I have a finance and engineering background. I currently work in the energy industry in a Strategy and Analytics role where I also do significant financial modeling, with a view to transition to an investment role at a later stage in my career. Clearing CFA is a good signal to show proficiency in finance, specially if one wants to pursue career in Europe and North America. I had cleared CFA Level I in Feb 2021. The exam preparation for CFA Level II started with all intent in September 2021 and continued literally to the last minute. I had studied all the exam topics and had understood most of the concepts, except few concepts in Financial Reporting and Analysis (FRA) and Portfolio Management (PFM). I was only lacking simulated exam practice that gives feedback about the level of preparation before the actual exam. I couldnt do that because of how late my preparation went. The exam process overall was smooth and the exam went better than expected as per my experience. I could attempt all the questions without making guesses. None of the questions appeared too difficult for me, and I finished both sessions ahead of time. I cleared the CFA Level II in my first attempt with a score that is between 80th and 90th Percentile of all test takers.
Preparation for the exam
Even though I registered for the Nov 2021 CFA Level II exam
in April 2021, preparation started in earnest only in September. I only studied
from Kaplan Schweser Notes 2019, for my preparation. I also referred the CFA
Institute reading for a few of topics that were not covered in the Schweser
Notes, due to the change of syllabus from 2019 to 2020. Those topics were
Machine Learning, Big Data, Trading Costs, Exchange Traded Funds and Corporate
Governance and ESG. For all other 46 readings, I only referred the Kaplan
Schweser notes for my preparation, with occasional Google searches for topics
that needed some more clarity and understanding. My study method was quite
simple. I usually start my preparation with a fresh new topic and then work
through the topic in one go. I could finish upto 3 topics in one specially
productive day. But there were also days when I got stuck in one topic (there
were about 50 topics to cover in Level 2 in total) for more number of hours than was really
necessary. A careful reading and working through the example would usually help
me understand the topic in most of the cases.
All the end of LOS questions in the Schweser notes were
solved (about 900 in total) during the preparation. The preparation for exam
really picked up speed only in November 2021, about 4 weeks before the exam. Due
to work schedule, I could study mostly on weekends. But an assessment of
preparation status in late August made me realize that such strategy will keep me
woefully short of completing the syllabus ahead of the exam date with not much time
to do a few mock tests to assess the level of understanding and knowledge. A change in
job profile also meant I could devote some of my day time for CFA preparation,
without affecting my work. In November, I finished Equity Valuation, FRA,
Portfolio Management and Ethics, all hugely important topics. It was also good
to prepare some of the topics late in the preparation cycle so that the memory
remained fresh during the exam time.
Overall, found the FRA section as one of the most difficult
to study, even though at the end of my preparation, I also realized that FRA is conceptually not that difficult. Rest of the study sessions were all manageable and I was
able to finish most of the study with full understanding of the material in one
go. The significant problem I faced during the preparation was the issue of
forgetting the formulas and the methods used to solve problems during
preparation. For example, when the quantitative methods section was completed
in early September, I had assumed a full understanding and perceived mastery of
all the material. But when I was reviewing the section in late October and
early November I had seemed to have forgotten the key concepts and methods and
had to redo some part of the study, albeit helped by the early preparation the
revision took much less effort and time. This issue of forgetting the earlier
completed study sessions was a major theme during the preparation.
My overall strategy was to cleanly understand all the
concepts, which I was able to in most cases, then continue practice problems and
formulas closer to the day of the exams. My strategy itself called for preparation close to the actual exam day. But there was never a point where I
felt completely confident in my knowledge to write a practice test to gauge my
level of knowledge. So I prepared literally till the last minute before the
exam, knowing well that without the understanding of topics, no amount of
exam practice will help me make pass the actual exam.
Exam Day
I arrived near the exam venue in Halifax city, a full two and half hours
ahead of schedule. It was a cold rainy day in Halifax. I was at a nearby McDonalds having coffee and revising the
formula sheets that I had made over the previous 3 days. The formula sheets
were extremely useful for my last minute preparation as I had written down the
formulas. The act of writing down the key concepts and formulas were helpful for memorization. I went into the Prometric center, Dartmouth, NS at 11.15 AM and my
test was scheduled at 12 noon. I was told by the folks at the exam center that I can start my exam anytime, so with
another 5 minutes of poring over the cheat sheets, I was ready to start my
exam. There was a 5 minute security procedure before I went into the room where
a computer was ready with my name on the screen with CFA Level II exam.
