The results from June's Chartered Financial Analyst exam are in. The pass rates are right about where expected. Forty six percent of those who took the exam passed Level II and 53% passed Level III. About a month ago we found out that Level I had a pass rate of 35%.
The CFA exam has a notoriously high failure rate. Investment bankers at top banks fail, in part because it is difficult to set aside the 250 hours of study time the CFA recommends.
This weekend there was all kinds of chatter on analysts forums when a technical error appeared to have let people get an early glimpse of their results. Test takers logging in to their candidate page on the CFA Institute website found links urging them to "Register for the Level III exam" or links to the the Level II exam.
It seems that the CFA Institute may have uploaded the data over the weekend, without realizing it would flow through like that to candidate's personal pages even the results were not available. The links were quickly taken down but not before some test takers got a preview of their results.
Congratulations to all the DealBreaker readers who passed the test!
Posted by guest , Aug 19, 2008 10:54AM
I passed and that's all that matters to me
Posted by guest , Aug 19, 2008 10:55AM
Passed Level III - this nightmare is over! I never want to see a Schweser book again.
Posted by guest , Aug 19, 2008 10:57AM
to the above posters: Did you feel you learned anything in studying process? I have been doing financial analysis for years and am curious if this test is more like the Series 7 (you need some stuff, but unless you do muni bonds you don't ever need a lot of it), or if it is more like b-school (you learn a lot).
congrats on passing.
Posted by guest , Aug 19, 2008 10:58AM
Some advice: do it gang. Esp while youre young and energetic. I passed in 2002 and its been very good career wise. In fact III was even somewhat interesting. Or maybe I was just shell shocked by then.
Posted by guest , Aug 19, 2008 11:00AM
the cfa is stupid - by the time you get level III, you actually believe markets are efficient
Posted by guest , Aug 19, 2008 11:02AM
3 Its totally like B school. Some people use it as a substitute. Example: an MD (medical doctor, not managing director) in my office did the CFA program, which when combined with his med school training makes him quite the stud covering biotech.
Posted by guest , Aug 19, 2008 11:08AM
@ #6 The CFA is nothing like B-School. Two different animals.
Posted by guest , Aug 19, 2008 11:10AM
"This weekend on there was all kinds of chatter on analysts forums"
Get a new job Carney, you suck.
Posted by John Carney , Aug 19, 2008 11:13AM
Read a new website #8. You suck.
Posted by guest , Aug 19, 2008 11:14AM
Is the CFA better pre- or post- B school?
Posted by guest , Aug 19, 2008 11:16AM
@10. Saw this post on while at B-School.
http://www.theglobeandmail.com/servlet/story/RTGAM.20080818.WBstreetwise20080818094926/WBStory/WBstreetwise
Posted by guest , Aug 19, 2008 11:17AM
depends what works for you, I hear a lot of people take the Level 1 CFA before going back to B-school. some finish, most do not once they get into B-school.
Posted by guest , Aug 19, 2008 11:25AM
In traditional asset management (my background), in all but the best shops and for all but the best schools (Harvard, Wharton) they are pretty equal substitutes and considered to cover similar curriculum. Increasingly, the most desireable employers want both because there are so many CFAs that its hard to differentiate.
Posted by guest , Aug 19, 2008 11:25AM
don't waste your time. yoga will make you a much happier person.
Posted by guest , Aug 19, 2008 11:25AM
If you rub some Hellmanns Mayo on the test, the right answers magically appear.
Posted by guest , Aug 19, 2008 11:26AM
7 Ya think? I have a finance MBA and a CFA. I think they're very similar. Esp CFA I - its basic finance, basic accounting, basic economics. All that you learn first semester of B school.
Posted by guest , Aug 19, 2008 11:32AM
III Is done. now the crappy wait till the 'required' length of job experience. If i had failed i would have walked away... lvl III was painful not difficult just pain.
Posted by guest , Aug 19, 2008 11:35AM
oh and drinks at patriot tonight
Posted by guest , Aug 19, 2008 11:42AM
I once saw a guy in the patriot, eat an old sock with a glob of mayo on it.
