90 seconds are allotted for a question, which is quite stressful. The second and third level exam formats are more complicated, and I will not write about them.

Exam preparation

The organizers say that preparation for the first level takes 300 hours, and I did about that. By the way, this grade is also found in language learning, for example, 300 hours are needed to master the CEFR B1 (Intermediate) level in German.

I studied for about a year, trying to spend one hour a day. Closer to the exam for two hours. The system is very important, i.e. regularity of classes. Before the exam itself, it is recommended to take a vacation for at least 2-3 days for a complete repetition. It is very useful.

I ordered books in paper form, at first I prepared using them. I walked through the topics, solved the problems at the end of each chapter. As it turned out later, these tasks are not at all similar to the questions from the exam, but they are suitable for checking the assimilation of the material. Then he sold the books and switched to electronic versions, read them from the phone, which was quite comfortable. With 3 months left before the exam, I switched to Kaplan materials - more focused and concise than the official ones. I read them from printouts (two pages per sheet on both sides). At the end of the chapters, Kaplan did not solve the problems at all, since they are even more distant from the real exam. About 2 months before the exam, he began to intensively solve questions from the official CFA database - they are available online after paying for the exam. There are about 1000 questions on all topics. They are much closer to the exam, but still have an educational focus. A month before the exam, I switched to CFA mock exams. There are 3 of them, you can download them as PDF (also after registration). It was very useful - the questions turned out to be as close as possible to the real exam. I regretted that I did not start solving problems from the mock exams from the very beginning and managed to master only two before the exam. In the end, the essence of the exam is to pass the test and, one way or another, you need to train yourself on it, to the detriment of the depth and quality of knowledge.

CFA Level 1 Exam

A mock exam from Kaplan is held 2 weeks before the exam. The mock exam costs money, but the benefits are many. The format repeats the real exam, but, of course, no one is watching the cheating. At the end, access to the site is given, where a video with a detailed explanation is offered for each question - a very cool thing. The practice exam really makes it clear how difficult it is to sit like this and solve for 3 hours in a row. I figured out if I had time, in principle, to answer all the questions, it was also interesting to feel the brain overload at the beginning of the third hour, when I can no longer remember and use elementary formulas. It also helped to plan the alignment of forces on a real exam.

What are the conclusions?

The exam provides a good broad overview of almost all areas of finance. Yet it is geared towards finance professionals. In finance, a certificate gives a competitive advantage, in IT it is unlikely, but the preparation process pumps knowledge, as well as the ability to systematically work intensively and effectively for a long time.

Business books: Top Picks

ITIL 4 Foundation PDF
ITIL v4 PDF Publisher: Axelos The ITIL v4 Foundation book by AXELOS

Business Model Generation book
Business Model Generation By Alexander Osterwalder, Yves Pigneur

The Intelligent Investor PDF
The Intelligent Investor Publisher: Collins Business Essentials

Investment Banking: Valuation, Leveraged Buyouts and Mergers and Acquisitions
Rosenbaum and Pearl PDF Publisher: Wiley

Fundamentals of Corporate Finance PDF
Fundamentals of Corporate Finance Publisher: Collins Business Essentials

Best Business Management books

#1ITIL Foundation: 4th edition

The fourth edition of ITIL (IT Infrastructure Library) was presented by Axelos in February 2019. The ITIL v4 (PDF and other versions available) focuses on practical aspects of IT management and provides a holistic approach with emphasize on Agile, DevOps and digital transformation topics.

#2Money master the game

Like all great adventurers, we’ll start by getting oriented for the trip. In chapter 1.4, you’ll learn more about the psychology of wealth, what holds us back, and some simple cures. You’ll uncover what it is you’re really investing for, and unleash the power of the best financial breakthrough strategies. Then, in the […]

#3The Subtle Art of Not Giving a Fuck

The Subtle Art of Not Giving a F*ck: A Counterintuitive Approach to Living a Good Life. In this generation-defining self-help guide, a superstar blogger cuts through the crap to show us how to stop trying to be “positive” all the time so that we can truly become better, happier people. For decades, we’ve […]

#4Read People Like a Book

Read People Like a Book: How to Analyze, Understand, and Predict People’s Emotions, Thoughts, Intentions, and Behaviors (How to be More Likable and Charismatic).

