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CFA level III in 2 months
Uncategorized March 31, 2014 Comments: 4
April month is coming and if you have done only Behavioral Finance and little bit of Private Wealth
reading, then this post is for you. You may be one of the guys who had finished CFA level I and CFA
level II by this time i.e. 2 months before the exam. But somehow youre not finding the same
enthusiasm to cover the CFA level III syllabus. It happens with many guys for different reasons. The
primary reasons are: (1) Candidates think that they would prepare comprehensively for CFA level III
exam because it has a subjective exam and they tend to spend too much time on earlier readings. (2)
Candidates find first few readings quite boring and that hinders the speed. (3) They feel complacent
after CFA level II exam and do not give too much time and effort to CFA level III exam. (4) They find
curriculum easier than CFA level II and never have the same urgency to finish the exam as they had in
the level II exam. (5) They think that they are not good in subjective exam and their passing probability
is low and think that they may just gain experience in the first attempt and then give it a full effort in
the second attempt. And there are many such reasons like getting married, change in jobs after level II
and so on. Whatever be your reasons, you have one thing in common which is the time left for the
exam. Now you have to finish the curriculum in 2 months and are wondering how to go about this.
Every candidate is different and has different strengths and weaknesses. But I will provide a broader
framework which could be helpful for you to finish the curriculum and even revise it twice before the
exam date. You are free to modify it according to your strengths and the syllabus already covered by
you. I am assuming here that you havent touched anything and you have to start from tomorrow with
only 60 days left for the exam.
First of all we need to be aware of the pattern of CFA level III exam. You may also like to go through
this post about level III exam (http://konvexity.wordpress.com/2013/08/21/strategy-for-cfa-
level-iii-exam/). As you are aware that there are 18 study sessions in CFA level III. Now you need to
know what all topics are most likely to show up in the morning essay type exam and what all topics
you would find in the afternoon item set based exam. You can refer to the table given below. You will
find 2 item sets of Ethics and 1 item set of GIPS in afternoon exam and for the rest of the subjects, it can
vary.
Study Session Study Session Subject Moring Exam Afternoon Exam
1
Code of Ethics and Standards of
No Yes
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Code of Ethics and Standards of
Professional Conduct
2 Ethical and Professional Standards in
Practice
No Yes
3 Behavioral Finance Yes Very less chance
4 Private Wealth Management Yes May be
5 Portfolio Management for Institutional
Investors
Yes Very less chance
6 Capital Markets Expectations in
Portfolio Management
May be May be
7 Economic Concepts for Asset Valuation
in Portfolio Management
More likely May be
8 Asset Allocation May be May be
9 Management of Passive and Active
Fixed Income Portfolios
May be More likely
10 Portfolio Management of Global Bonds
and Fixed-Income Derivatives
May be More likely
11 Equity Portfolio Management May be More likely
12 Equity Portfolio Management May be More likely
13 Alternative Investments for Portfolio
Management
Very less chance More likely
14 Risk Management More likely More likely
15 Risk Management Applications of
Derivatives
May be May be
16 Trading, Monitoring, and Rebalancing May be May be
17 Performance Evaluation and Attribution May be More likely
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18 GIPS No Yes
Essay based morning exam - Both morning and afternoon exams will have a total score of 180. In the
morning exam. there will be 9-13 question (each question carrying 2-4 parts and the weight varying
from 10 to 40 marks). The morning essay exam will be loaded with 3rd (Behavioral Finance), 4th
(Private Wealth) and 5th (Institutional Management) questions. These three readings will have weight
around 45%- 50% (80 to 90 marks) of the morning exam. So, you need not worry about the essay
based exam. Just ace these three study sessions and youre pretty good for the morning exam. The
other questions may be from other study sessions like 7th, 8th, 8th, 11th, 12th, 14th, 15th, 16th and
17th. But you need not worry too much about those sessions. Just study those sessions as if there would
be only multiple choice questions asked from those topics.
Item-set based afternoon exam - It will have 10 item sets just like CFA level II exam and a total of 60
questions. 3 item sets from Ethics and GIPS. So, you need to study those sessions thoroughly. Rest 7
item sets will come from other study sessions. Last year there were 2 item sets from Alternative
Investments. But this time they have reduced one reading of AI so you may not find two item sets in
this years exam.
Strategy for morning exam - Go through all the previous actual CFA papers. You can find last 3
years actual morning exams (2011-2013) on CFA website. After going through morning exams, you
will get to know what kind of questions would be asked from every reading. Before starting any topic,
you should go through the exams to see what is important and what type of questions would be asked
so that you can prepare accordingly. The major problem with morning exam is that it is lengthier and
most of the candidates fail to attempt the full exam. Your goal should be to not commit that mistake.
For that, you need to practice enough number of essay based papers and write only the model answers
which have been asked in the questions. The best way is that when you attempt mock exams, give
yourself 2 hours instead of 3 hours. This is important because on the main day you can very easily lose
30 minutes. In private wealth and institutional management reading, you need to solve for the interest
rates. If you miss one or two values, you need to solve that question again and that can take good
amount of time. So, try to finish your mocks in 2 hours so that you can easily finish your actual exam
in 2.5 hours and can further improve your answers in last 3 minutes. They will give you marks on the
steps and not on the final answer. So, do show all the steps in calculation. You can learn more about
that only by going through previous actual exam papers.