Posted by guest , Aug 19, 2008 11:43AM
@16 I agree with you BUT the CFA doesnt cover Operations, Mgmt, Marketing and a number of areas that are core to a MBA degree.
Posted by guest , Aug 19, 2008 11:48AM
I have an MBA (not from a top 5 school, but from a top 20) and it is one of the most useless things I've ever paid for in my life. I basically spent 100k on 2 years of getting wasted. It was a welcome break from the working world but, in hindsight, the CFA is probably a better option.
Posted by guest , Aug 19, 2008 11:49AM
@20, you mean things that are actually germaine to running a business? Who knew?
Posted by guest , Aug 19, 2008 11:54AM
20, 22 It all can be good. CFA is a very focused program, essentially securities analyst training. MBA is broader, but a finance MBA covers a lot of whats in the CFA program. Advantages to doing one or both. But for the CFA, no disadvantages at all. Low cost, study on your own time. Interesting program. No reason not to do it.
Posted by guest , Aug 19, 2008 11:56AM
23 here again. I know I sound like the CFA booster, but if you have a finance MBA and work as an anlyst, Level I is actually not that difficult to get through. Study the ethics unit, which is not as intuitive as you would imagine, and brush up on economics and you'll probably pass.
Posted by guest , Aug 19, 2008 12:01PM
I'll admit, I was caught in test taking hell..
In hindsight, the time commitment is better spent elsewhere. when you're dead, nobody will care how many acronyms you have after your name.
the CFA exam has some good, practical content, but I'm afraid it is becoming the CPA test of the 21st century.. everyone takes it and eventually passes... dime a dozen man
Want to differentiate yourself? learn a new language, do something else, otherwise you're just a lemming.
Posted by guest , Aug 19, 2008 12:04PM
I love (LOVE!) how much time is spent comparing, ranking and generally jostling around on this site- i.e. what's better, CFA / MBA etc.
And for all the foraml finance and quant "knowledge" most people on this site have acquired, they have less sense about concepts like correlation, market signals and conditional probabilities than this:
http://www.youtube.com/watch?v=zrzMhU_4m-g
Posted by guest , Aug 19, 2008 12:22PM
The CFA program is for backoffice people thinking illusorily that it will get them to move to the frontoffice.
I did the mistake of doing the Level I on my last year as an undergrad. That's where they get you. I just passed Level II and I guess I'll do Level III. It's a vicious circle.
Used to be in banking and now in PE. When doing the exam I was surrounded by several hundreds of people. All corporate finance types? I doubt it.
Value is well illustrated here: http://longorshortcapital.com/research/cfa-exam
- Some guy from Montreal
Posted by mktmkr , Aug 19, 2008 12:24PM
How's the CFA for networking?
Posted by guest , Aug 19, 2008 12:25PM
I missed getting a CFA by just one point. They said, "Point is, Bad Leg, you're just too honest..."
~Bad Leg Quezada
Posted by guest , Aug 19, 2008 12:28PM
28 The networking is all done through the NY Society for Securities Analysts. For which you don't need a CFA to join.
Posted by guest , Aug 19, 2008 12:28PM
want to rake in the cash? try these start up ideas:
(i) design a professional exam, give it a slick name and acronym.
Do the math. use your own inputs: application fee(s) times # of applicantions = much cash
(ii) start your own MBA, MBA-equivalent program:
Same math: application fee(s) times # of applications = much cash
regardless of which one you choose, sell it hard, market the snot of it, spin it, increase its perceived value. call it an essential professional 'investment'.
props to those guys
Posted by mktmkr , Aug 19, 2008 12:28PM
I was being sarcastic but thx n e ways.
Posted by guest , Aug 19, 2008 12:54PM
#29 - nice lie. you dont get a final exact score, so you have no way of knowing if you missed by a point.
take a report.
