To say the least, the CFA Exam is challenging. Why do so many students fail the test? How hard is CFA level 1, with average passing rates of about 50%? In this post, we’ll look at the most typical reasons why people fail the CFA level 1 test.
How Hard is CFA Level 1?
How hard is the CFA exam? Only those with a strong work ethic and enough study time may pass the CFA Program exams. The tests have always been offered in June, with the exception of Level I, which may be taken in December. At all levels, the CFA exam will be totally computer-based by 2021. Level I CFA examinations will be conducted four times a year. As a consequence of the 2020 postponements, two additional temporary 2021 windows were announced in March and January.
Even though an exam may be retaken, it’s rare for a test to need more than 300 hours of study time. Because of the time and effort involved, many candidates abandon the CFA Program after failing one of the levels. To become a charter holder, students must pass all three examinations and have at least four years of professional experience in investment strategy.
Exams take a lot of time and effort. In December 2020, just 49 percent of pupils passed the Level I exam. 3 Passing all three exams is feasible with the right plan and the tenacity to remain with it. The number of people who took the exam in 2018 was the highest ever. The number of students who passed the test remained consistent with previous years. The major driver of this development was the influx of test-takers from Asia. The Institute now has test centers in 91 different countries and territories.
Quantitative techniques, economics, financial reporting and analysis, corporate finance, equity investing, derivatives, alternative investments, portfolio management, and wealth planning are just a few of the subjects covered in the 6-hour CFA test.
The CFA Institute’s books include a lot of information that isn’t required for the exam. For many candidates, Schweser’s publications serve as an alternative source of preparation resources. Classes, DVDs, and online quizzes may all help with exam preparation. Candidates who employ a variety of study approaches and test prep materials are more likely to pass the exam.
According to the CFA Institute, pass rates for Level 1 and other CFA Institute exams are typically between 40% and 50%. Pass rates were far higher when the examinations were first established in 1963, but they have been continuously declining since then. Level 1 was completed by 49 percent of candidates who took the December 2020 exam. There’s also the reality that between 10% and 20% of candidates who register for the exam fail to show up on the day of the exam.
To make things worse, the test questions are designed to undermine participants’ self-confidence. As a result, students should take numerous CFA Level 1 Mock Exam to get acquainted with the kind of questions they may encounter on the real exam. Level 1 consists of 180 multiple-choice questions, down from 240 in 2011 to 180 in 2021. Because “all of the above,” and “none of the above” are all valid solutions in Level 1 multiple-choice questions, it is critical for candidates to read each question carefully. The time limits of the test enhance candidate anxiety.
Why Do People Fail the CFA Level 1?
Failure to put in enough time to study
According to the CFA Institute, candidates should allocate at least three hundred hours to prepare for each level of the CFA exam. Finding a healthy balance between job, personal life, and academic pursuits can not be easy. Businesses look for someone with a strong work ethic and a devotion to their education when hiring new employees, and CFA charter holders fit the bill well.
At this level, students are introduced to fundamental financial concepts and principles. Anyone who has previously studied finance will have prior experience with a significant portion of the material that is taught in Level I. Because of this, the amount of time required to study for the CFA Level I test is highly variable from person to person, depending on the individual’s prior knowledge and experience in the field.
If you were unfamiliar with the bulk of the content, the estimated 300 hours of study may be an underestimate. In the event that you were taken aback by the amount of time commitment necessary to successfully finish Level I, the solution is as simple as adding more hours to your calendar.
It is reasonable to expect that one’s professional responsibilities will, at times, take priority over their personal commitments. No matter how much we would want to devote our time to study, we just do not always have the opportunity to do so. If anything like this has happened to you, there is a chance that you will be given more time to study and get yourself entirely ready for the next sitting of the test.
An effective tactic is to get a head start on the majority of the other applicants by beginning the process earlier than they do, moving more quickly through the material, and engaging in more practice than they do. You only need to work on improving the areas in which you are weaker, keep the areas in which you excel, and make sure that you have taken into account any modifications that have been made to the curriculum.
Failing to fulfill expectations
On the day of the exam, the capacity to keep one’s anxiousness under control is one of the most important skills to have. Studying for the examination is the single most significant thing a candidate can do to compete with them. The probability of you being affected by worry is decreased when you have a strategy that has been well developed.
Due to the limited amount of time available, there will be some students who are unable to finish the CFA exam. If you believe that this will be difficult for you, you may consider dividing the exam into ten different groups of ten questions, each of which should have a time restriction of 15 minutes. It is essential to identify the questions that are going to be the most challenging and save them for the end of the examination. If you don’t, you run the risk of becoming distracted by trying to solve a problem that is above your capabilities, which will cause you to lose out on solving problems that are simpler.
Overthinking chosen answers
If you are able to get a score of at least 70 percent on practice exams and then maintain that score throughout the real test, you are well on your way to achieving the desired result. Also, make sure you stick to the study schedule you made for yourself. Do not begin to go over your answers in your head if you are feeling anxious about the exam.
The first answer you think of in response to a question is going to be right around 70 percent of the time. It is important to keep in mind that if candidates begin altering their replies, they may leave a trail of wrong answers as a consequence of overanalyzing the question. We strongly recommend that you never change your answer unless you are very positive that you have made a mistake in the past.
