hi,
can someone explain to me why I got this question below wrong. if I was given a cfa exam by a friend to help with my study, how I am to know that the particular exam they picked is actually the real one that the CFA intitute will use? especially when the question states that my friend pcked from an airport and doesn’t say where(could be Timbuktu for all we know, and what are the chances that’s the actual exam??);
[question and answer removed by admin]
Post your results here… good luck everyone! Try to stay sane until tomorrow.
Hello: what is the best way to determine the 5-year average growth rate of a series of annual EPS numbers that are negative and become less negative with time? For example:
-79.23
-55.32
-47.29
-2.64
-1.72
-1.93
-0.39
-0.03
Some kind of CAGR is actually more what I am looking for but I’m unsure this can be done with negative numbers. My best haphazard guess of obtaining some kind of usable answer is: 1) determine the %-change between years, 2) determine average of the %-changes
Any help is appreciated! Thanks!
Level 1 - 42%
Level 2 - 46%
Level 3 - Available 11 August
Okay, straightforward question here. I’ve just passed CFA Lvl 1 and i know its nothing compared to level 3. Just hoping some insights from people whom already passed it several years ago. What does level 1 give you? Some sudden advance in career? More income? More networks? Or else?
The changes to Level I of the CFA® Program curriculum for 2016 include one new reading and several LOS changes.
For full details on what has been added, removed or changed you can email me at info@ift.world
If you have any comments or questions please email me at info@ift.world
I have completed Ethics and FRA. Initially was thinking of completing the first 2 readings of quant (readings 5 and 6) and then moving on to Corporate Finance and onwards and then finishing up with the remainder of quant and econ.
However, I figured to ask AF community as what would be a ‘better’ order for better effectiveness of studying.
Given that I have completed Ethics and FRA to date, what do you think of the following order:
Equity –> Derivatives –> Alternative Investments
Quant readings 5-6 (TVM, DCF)
Corporate Finance –> Portfolio Management –> Fixed Income
Remainder of Quant
Economics
Am using Elan/Wiley videos to go through the study guides. Find their videos very useful to date (Olinto & Bassit are awesome) and keeps the studying active.
Feedback much appreciated!
I’m really struggling on this section. I’m ok nearly all the way up to probability, anything past there I’m really struggling to grasp. It’s like double Dutch to me.
I’m a bit worried if I’m struggling on the quants at level 1, is it even feasible for me to be attempting the CFA. I work as a financial planner and do not have any finance related degree.
Has anyone found themselves in a similar situation?
Yes, everything is important, however, some items are just a little too much to swallow. Too much time, not enough reward for the effort.
For me:
Bayes Theorem - this was never ending trouble for me. I’d get it, then a few weeks later it would slip away.
Advice for those who just passed the Level I exam
Passing the Level I exam is the first major milestone on your journey towards the CFA charter. It is a major accomplishment and I’d like to congratulate you. At this stage you might be wondering whether to take the Level II exam in June 2016 and if so, when to start studying?
Whether or not to take the Level II exam in June 2016 should depend on the following:
1) Did you enjoy the Level I material and are you still excited about pursuing a career in investment management?
2) Given your personal and professional commitments, will you have enough time to study for the Level II exam? The minimum required study time will vary from person to person but I’d say the average candidates needs roughly 400 hours.
If you enjoyed the Level I material, are excited about expanding your knowledge of investment management, and will be able to make time to study then you should take the Level II exam in June 2016.
Before addressing the issue of when to start studying, I’ll make some high level points related to the Level II exam.
· Level II is significantly more quantitatively intense relative to the Level I. Specifically, there is an emphasis on pricing and valuation across multiple topics.
· Some candidates might have cleared Level I by slogging in the last few weeks; this strategy is much less likely to work at Level II.
· Working through curriculum questions at Level I was important. At Level II, I’d say it is critical.
Given the above I’d suggest you start you studies as early as possible. If time is on your side you have the luxury of being able to properly understand Level II concepts. You’ll enjoy the material and learn a lot more this way. The alternative is that you wait for the last few months and then cram with the sole objective of passing the exam. Unfortunately many people follow this ‘strategy’ but it is not the recommended approach.