Posted by guest , Aug 19, 2008 12:55PM
#27 - using the logic in that longorshort post, how much would your 40 year old self pay for all that time you wasted in classes in college? or all those hours you wasted at work?
bad argument is bad
Posted by guest , Aug 19, 2008 1:09PM
Take the CFA if you're serious. Having a CFA (or any credible professional designation) won't instantly get you the job, or earn you more money, or give you a guaranteed job. It's not like a teacher's certification or union card.
Having a CFA will keep you in contention when there are 10 applicants for 1 spot. It keeps you off the list when HR gives orders to cut headcount 50%.
I remember a few people who gave me shit for wasting my time studying for the exam. When the mass layoffs hit in 2001, they were the first to go. When jobs were impossible to get. When the industry finally turned up, they were out of the game and never got back into the securities business.
Posted by guest , Aug 19, 2008 1:16PM
I'd do either top 20 B-school or CFA. doing both sucks too much time out of personal & professional life. besides if you're an MBA you end up hiring CFAs anyway.
Posted by Anal_yst , Aug 19, 2008 1:31PM
My completely uninformed opinion is that if you want the opportunity (which you'll likely pay out the ass for) to get drunk on weekdays and spend a few hrs/day studying, some "networking" and a general quasi-vacation from working, go to b-school. Otherwise, the CFA doesn't seem like a bad alternative, besides the fact that for about 4-6 months at a time you're gonna be suicidal.
Posted by guest , Aug 19, 2008 1:38PM
"Congratulations to all the DealBreaker readers who passed the test!"
I think congrats are also in order for those who did not pass the exam and feel like they wasted 6 months of their lives!
-Bitter Young Lady
Posted by guest , Aug 19, 2008 1:41PM
38 If its any consolation, those six mos of effort will make it easier to pass next time.
Posted by DS , Aug 19, 2008 1:54PM
What about the CAIA for those only interested in working in alternative investments? How highly regarded/useful is it?
Posted by Cincinnatus C , Aug 19, 2008 2:24PM
taking the CFA is like:
http://i4.photobucket.com/albums/y129/ShortBus1570/Genius.gif
Posted by guest , Aug 19, 2008 2:29PM
I passed L2!!!!!!!! Saw the link mishap over the weekend.
Posted by redpandot , Aug 19, 2008 2:30PM
@40 good question and one I'd also like to know...
Posted by guest , Aug 19, 2008 2:34PM
43 Me too. I've looked at the sample questions and decided its not rocket science and wouldn't take any major studying, which makes me think its not very useful. I've noticed a lot of people involved with hedge fund of funds marketing or research have the credential, rather than those that do hedge investing.
Posted by guest , Aug 19, 2008 2:37PM
i imagined a story here about sex and $100 bills.
Posted by guest , Aug 19, 2008 2:38PM
never mind - its back
Posted by guest , Aug 19, 2008 2:50PM
CAIA = suggestion by #31.
Don't have top 20 b-school or CFA - If you haven't figured out its who you know not what you know by now you never will.
Posted by guest , Aug 19, 2008 2:54PM
47 I'm gonna take issue with the "who you know" part. Work isn't like that anymore. Was when rates were fixed, US was overwhelmingly dominated the global economy. There was no need for a meritocracy. Everything was run by a clicky waspy power elite. Now smarts count for a lot. Equally important though is presentation. All the smarts in the world can't compensate for a lack of polish. People like to be around others who speak and look well.
Posted by guest , Aug 19, 2008 2:57PM
#47:
I have both... [MBA (top 10) and CFA]
also, it's not "who you know" but "who knows you"
regards,
#31
Posted by guest , Aug 19, 2008 3:21PM
MBA's are for those that don't make it past year 2.
Posted by guest , Aug 19, 2008 3:27PM
So where's everyone drinking tonight to celebrate? Maybe Team DealBreaker will stop by and buy a round.
Posted by guest , Aug 19, 2008 3:30PM
Wall Street Warriors come out and play.
Posted by guest , Aug 19, 2008 3:58PM
@34
What's your point? Rarely do someone really need those 150 hours of studying.