The Learning Outcome Statements (LOS) are statements that outline what a candidate should know about each topic. These statements are based on the Candidate Body of Knowledge, which was produced by the CFA Institute. Include them in your study approach since they help you zero in on the information that is going to be most relevant to the exam.
Even though instructor-led test prep programs might potentially help you learn the material more quickly, it is just as vital to make the most of the time that you do not spend in class. Taking too many notes is a common error that people make. Attempting to create your own notes for the whole of the class is a precarious tactic that will likely result in failure. Due to the comprehensive nature of the CFA Program material, it would be impossible to compile your own notes from scratch without spending much too much time doing so.
Either you did not go over the whole curriculum, which resulted in knowledge gaps, or you did not have the time to appropriately utilize practice questions and mock examinations, and both of these things will be considered issues. If you are able to commit as much time as possible to learning and practice, your chances of being successful will be significantly increased. You should devote the whole of the final month of the school year to studying and getting practice.
Failure to study at an appropriate pace
Assuming you start studying six months before the exam, you will need to dedicate around 15 hours of your time to study each and every week. As more time passes and the initial enthusiasm for learning wanes, this might result in a reduction in the amount of time spent studying. When candidates take into consideration the demands of their day jobs in addition to their social and family responsibilities, it may be challenging for them to maintain the level of devotion necessary to complete the program successfully.
If you allow yourself to get behind in your studies, you will rapidly build up a backlog of topics that need to be addressed, which will result in an increase in the amount of time that has to be committed each week. The amount of mental strain caused by studying becomes intolerable. During the last month of the application process, it is not uncommon for applicants for this job to still be seeking to acquire new information.
As was said before, you should dedicate the last month of preparation time to studying and doing practice problems in order to give yourself the greatest possible chance of passing the examination. Again, the good news is that if you belong to this group of unsuccessful candidates, it is likely that you already possess a significant portion of the requisite level of technical skill. You should plan to devote the majority of your time to studying previously covered material and working through sample test problems until putting what you’ve learned into practice seems completely natural to you.
On the day of the exam, you will need more than a little bit of luck to perform well. Because of the limited amount of time available and the length of the examinations, not every topic that you have been studying will be evaluated. Because of the fact that every candidate has their own unique set of strengths and limitations in relation to the many academic areas, a test that one student finds challenging may be very easy for another student.
A significant number of students will be holding out hope that specific topics will be included on the examination, and even more, so that they will not be included at all. Despite the fact that the exam from this year assessed you on material related to the worst-case scenarios you could imagine, you should never give up hope of doing better on the exam from next year. As a result of the extra time you have to study the topic, you should have fewer areas of weakness and be less dependent on the chance if you choose to take the test more than once.
Performing poorly on the big day
Exam-day nerves are something that every student will inevitably experience at some time in their academic career. Your only lines of defense against them are a good test strategy and adequate preparation. The less probable it is that you will let your nerves get the best of you, the more prepared you will be.
If you do well on practice exams, you should also perform well on the real thing. When people ask us for advice on how to improve their chances of being hired, we often tell them to go for a score of at least 70 percent. If you are able to exhibit this throughout the exam, you have a decent chance of passing as long as you can keep your calm throughout the process. Remember that if the exam proves to be more challenging than you had expected, this is probably going to be the case for everyone.
Candidates who haven’t studied properly and don’t have an exam plan are more likely to be adversely impacted by a more difficult test than those who have done so. This is because candidates who have done so are more prepared for the challenges they will face. If you’ve done your homework, think of a challenging exam as something that will trip up the pupils who aren’t as strong or as well prepared as you are.
Bear in mind that you need to stick to the testing plan that you developed. Don’t start second-guessing yourself or your answers just because you’re nervous about the exam. When you answer a question, you will be successful on the first attempt the vast majority of the time. Whenever a candidate starts to waver in his or her opinion, the first thing that usually happens is that they go from the correct answer to the incorrect one. You should never change your answer unless you are very certain that you have made a mistake in the first place.
Due to the limited amount of time, there will be some students who are unable to complete the exam. The majority of the time, this is because the student did not adequately prepare for the test or did not have a plan for the exam. It is possible that if you divide the exam up into sections consisting of ten questions each and give yourself 15 minutes to complete each section, you will be able to breeze through the test more quickly. Keep in mind that every question in the marking guide has the same amount of weight.
The questions that are going to be the most challenging should, as a standard practice, be saved until the end of the exam. Those who don’t run the danger of getting lured into a question that goes on for longer than the allocated minute and a half to answer it. When this occurs a limited number of times throughout the test, the difficulty of the test increases, which increases the likelihood that you will fail to get easy results at the end of the examination.
Another potential pitfall for you would be to perform more slowly on the real exam as compared to how you performed on practice exams. Students can feel inclined to verify their answers again when they are sitting for the actual exam. If this is your situation, then you must ensure that you complete the exam before going back to review your answers. If you give yourself three hours to complete a practice exam, you simply cannot afford to be careless when it comes to the real thing.
