Optimal Study Strategy for Clearing CFA Level 3 Exams
Introduction
Firstly, congratulations to those who successfully passed CFA Level 1 and Level 2. However, level 3 is not child’s play. Even though you are full of confidence after passing Levels 1 and 2, this stage demands a different approach. What sets Level 3 apart is the need for a deep and comprehensive understanding of principles, as opposed to strategies. The emphasis is on in-depth comprehension rather than rote learning.
Understanding the Transition to Level 3
Level 3 is significantly different from Level 2. Level 2 focuses on quantitative aspects with numerous chapters, whereas Level 3 is qualitative with fewer chapters but requires a thorough understanding of each. Here’s a brief introduction to the transition and key points to remember:
No substitute for Curriculum in this level. Don't jump into studying immediately after getting Level 2 results. Wait for a few weeks to gather your enthusiasm before starting. Behavioral Finance is a critical subject that will help you understand investor behavior and market dynamics. Expect it to be challenging and require multiple readings. Completed subjects in their entirety by December or January to ensure a strong foundational understanding. Allocate a full month to writing mock tests. Practice consistently, and utilize resources like CFA Institute, Wiley, Schweser, and Finquiz. Practice questions after each subject to gauge your understanding. Write the final exam with a pencil, as this simulates exam conditions better. Create one-page notes per day, which can be reviewed before the exam to boost your speed. Manage stress levels by avoiding unnecessary pressure. Stress does more harm than good. Don't overlook Ethics.Behavorial Finance is your new lifeline for the next year.
Why Mock Tests Are So Important
Mock tests are crucial for preparing for the CFA Level 3 exams. They offer a real-time experience and help you cope with the added time pressure you will face during the actual exam. Completing mock tests regularly can significantly boost your confidence and preparedness. In my personal experience, the CFA Test Series was highly beneficial. I completed 22 mocks from AMPM, writing three-hour papers every alternate day, alternating between the AM and PM sessions. This practice helped me immensely in handling the exam pressure.
Key Subjects and Approach
The subjects in Level 3 require a different approach compared to previous levels. The focus is on principles and in-depth understanding. For example:
Behavioral Finance: This subject is quite challenging and requires at least three rounds of reading to make sense. It is a significant portion of the exam. Equity Derivatives: These topics were the best for me, and I enjoyed them. While Equity Derivatives were great, I was not a fan of Econ.Practice questions and reviews are essential to reinforce your understanding of each subject.
Personal Notes and Exam Tips
I found it helpful to write one-page notes daily, covering various subjects. This practice can be a valuable resource when reviewing before the exam. It also increases your speed during the exam. Additionally, writing the exam paper with a pencil is a great way to simulate the exam environment and reduce any potential nervousness.
Conclusion
In conclusion, clearing CFA Level 3 exams requires a dedicated and structured approach. Focusing on the curriculum, practicing mock tests, and managing stress levels are key to success. Behavioral Finance should be your priority, and a disciplined study routine with plenty of practice will take you a long way towards success.