Personally 1-2 weeks of intense studying has been enough for each level.
Posted by guest , Aug 19, 2008 4:06PM
250 hours, 53.
& you passed each level with "1-2 weeks of intense studying"? Bullshit.
Posted by guest , Aug 19, 2008 4:11PM
54 I agree totally. Closest I have encountered was an experienced fixed income portfolio manager who passed Level I with a week or two of study. That individual also confessed that he tried doing the same with II and failed miserably. He subsequently went on to pass II and III, but only after putting in the necessary time.
Posted by guest , Aug 19, 2008 4:29PM
Whoever passed with only two weeks of "intense" studying did so without reading the six books in the CFAI curriculum because there is no way anybody could do that much reading in two weeks.
Posted by guest , Aug 19, 2008 4:33PM
@55 Depends on your background. Already had an MBA before taking the CFA. Spent 4 weeks on Level I, 3 weeks on Level 2, and 2 weeks on Level 3 (just barely passed).
Posted by guest , Aug 19, 2008 4:33PM
56 A lot of Level I is basics: time value of money, PV, future value, IRR, compound interest, cost of capital, bond math, foreign currency conversion, basic puts and calls, some basic accounting, basic economics. An experienced fixed income portfolio manager knows all that. He concentrated on ethics, which is not as intuitive as you would think, and looked over the rest quickly. My point is that he was a really special case.
Posted by guest , Aug 19, 2008 4:33PM
I agree with 53, from personal experience. Must have a solid background, like Finance MBA or MS in Finance.
56, does anybody read that crap?
Posted by guest , Aug 19, 2008 4:39PM
57 MBA prepares you for I only. So why 4 weeks prep for I, then 3 weeks for II and 2 for III? Total BS.
Posted by guest , Aug 19, 2008 4:41PM
Funny that I've never encountered anyone anywhere except on these boards that has professed to pass with so little effort. Makes you wonder....
Posted by guest , Aug 19, 2008 4:42PM
60 Not with a Finance and Economic concentration. Covers a lot in L2 and L3 also.
Posted by guest , Aug 19, 2008 4:44PM
62 Just wondering, how would you characterize the focus of LIII?
Posted by guest , Aug 19, 2008 4:46PM
I concur with 57. I passed with about the same amount of work: A month for LevelI, 3weeks for Level II, and the barest minimum for Level III. The Level III was particularly tough b/c I just went thru a mass layoff and I was very distracted.
Also had a Finance MBA. There was nothing on the CFA that I hadn't seen before. The trick was remember stuff that I hadn't seen in a few years.
Posted by guest , Aug 19, 2008 4:58PM
62. Felt L3 was more qualitative than quantitative. Less formulas to memorize and more intuitive concepts.
Posted by guest , Aug 19, 2008 4:59PM
61, maybe youre just a dumbass and hang around dumbasses.
Rutgers?
Posted by guest , Aug 19, 2008 5:02PM
66 or maybe you didn't really pass
Posted by guest , Aug 19, 2008 5:08PM
I just randomly opened the III study guide: You have been asked to design a fixed income risk management strategy. Portfolio $200 million, cheapest to deliver bond has conversion factor of 1.2, futures are priced at 90, have a covariance with cash of .25, variance of .15. Questions: 1) # of contracts needed to hedge using the conversion factor model 2) number of contracts needed assuming BP model with hedge ratio of -2 3) hedge ratio in 2 using regression model 4) # based on market naive model, assuming t-bonds are 102
Oh yeah, those and another 200 questions like them can be answered with a week of preparation.
I rest my case.
Posted by guest , Aug 19, 2008 5:08PM
unreleated, but maybe someone is reading this who is trying to escape compliance:
What would the haircut on an ARS be for the purposes of SEC Net Capital Computation?
Posted by guest , Aug 19, 2008 5:12PM
68, schweiser used to (maybe still does) have a kind of ranking for what kind of questions are going to be on the test. At the seminars, they told you what you had to know, what you should probably know, and what you could ignore.
sorry i didn't study more.