Strategy for afternoon exam - You will find this paper relatively easier and also less lengthier than
the morning exam. But that generally leads to silly mistakes. It can easily happen that you may end up
finishing in 1.5 2 hours. But you should not make such mistake. Give adequate time to each item set
(around 15 minutes) so that you do not miss the fine points asked in the questions and do not commit
the silly mistakes. Practice is the key here. This exam in more important than the morning exam
because in the morning exam, candidates generally get lower marks than the afternoon exam. If you
perform excellent in morning exam and below average on afternoon exam, then you may not pass. But
if you perform below average in morning exam and excellent in the afternoon exam, then you are more
likely to pass. I couldnt finish my morning exam. I left 20 marks of questions unattended. But I
performed really well in afternoon exam and I was sure after the exam that I would pass easily. Your
target should be to get 80% marks in the afternoon exam.
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How much time should be given to each study session: First of all, you should try to study
everything from the CFA curriculum books. Last year, they asked many questions in the morning
exam which were not very well covered by the 3rd party notes. You must be thinking how can you
finish the curriculum books in 2 months. But it is possible. 3 books out of 6 books have less than 400
pages and rest 3 books have less than 600 pages. The comprehension will not be that tough as you had
already passed CFA level II exam. You can easily finish 100 pages in 8 hours. So, you will be needing
around 200 hours for finishing the first reading. It is very important to prepare your notes as you finish
first reading so that you can do second revision and third revision in 50 hours and 20 hours
respectively. You must spend around 80 hours for practicing question. You may spend 40 hours for
essay based exams and 40 hours for essay based exam. That many hours will definitely prepare you for
the final exam. So, you need around 350 hours. But if are using 3rd party notes, then you can decrease
that time by 100 more hours as it will take less time. But you must not cut your practice time for essay
based question and item set based questions. So, if you can devote 6 hours on an average daily for next
60 days, then go with the curriculum books. But if you cannot devote that much time, then use 3rd
party vendors notes. You may also do combo as well i.e. you can study from 3rd party notes and do
questions from the curriculum book and do blue box example. That would be ideal as less time is left.
Study
Session
Study Session Subject Number of hours
needed for first
reading
Time for
practicing
questions and
mock tests
1 Code of Ethics and Standards of Professional
Conduct
6 to 9 4
2 Ethical and Professional Standards in Practice 4 to 6 4
3 Behavioral Finance 8 to 12 4
4 Private Wealth Management 16 to 24 8
5 Portfolio Management for Institutional
Investors
10 to 15 6
6 Capital Markets Expectations in Portfolio
Management
6 to 9 3
7 Economic Concepts for Asset Valuation in
Portfolio Management
5 to 8 3
8 Asset Allocation 8 to 12 4
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9 Management of Passive and Active Fixed
Income Portfolios
7 to 10 3
10 Portfolio Management of Global Bonds and
Fixed-Income Derivatives
7 to 10 3
11 Equity Portfolio Management 7 to 10 3
12 Equity Portfolio Management 4 to 6 2
13 Alternative Investments for Portfolio
Management
6 to 9 4
14 Risk Management 10 to 15 6
15 Risk Management Applications of Derivatives 15 to 20 8
16 Trading, Monitoring, and Rebalancing 8 to 12 4
17 Performance Evaluation and Attribution 8 to 12 4
18 GIPS 10 to 15 4
The range given in the table is range of the number of hours needed if you are studying from 3rd party
vendor to the number of hours needed if you are studying from curriculum books. If you are studying
from 3rd party vendors, then you should be doing Risk Management in 10 hours and if you are
studying it from the curriculum books, then you should be able to finish it in 15 hours.
Test Series: We are coming up with a test series. There will be 20 sectional tests in the test series. 8 tests
for essay based questions and 12 for item sets based questions. Each test will be of 90 marks and of 90
minutes duration. These 20 tests will cover the entire course comprehensively. The cost will be $20 for
the test series and that will be available on our website from mid of April. We will also be providing 1
full mock test but that test will not be part of the test series. If you want some tests for practice, you
may subscribe for our test series (http://konvexity.com/cfa-exam/levels) in mid of April.
Final Words: Do not lose your focus. You just need to focus for 2 more months and then you will be
over with the certification. Visualize CFA after your name. That should give you enough motivation.
Trust yourself. Never ever think that you will not be able to pass the exam if you are not so good in
subjective papers. This subjective exam is a different one and it is more like that of an objective exam
rather than a subjective exam. You need to develop hunger for passing the exam. If you do not believe
in yourself then who else will. Ignore the naysayers who think that it cannot be done in 2 months. Pay
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no attention to the people who say that it cant be done. Study diligently for next 2 months and I am
sure that you will have the last laugh. Best of luck. I hope to see on the other side in coming month of
August.
4 thoughts on CFA level III in 2 months
1. Saurabh April 1, 2014 at 5:53 am Reply
Very well written.
2. Nikhil Yadav April 10, 2014 at 12:30 pm Reply
Many Thanks for the intricate analysis, would certainly help in strategizing better
3. How to finish CFA curriculum in 2 months? | konvexity April 24, 2014 at 9:15 pm Reply
[] can go through this article for a detailed strategy to complete curriculum for CFA level III exam
in 2 []
4. Manuel June 9, 2014 at 5:46 pm Reply
Well, I did it n one month but mixing curriculum with schweser. Obviously, I studied GIPS,
Derivatives, Fixed and Ethics from the curriculum. The rest from Schweser. Now, Im waiting for
the results. Ill let you know in August how well I did.
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