Reflections on First Session
I was quite nervous to begin with as I had not attempted a
full timed test and simulated my exam day performance. I was of course familiar with the
exam format, so when I saw that question vignettes are all shorter than I expected, I
was quite happy. The session started with Economics and progressed all the way
to Alternative Investment and Portfolio Management. The first session had 11
vignettes with 4 questions each in the vignettes. I found the questions to be
straightforward most of the times and I probably had to initially guess a
couple of questions (may be more), but not more than five. I finished the
session about 30 minutes ahead of schedule and had time to revise my answers
where I made two changes to the answers. I was generally happy to have finished
the session as I was quite tensed to begin with and each of the vignettes were
of differing difficulty level for me, but none so difficult that I had to
purely guess the answer.
Reflections on Second Session
I took about 10 minutes break between the sessions. I
started my session with much better confidence and positivity due to my better
than expected performance in first session. I had hit my stride by then, or it
could also be that the second session was also not that difficult on a relative
basis. All the questions from the Vignettes were even more straightforward than
the first session based on my experience. I finished the session almost 53
minutes ahead of schedule. I reviewed all the non numerical answers, but I didn’t
redo calculations to reconfirm the numerical answer choices. I was quite
looking forward to finish the whole exam quickly and leave the exam venue,
happy and content noting that my 2 months crunch time preparation really paid
off.
Overall Reflections
As mentioned earlier, I came out of the exam center as a
happy man, relieved that the exam was easier than expected. I also managed to
solve almost every question without resorting to any guess work. The number of
questions where my answer resembled a guess was less than five. My review post
the first set of answers also didn’t return any large number of changes, that
also made me confident that my answer choices must be correct. I checked Reddit
forums on CFA and found that the feedback about the exam resembled my
experience. Candidates found the exam, overall straight forward and easy, where
a good grasp of fundamental concepts will see them breeze through the questions
without much difficulty. This raises two questions for me. If the exam was easy
for most people, then errors made during the exam will be punished. I may have
been too fast in my second session and chances are that I may have made few
mistakes in that session. First session is also not that different in that
regard as I found the first session more difficult than second. However, my
feeling is that I have good chances of clearing the CFA Level II with a score
slightly above MPS. In reality, I scored well above MPS with my score being dragged down below 90th percentile only by less than expected performance in FRA and PFM sections.
Conclusion
I had prepared well for the exam, as in there were no topics
that I didn’t understand or struggled to know the key concepts. I may have had
to learn Portfolio Management active risk chapter with a less deeper understanding
that usual and topics of Pension Accounting, International Accounting were also learned with less than deep understanding. I was able to understand other topics with deeper understanding of the concepts. It also
made sense to study till the last minute for my case due to my work schedule and how less time I was able to devote for the study in August and September. Based on my experience of forgetting
the formulas and concepts from earlier preparation, a late concentrated preparation
helped me appear very fresh for the exam. Lack of exam practice did affect
me, as scores in the FRA and PFM sections were less than my expectation. My key takeaway is that, CFA Level II can be cleared with a very focused 2 to 3 months preparation. I also realize that exam practice without adequate preparation
is probably not very good. Prioritize preparation and understanding of the
topics.
Profile of the Candidate
I have bachelor’s in engineering, master’s in business administration and a MS in applied mathematics (Finance). I worked in finance sector for 3 years, before transitioning into Energy Economics, first as a policy researcher and then as a consultant. I currently work as a Manager, Strategy and Analytics with a North American energy utility based in Halifax, Nova Scotia. I therefore possess background in finance and some quantitative ability. I cleared my CFA Level I in April 2021. I could’ve registered for Level II exam in August 2021. Due to work schedule and also in light of an extended overseas travel, I instead chose to take the exam in the Nov 2021 testing window. As I cleared my Level II exam, I am on track to register for Level III in mid/late 2022, which is the fastest anyone can complete all three levels of CFA.
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