Posted by guest , Aug 19, 2008 5:25PM
@ 68. It's been a while since I was awarded my charter but 200 questions on LIII doesn't sound right, particularly since the morning session is essay. And If I remember correctly, the afternoon session (item sets) equals 180 points but only around 60 questions were asked. Has it changed in the 8 years since I sat for LIII?
Posted by guest , Aug 19, 2008 5:28PM
70 Maybe then you should have amended your "I only studied for a week" comment to indicate that you also had the benefit of the schweser course.
Posted by guest , Aug 19, 2008 5:31PM
68 here. Its been awhile for me as well. I was being fecetious about the number of questions. Totally forgot myself.
Posted by JorgeCad , Aug 19, 2008 6:59PM
Value of CFA equals what you do. Sell side it is priceless - - go for the pain. Buy side - - it is completely worthless.
Sadly us buy guys talk to hundreds of people, do you honestly think we ask if they got a CFA?
Posted by guest , Aug 19, 2008 8:43PM
74 Buy side worthless? Don't you think investors care if the people (the whole chain that is - analyst up to PM) that are managing their money are CFAs?
Posted by Investorcluzo , Aug 19, 2008 8:58PM
based on the above discussion, I have a question: how do we feel about people who put a) MBA or b) CFA on their business cards? discuss...
if the answer is that neither should put it on their card, then isn't it really what's between your ears that matters? feel free to guess which one(s) I have.
Posted by guest , Aug 19, 2008 9:36PM
76 incredibly lame to put MBA on your card. now your vanity plate, that looks awesome, especially if its from a tier 3 school. NtrDmMBA
Posted by guest , Aug 19, 2008 9:46PM
Harvard
Posted by Investorcluzo , Aug 19, 2008 10:12PM
@77 - it was trick question. I think it's incredibly lame to put either on th card, who the fk cares? do you have good ideas and/or insightful observations? that's all that matters in the "real world". as for your 3rd tier school comment - why would anyone a) take the economic hit to sit out two years for a school that doesn't hit the radar and b) I'm not sure how many schools you put in each tier, but you're stretching with that one...oh, and lemme guess: you have a cfa.
@78 - I was referring to mba/cfa issue, I'd rather not rehash the school debate from several months ago...
Posted by guest , Aug 19, 2008 11:03PM
CFA implies that you have attained a standard. "MBA" by itself does not. So put CFA on the card, not MBA. I've only seen Russians do that, and generally its a Pace MBA.
BTW, Harvard MBA to me implies based on experience "I only know big picture, good at theory, bad at execution. I rely far more than you would imagine on the people around me and then skillfully take credit for what they've accomplished". Fortunately this gets them only so far. I have seen so many of them fail. They work very well in consulting and at places like P&G, but in PE for example fall flat on their faces as soon as some heavy lifting is required. Icing on the cake is a total lack of street smarts and therefore very poor negotiating skills.
Posted by guest , Aug 19, 2008 11:20PM
I never required a CFA to get my sweet sweet gig at this awesome multi-billion dollar AUM hedge-fund because I am hedge_fund_baller.
CFAs, MBAs is for pussies and baller-wannabies who can never be able to return the sweet alpha that I generate like a dynamo.
And what are you non-ballers going to do now that the job market has dried up. CFAs or not, MBAs or not they're no jobs for you guys out there. Sucks for you.
respectfully,
hedge_fund_baller
Posted by guest , Aug 19, 2008 11:24PM
@80 - show some respect to we Harvard types.
I am grateful for having gone to Harvard which landed me an awesome job at one of the four megafunds (KKR, BS, TPG / Carlyle). You have no idea how awesome my experience was. I had no prior banking / PE experience before this mega-fund and still I'm doing very well, including with the 'heavy lifting'. Im already a principal and earning $2m+ a year. So if you're bitter about going to some place like Pace for a part-time MBA, don't take it off on us. Otherwise, I'm giong to LBO your ass.