Good luck with whatever you decide to do.
Regards,
Arif Irfanullah, CFA
Advice for those who just failed the Level I exam
If you failed the Level I exam it is natural to feel disappointed… but you must put this temporary set-back behind you and move on.
You might be thinking about whether or not to continue with the CFA Program and if so when to re-take the exam.
Let us consider the first question: whether to continue with the CFA Program. For those who did not pass, the typical advice is to keep trying; however, I suggest a more thoughtful approach. Put the result on the side for a moment and ask yourself whether you really enjoyed the subject matter? Also do a post-audit on why you did not make it. Was it because you did not have enough time to prepare for the exam? Or did you have a very hard time understanding the concepts. Is the CFA Program aligned with you career aspirations? Carefully thinking through these questions will help you decide whether or not to continue with the program.
If you fundamentally enjoyed the material and you have an interest in investment management then I’d recommend that you continue. The next question is when to take the exam. If you failed with a relatively high band (6 – 10) and have time to study/practice over the next few months then take the exam in December 2015. For a given calendar year, the curriculum for the June and December is exactly the same. If you failed badly (band 5 or below) and/or don’t have much time to study/practice then I’d suggest retaking in 2016. Keep in mind that 2016 curriculum has changed a little relative to the 2015 curriculum.
If you did not enjoy studying the Level I curriculum and you are not particularly interested in investment management then I’d not recommend continuing with the CFA Program. This might sound harsh but in the long-run you are much better off pursing a line of work that you enjoy and where you can make a decent living.
Good luck with whatever you decide to do.
Regards,
Arif Irfanullah, CFA
For those thinking about sitting Level 1 in 2016, there has been a number of changes to the Level 1 CFA curriculum from 2015 The blog post below has a link to a free summary of these changes:
http://bit.ly/cfa-level1-curriculum-2016
Apptuto
I thought I’ve benefitted from AF to some extent and would like to give back… so I just wanna share my experience on how I prepared for my Level I and passed with flying colors in a single attempt. I took Level I in Jun 2012 and the passing rate was 38%.
–
for me the key to succeeding level I with all >70% was to deeply understand the concepts and became 100% familiar with the whole materials.
Ingredients:
I mainly used Kaplan Schweser books and only referred to CFAI textbooks when there were materials I couldn’t understand from the Kaplan books
Duration of study:
I started in the second week of Feb I think (I registered on 6 Feb 2012), so it was around 4 months. Contrary to popular opinions, I revised up until one night before the exam and I couldn’t actually sleep on that night (due to anxiety) so I only had around 2-3 hours of sleep (no kidding!)
Mock exams:
I did 3 mocks, one from CFAI and 2 from Kaplan. I scored around 75-80% for each mock (you’ll find out how I could achieve this below)
Detailed steps of preparation:
1) read the Kaplan books once (including answering end-of-chapter questions), during reading, I highlighted important points and rewrote important/ difficult-to-understand points using my own wordings (~140 hours or 2.5 months)
2) re-read the Kaplan books for the second time, with more emphasis on the highlighted points and my own wordings. Also reading my own wordings helped me digested the information easier (~56 hours or 1 month)
3) re-read the Kaplan books for the third time and summarized all the important and easily forgotten points on separate papers (~28 hours or 2 weeks)
4) re-read my summary papers from step #3 (~14 hours or 1 week).
by this time, I had truly mastered all materials
5) did in total 3 mock exams (1 from CFA and 2 from Kaplan) (18 hours or 2 days) -> the third mock is actually 1 night before the exam.
6) re-read my summary papers again -> still 1 night before the exam
7) went to bed at 10pm but couldn’t really sleep until I guess around 3 am, woke up at 5 am and had breakfast in the taxi (I was way too anxious, so it was my problem)
the morning I arrived at the test center everyone was revising their notes, when I opened my notes I really saw nothing that needed to be revised, so I just sat there keeping myself calm… during the exam, I went through all questions once without skipping one number (as I went through the questions I was surprised at how easy the exam was)… I finished half an hour earlier….. and the results were not at all surprising…
Disclaimer:
This is my method, may not work for others… I’m the type of person who will only do mocks after I have at least a good grasp of the materials…. So good luck!
