Orientation for the Chartered Financial Analyst

What is the CFA Program?
• A self-study, distance learning-based program
• Accreditation Process
• Requirements for Award of the Charter
– Sequentially pass Level I, II and III exams
– Have 3 years of relevant professional experience
– Provide professional references (Level III)
– Apply for CFA Institute Membership
– Submit professional conduct statement

Member and Candidate Growth

Components of the Program
• Involves practical and relevant education for investment and other finance professionals

Inputs to the Program
• The learning process is tied to current practice trends
• Job analysis every five years, which involves thousands of practitioner surveys, answers the question: “What knowledge and skills are needed”?
• Candidate Body of Knowledge (CBOK), Curriculum, Learning Outcome Statements (LOS), and exams are all based on this

The Curriculum
? Readings are drawn from various materials
? Each has learning outcome statements (LOS): “The candidate should be able to…”
? Each LOS has one or more command words, which indicate type of learning expected: “discuss, calculate, contrast”
? LOS are NOT a proxy for exam questions, but ARE the best guide for candidate study

Why Take the CFA?
• The Charter is a globally recognized and portable standard of competence and integrity for investment professionals
• Knowledge across core areas of the investment industry
• Respect and credibility in the investment community

More Tangible Charter Benefits
• Greater earning power; in the U.S., the CFA premium is about $40k (+25%)
• Career opportunities in a competitive environment
– Many local charter holders have gone abroad
– Outsourcing; investment-related jobs will eventually find their way to the Philippines
– Hired by brokers, investment/commercial banks, mutual funds, consulting companies, etc.

Examination Features
• Based on assigned readings and LOS
• Average time to answer is limited
– Level I: 1.5 minutes for each of 240 questions
– Levels II and III: Each question is timed
• Exam type:
– Level I is 100% multiple choice
– Level II is 100% item set
– Level III is 50% item set, 50% essay

Examination Features
• Total exam time is six hours for all 3 levels; three hours each for the AM and PM sessions
• Topic weights are shown in the study guide
• Many questions tend to repeat the same concepts or computational procedures from previous exams
• Again, the LOS provide you an important guide as to the types of questions you will encounter

Grading of the Exams
• Guiding philosophy is fairness and consistency
• A detailed and structured process
• Depending on the type, questions are either 1) machine graded or 2) graded by a team of charter holders
• Answers to Essay questions are evaluated for knowledge and content, not style or language

Minimum Passing Score (MPS)
• Set by the CFA Institute Board of Governors
• Various inputs and metrics used
• Passing rate for each level is a residual determined by each level’s MPS
• The MPS is set for the exam as a whole and not for individual topic areas or item sets
• Ethics/FSA are very important sections; may determine if you pass or fail

Individual Preparation
• The best strategy is to be overly prepared
• Make time for your studies
– Bare minimum of 250 hours; better if 300 hours
– Excludes attendance in review course
– 30 weeks x 10 hours per week = 300 hours
• Read ALL materials (twice if possible) and hone skills through practice exams, quizzes
• Read more about the CFA program
• Use the Study Guide (2006) as your map
• Before each of our sessions, you should have:
– Read the assigned readings
– Solve the quizzes, sample exams, problems, etc.
•After each session:
– Solve more practice questions
– See if you are comfortable with the LOS
• After the course, you will have about 5 weeks to go back and review everything

Assorted Tips
• Try studying/buying materials in groups
• Ask for study leave from your boss/firm
– Write a letter to justify this “special” leave
– You’ll never know unless you try
• Use the sample exams to determine your weak areas and then concentrate on them
• Know your calculator (Texas BAII+/HP 12c only)
• Take a break during Christmas/Holy Week