-HBS '05
Posted by guest , Aug 19, 2008 11:28PM
@82: Faggot
Posted by guest , Aug 19, 2008 11:48PM
Cluz, come on. You loosing it? All that matters is good ideas, insights? By your way of thinking you could also then leave titles off your business card. Who cares if you're an MD or an Analyst, its all good, as long as you're insightful? Don't think so.
The reality of course is that job titles as well as credentials like CPA, CFA that imply that some standard has been met, telegraph subtle signals regarding your experience and abilities to customers, peers, whoever. The difference with "MBA" is that there's a total lack of standards so putting those letters on your card would be meaningless.
Posted by guest , Aug 19, 2008 11:52PM
HBS '05: do you even know what LBO means, or is it a term you hear the Chicago, Tuck and Wharton guys throwing around so you repeat it to be cool.
Posted by guest , Aug 20, 2008 12:38AM
79 thanks for the hint on the trick question. your sophistry astounds me.
Posted by guest , Aug 20, 2008 10:35AM
please -- Princeton 06, doing quite well thank you.
Posted by guest , Aug 20, 2008 12:46PM
HBS '05 go get me my coffee you wanker before i throw you out on your arse. And get it right this time or i'll bitch slap you in front of the entire desk!
Posted by guest , Aug 20, 2008 6:00PM
Too long, didn't read.
Passed Level II
Posted by guest , Aug 20, 2008 8:40PM
Passed all 3 levels at the shortest time possible. (Dec06 L1, Jun07 L2, Jun08 L3)
Posted by I am a Dude , Aug 20, 2008 11:46PM
@90 hooray for you wanker
Posted by guest , Aug 21, 2008 12:09AM
Listen up #89,
If you would stop writing about what you are not reading, the rest of us would appreciate it.
Or, we can have Bess hunt your scrawny written posts down via IP and we can give you a Mayo swirly in the bathroom.
Its your call... Start reading and writing about it, or expect some Mayo in the face...
Posted by guest , Aug 21, 2008 2:22PM
#26 Yes, I can see many of them suggesting "very small rocks"
Posted by guest , Aug 21, 2008 3:06PM
Please follow these rules for appending a title after your name:
1. Is it a Ph.D.?
2. Was your Ph.D. is in Physics or Pure Math? Are you or is your advisor well known, even to Iowa housewives?
If so, then, you are Emanual Derman. So, go ahead:
Emanuel Derman, Ph.D.
Otherwise, please resist the urge.
Posted by guest , Aug 21, 2008 3:14PM
#82, you are quite the harvard deuche.
good job, keep it up.
Posted by guest , Aug 21, 2008 5:36PM
It really is amazing. I'm a L3 candidate and I've meet a lot of people in various stages of the curriculum, but I've never meet anyone who has said, "I've passed Level XxX after studying for 3 weeks".
I guess the CFA isn't unlike everything else on the internet. Everyone has a 15" tool, supermodel looks, a new 599 GTB on order, and 163 IQ.
Posted by guest , Aug 22, 2008 9:37AM
96 I agree with you on that, having been through it (successfully). Read carefully though and there's a big qualifier in the boast - studied three weeks, but also took the Schweiser cram course, which focuses on the areas that are likely to be asked (and is actually no picnic, I hear). The person was also a newly minted MBA that works in the field. So rather than prepare diligently, they sprinted at the end and got lucky in the sense that the test included the things that their limited study and academic background happened to focus on. Bet the person is also good at memorization.
Hey: good luck to you. The program has been very good to me career wise.
Posted by guest , Aug 22, 2008 9:44PM
HBS '05 - sounds like you're a frustrated mail boy who only made it "into" pe because you got sucked along due to a family members previous hardwork. "LBO my ass" -- geesh, when you can qualify for a jumbo mortgage without mommy and daddy's signing for you - then call me.
Definitely "behind the curve"....
Posted by MuniShe , Aug 23, 2008 8:32PM
Total late, but thankfully made it through level II, one more to go...