Sorry for the dumb question in advance but can someone point out why there are, using the 30/360 day convention, 88 days from the 15 February to 14th of May. I calculate 89 days= (3*30)-1
Also the cfa material says there are 181 days between 15 of feb until the 15 th of August. Isn’t there 180 days?
We’re given the following table:
Deferred tax assets:
Accrued expenses
$8,613
$7,927
Tax credit and net operating loss carryforwards
2,288
2,554
LIFO and inventory reserves
5,286
4,327
Other
2,664
2,109
Deferred tax assets
18,851
16,917
Valuation allowance
(1,245)
(1,360)
Net deferred tax assets
$17,606
$15,557
Deferred tax liabilities:
Depreciation and amortization
$(27,338)
$(29,313)
Compensation and retirement plans
(3,831)
(8,963)
Other
(1,470)
(764)
Deferred tax liabilities
(32,639)
(39,040)
Net deferred tax liability
($15,033)
($23,483)
The problem asks about income tax expense vs. cash tax payments for 2007 and which were higher.
The answer is that cash tax payments were higher because since 2006, the DTL has decreased. I cannot help but think this is incorrect, because they are still running a net DTL for 2007, so wouldn’t their income tax expense be greater than their actual taxes paid?
Thanks!
I’m having a little trouble understanding gains/losses under Fair Value Reporting for debt. So if a bond is reported at fair value, and the interest rate increases, that means the bond’s value on the balance sheet (liabilities) decreases. Why is this considered a gain? Interest payments aren’t going down.
Also, one of the examples in Schweser said that when interest rate increases, a firm would repurchase their debt because of lower prices. This lowers the firm’s liabilities, but won’t their interest payments increase then?
I’d really appreciate if someone could help out! Thanks!
I’ve been using Elan / Wiley guides for the level 1 exam and so far my experience with them is excellent. I use the guides in conjunction with the lecture videos to promote active listening / active studying.
For those who have used the Elan / Wiley guides for the 2014 or 2015 level 1 CFA exam, are there readings which you think could have been better? Did you have to refer to other sources to make sure your understanding was better (i.e. another prep provider and/or CFAI texts)? On recommendation of almost everyone, I have used CFAI original texts only for Ethics at this point.
Feedback much appreciated!
Hi guys,
If you’re a cfa 1 candidate who’ll be taking the exam on Dec 2015 in Singapore, private message/cmnt below if you wish to form a virtual study group on whatsapp.
Thanks
Beta Inc. wants to raise capital amounting to $550 million. It has a target debt-to-equity ratio of 1.2. The following table illustrates the company’s marginal cost of capital schedule:
Amount of New Debt ($ millions)
After-Tax Cost of Debt
Amount of New Equity ($ millions)
Cost of Equity
0 – 100
3.5%
0 – 200
6.5%
100 – 250
4.5%
200 – 400
7.5%
250 – 450
5.5%
400 – 600
8.5%
The company’s weighted average cost of capital is closest to:
6.41%
5.86%
13.4%
Answer: A
Proportion of new debt raised = 550 × (1.2 / 2.2) = $300
Proportion of new equity raised = 550 (1 / 2.2) = $250
WACC = (0.055 × 1.2/2.2) + (0.075 × 1/2.2) = 6.4091%
Can anyone explain why 0.055 an 0.075 where used??
Just a quick question. I have a mental block.
What at are the keys I must press to solve for PMT:
n=3
Spot price in period s1 = 1%
Spot price in period s2 =2%
Spot price in period s3= 3%
fv=100
pv=100
i tried the following on the calculator set N=1, I/y =1, fv=100, pv =-100. Etc and calculate for pmt. I repeat moving the I/Y up a point along with N. I end basically with 1, 2 and 3 for each pmt respective of period.
I can’t see how the figure of 2.96 is done.