We are aware that the CFA Institute looks at applicants’ ethical scores before choosing whether or not to pass them before passing candidates who are on the cusp of passing. It is quite possible that you did not pass the test because of your low score on the Ethics section even if you have a high banding (10 or 9). To increase your chances of remembering what you’ve learned, put off studying ethics until a final couple of months before the test.
In order to be well prepared, you have to study Ethics using the book provided by the CFA Institute. Then, the most important thing for you to do is to practice answering as many questions on ethics as you possibly can. To conclude, it is important to review the material one more time the day before the test in order to improve your ability to remember information from short-term memory.
Cramming too hard before the big day
Students’ chances of doing well on an exam might be hurt if they put in an excessive amount of study time the night before the test. After a long day of studying and a restless night’s sleep, you run the danger of entering the exam room feeling mentally exhausted. This may make it more difficult for you to perform well. When candidates are overworked and weary, the likelihood of them making mistakes increases.
When it comes time for the exam, you want to be sure that your mind is functioning at its peak. The day before the exam, it is strongly recommended that you review some of the most challenging aspects of the course material, such as the Ethics material. Avoid taking practice tests since they will mentally drain you and make you less prepared for the real thing. The night before an exam is an important time to ensure that you get a sufficient amount of sleep.
What Should You Do After Failing the CFA Level 1?
Analyze Your Performance
According to the CFA Institute, candidates who do not pass the CFA exam are provided with their test results as well as a breakdown of how well they performed in each subject area. Don’t forget to go through this material so that you may have a better understanding of both your strengths and your weaknesses. You are going to put all you’ve learned to good use when you go on to the next step.
Examine Your Studying Methods
No matter how hard you worked the previous time around, you were not successful this time around and did not pass the test. You should examine your method of study to see if there is a better way for you to learn the material and retain it for the CFA exam.
CFA candidates not only have to contend with the challenge of learning a substantial quantity of material, but they also run the risk of having their study plans disrupted by events that are beyond their control. The CFA Institute’s Learning Ecosystem is an all-encompassing educational platform that includes supplemental learning tools, and students of any level may utilize it.
You will be able to plan up your study schedule in advance using this method, knowing precisely how long it will take you each week to get through all of the material. You should have at least four weeks of wiggle room built into the schedule, giving you plenty of time to complete studying before the exam, so that you don’t feel rushed. There is plenty of wiggle room in this schedule for extra study time, as well as for unplanned events that could otherwise derail your original plan for studying.
In addition, the CFA Institute recommends that students regularly evaluate their work via the use of progress assessments in order to track their growth. It’s not a good idea to wait until the week before a test to find out that you don’t understand a topic you’ve been studying for.
Take a CFA Exam Prep Course
When you’ve already spent over $1,200 on the test, bought approved study materials, and are about to spend another $700 to $1,000 on the exam, spending hundreds more on a CFA prep course may not seem like it’s worth it (based on how far in advance you register).
5 If you pass the test, you will be able to advance in your field and start making more money sooner, despite the fact that it will cost you a lot of time and money to prepare for it. Courses that effectively prepare students for examinations could pay off in the long term.
Training may either take place in person with an instructor or remotely via the use of the internet. In addition to the final examination, practice tests, continuous quiz items, and a well-structured study program, the course will also feature the following characteristics: practice tests, practice tests, continuous quiz items, and a well-structured study schedule.
If you enroll in a course, you’ll be able to zero down on your objectives and improve the areas in which you struggle. You should look for a course that has a money-back guarantee if you don’t perform well on the exam, provided that you follow all of the directions for the course exactly as they are written. Conduct in-depth research to decide which of the potential solutions is most suited to your needs. The Certified Financial Analyst Society of Minnesota keeps a list of certified service providers updated and available on its website.
Make a Strategy for the Exam
You are going to need both a study plan and a strategy for when you actually take the exam. If you didn’t come up with a plan for the exam the last time you took it, this step will give you an advantage over the other competitors. You should consider rearranging your study plan after taking a test so that it takes into account the aspects of the examination that you found to be easier and those that were more challenging for you.
Here are a few pointers to help you ace your next test:
- You should be informed that forty percent of the questions on the exam will be fundamental and basic, fifty percent of the questions will be quite challenging (and ten percent will be difficult), and the remaining questions will be difficult.
- When organizing your time for the test, you should take into consideration the 40/50/10 framework. You should aim to cover all of the information in three separate passes, beginning with the questions that are easier to answer and working your way through them as quickly as you can. On the third and final pass, you should check your answers one more time.
- It is time to move on if you are taking an excessive amount of time to react to a question. There is a narrow line to walk between being able to breeze through the exam in a timely way and speeding through the questions without giving them any attention in the process.
- Take a practice test to get yourself ready for the real thing. Because the CFA tests are now administered entirely by computer, you will need to determine in advance how much time it will take you to drive to the location where the test will be administered. You should get some experience behind the wheel before the real thing.
How hard is CFA level 1? The answer is that it is very difficult! CFA exam difficulty often prevents candidates from taking this exam. However, by understanding the reasons why people fail the CFA level 1, you can completely build up an effective studying strategy and then pass it.
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