#5Fundamentals of Corporate Finance

Fundamentals of Corporate Finance 13th Edition (International Edition). This book was designed and developed explicitly for a first course in business or corporate finance, for both finance majors and non-majors alike. In terms of background or prerequisites, the book is nearly self- contained, assuming some familiarity with basic algebra and accounting concepts, while […]

#6The Intelligent Investor

One of the greatest investors of the twentieth century, Benjamin Graham, proposed his philosophy of “value investing” that could protect investors from dramatic errors and teaches them to develop long-term strategies. This approach is exhaustively explained in The Intelligent Investor (PDF download available) book, which remains the stock market bible since its first […]

#7How Money Works

Money is the oil that keeps the machinery of our world turning. By giving goods and services an easily measured value, money facilitates the billions of transactions that take place every day. Without it, the industry and trade that form the basis of modern economies would grind to a halt and the flow […]

#8Business Communication

Everyday Business Storytelling: Create, Simplify, and Adapt A Visual Narrative for Any Audience. Communication is one of the basic functions of management in any organization and its importance can hardly be overemphasized. It is a process of transmitting information, ideas, thoughts, opinions and plans between various parts of an organization. Good and effective […]

#9How Business Works

Every type of business has to choose an ownership structure. Although there are variations globally, most countries offer similar types of legal entities, from a single- person private enterprise to a massive organization trading on a stock exchange. There are three key considerations: how big the venture is expected to grow; the complexity […]

#10The Essential Manager’s Handbook

The step up to a managerial role can be an exciting, but daunting, new challenge. Suddenly, you are responsible for making sure your team is working together, achieving results, and that overall your department is running smoothly. There is no single technique to becoming an excellent manager, but the Essential Manager’s Handbook provides […]

Best books for entrepreneurs

#11Operations Management

Operations Management is important, exciting, challenging, and everywhere your look! Important, because it’s concerned with creating all of the products and services upon which we depend. Exciting, because it’s at the centre of so many of the changes affecting the world of business. Challenging, because the solutions that we find need to work […]

#12Where Are the Customers Yachts

In 1940 Fred Schwed, a stockbroker whose father had lost everything as a short seller on Wall Street during the Roaring Twenties, published this timeless classic on how the stock market really works. Schwed, a pleasure-loving, cultured man who had been expelled from Princeton University in his final year for entertaining a lady […]

#13Corporate Finance 11th Edition

Corporate Finance, Eleventh Edition This book has been written for the introductory courses in corporate finance at the MBA level and for the intermediate courses in many undergraduate programs. Some instructors will find our text appropriate for the introductory course at the undergraduate level as well.

#14ISE International Business: Competing in the Global Marketplace

The 13th edition provides a complete solution that is relevant (timely, comprehensive), practical (focus on applications of concepts), integrated (integrated progression of topics) and the most up-to-date on the market. Available with Connect: Our highly reliable homework and learning management solution that embeds learning science and award-willing adaptive tools to improve student results.

#15Winning: The Unforgiving Race to Greatness

Winning: The Unforgiving Race to Greatness (Tim Grover Winning Series) From the elite performance coach who wrote the international bestseller Relentless and whose clients included Michael Jordan, Kobe Bryant, and Dwyane Wade, comes this brutally honest formula for winning in business, sports, or any arena where the battle is relentless.

#16Your Next Five Moves: Master the Art of Business Strategy

From the creator of Valuetainment, the number one YouTube channel for entrepreneurs, comes a practical and effective guide for thinking more clearly and achieving your most audacious business goals. Both successful entrepreneurs and chess grandmasters have the vision to look at the pieces in front of them and anticipate their next five moves. […]

#17Your Next Five Moves

Your Next Five Moves: Master the Art of Business Strategy (Hardcover / Audio / Kindle). Creator of Valuetainment, the # 1 YouTube channel for entrepreneurs and “one of the most exciting thinkers” (Ray Dalio, Principles author) in business today, provides a practical and effective guide to thinking more clearly and getting the most out […]

#18Finding the Winning Edge

When those who chronicle the history of the game list the individuals who had the greatest impact on the National Football League, Bill Walsh will clearly be among the names of Halas, Lombardi, Brown, Landry, Noll and Shula. But when you consider who has impacted the game most in terms of those who […]

#19International GAAP 2020 2021

Generally Accepted Accounting Practice under International Financial Reporting Standards. The content of this book takes into account all accounting standards and other relevant rules issued up to September 2020. Consequently, it covers the IASB’s Conceptual Framework for Financial Reporting and authoritative literature listed below. References in the main text of each chapter to […]

#20Schweser FRM Part I Secret Sauce

This review book is a valuable addition to the study tools of any FRM exam candidate. It offers concise coverage of exam topics to enhance your retention of the FRM curriculum. We suggest that you use this book as a companion to your other, more comprehensive study materials.