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The 5 most common mistakes at the CFA® Program exam (and what to do instead)

In this series of revision posts, we ask your AB Maximus CFA® Program exam trainers to give you quick tips and essential advice for different chapters in the syllabus. Handy for revision or simply for a last minute review to make sure you’re thoroughly prepared – don't miss the chance to brush up on your knowledge and do a little extra prep!

Peter Lai, CFA, shares his top 5 don'ts for the exam - so you don’t sweat it!

1. Don’t skip the past year papers

This one sounds obvious – but you’d be surprised! The main reason why many students fail is because they go into the exam without having done any past year papers.

People may tell you that it is pointless to do the past year papers. Don’t believe them.

The curriculum and body of knowledge to be tested does not change a lot every year. The question bank from which the exam papers draw questions to design the exam papers from does not change a lot every year.

The process of choosing CFA® Program exam questions is a long one, and there are strict rules to follow before new questions are added or old ones removed. Hence, it is common to see questions on the same topics asked again and again. They will simply be phrased differently.

What to do instead:

As with any exam, do enough past year papers to get familiar with the ways that the questions are asked. A week or two before the exam, set yourself ‘mock papers’ (choose those from the last 3 years) and answer them with a time limit as though in the real exam to condition yourself to the exam environment.

2. Don’t try to read everything on the recommended reading list.

This is only a bonus for your studies! Neglecting doing past year question practices as a result may cause you to suffer in the exam.

What to do instead:

Study smart. Read as many of the recommended readings as possible, but your priority should still be to do as many past year questions as possible.

However, if you have done sufficient preparation for your past year papers, reading the recommended readings is a good way to secure a distinction.

3. Don’t worry too much about your writing proficiency.

Short and complete answers – especially in the Level III CFA® Program exam written components – are the most important part of the answer.

Often, students worry too much about perfect English and writing in full sentences, or become too long winded when answering.

What to do instead:

Get straight to the point with statements and bullet points. You may even underline key words if it makes it easier to spot them. It is perfectly fine to answer this way.

4. Don’t skip the calculation working

Yes, answers should be as to-the-point as possible - but this does not extent to your calculations. These are what the examiners grade when assessing your understanding of the topic.

What to do instead:

Always write out your working clearly for any calculations. Even if the final answer may be wrong (maybe due to an error brought over from an earlier calculation or another part of the question), marks are sometimes given for correct working.

5. Don’t be discouraged by the CFA® Program exam passing statistics

According to the statistics, few people pass the exam on the first try. In fact, only about 55% pass each level at every exam. This means that out of 1,000 students, only 16 go from Level I to III with only one attempt at each exam. (Although this could be you – if you use tip #1!)

What to do instead:

Often, the reason why so many people fail the exam is because they did not prepare well. If you spend time to study (and study smart!) you should be able to pass. It is worth the effort of preparing for the exam properly to pass it on the first try.

But even if you do fail, don’t give up. The CFA® charter is one of the qualifications that lets you re-attempt the exam at every level. Take full advantage of this! If you fail, prepare more and then try again.

About the Author

Peter Lai, CFA, lectures on value investing and REITs for AB Maximus & Co. He has over 30 years of experience in investment consulting, treasury management, asset management, corporate finance and securities trading. He graduated with a Masters in Economics from Cambridge University, and has lectured at NUS, SMU, and NTU. He is the Director-in-Residence with the Saw Centre for Financial Studies and a board member of several listed companies.

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