How was the CFA level 1 Dec 2006? how hard was it? how long did you study?

Question

im taking level 1 in june 2007 and im overwhelmed, any feedback will be great. thanks

Answer 1

I took it this past weekend and ditto the above comments. The test will throw anything at you. Two cliches come to mind about the test: inch deep and a mile wide; devil's in the details. There were no hard calculation questions. I recommend getting the Schweiser Secret Sauce book. If you know 90%+ of everything in this little manual, you'll be good. I got it late in the game and didn't study it that much. After the test, I looked at it and every page provided solutions to 1-2 questions. Here's how I broke it down:

Ethics - just read the examples in the CFA Institute study guide and you'll be good.

Accounting - hardest portion I thought; there were however many easy questions on LIFO-FIFO adjustments and alot of diluted EPS calculations; know ever possible variation of the DuPont formula cold (many questions involved backing out the answer from this formula)

Macro - very straightforward with no room for interpretation in the questions; understand Classical, new Classical, Keynesian differences (I had 3 questions on this); understand how unexpected vs expected changes in fiscal/monetary policy affect x,y,z

Equities - 2 basic CAPM calculations; no DCF calculations; several questions on DDM (with and without growth); also had a sustainable growth rate question

Fixed Income - 2 basic yield/price calculations, 6+ questions on convexity; 2 on duration; rest were concept related

Derivatives - No calculations that I can remember, just the concepts; know what occurs with certain Swaps (i.e. in a currency swap, know whether or not the principal is exchanged up-front) - this was asked in twice in some form.

Alternatives - mostly real estate calculations; they gave you a table and you were asked for a valuation; 1-2 thought questions about investing in hedge funds

Portfolio Management - very, very basic; a couple of questions (non-calculation) that involve understanding the benefits of diversification (i.e. given two stocks weighted equally in a portfolio with corr of less than 1, with returns of 10% and stdev of 15% will have a portfolio that has a)return of > 10%, b) return of < 10%, c) stdev > 15%, d) stdev < 15%.

I understand the overwhelmed part. I signed up for the test in June, studied all summer, but didn't have a chance to study for the past 2 months. I'm at a full-time top10 MBA program that has had a lot of academic requirements recently in addition to an internship search so I was pretty smoked after taking it.

Answer 2

I can't talk about this Dec exam because I didn't take it, but I passed Level 1 last year and will be taking Level 2 in June. 1st thing, there are no shortcuts, they won't ask everything, but they will ask anything. 2nd thing, if you start now and get in a good 10-15 hours a week, you have enough time to prepare. Finally, LEARN THE LOS! As an example, when I took it, I spent over an hour making sure I was an expert on 3 different ways to compute the mean. The LOS said to compare the methods, not calculate, define, or discuss. When they asked me about it on the exam, the question asked me to compare, no calculation needed, 1 hour wasted. Feel free to email with more question about my experience.