CFA Finance: All About the Chartered Financial Analyst Certification

CFA certification for sure The MOST demanded and recognized certification in the world of finance. Many large companies (especially Anglo-Saxon ones) require it before recruiting a candidate. We even go so far as to believe that a CFA (Chartered Financial Analyst) isone of the hardest degrees to get, with a success rate of about 42%. The purpose of this article is to introduce you to the CFA, its workings, its usefulness and, above all, to explain to you why is it important to pass if you want to work in finance!

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CFA: three-level diploma

CFA certification actually requires three exams and three levels (CFA I, CFA II, CFA III) must be fully validated. Level I is more targeted students who want to start their career in finance and who, therefore, need to be trained in financial analysis and demonstrate their level for their future business.

CFA I (CFA level I) this is the only level that offers two sessions per year (in January and June) and takes the form MCQ with 3 or 4 sentences per question. The exam consists of 240 questions candidates must answer in 4:30. Necessary score 70% correct answers to pass the exam, but a candidate with a slightly lower score may be accepted if they have an excellent score in financial ethics. It is estimated that approximately 35% of applicants who takes the exam, passes it.

The CFA I score is based on the main financial instruments: quantitative methods (actuarial calculations and statistics), micro- and macroeconomics and analysis of financial statements using the main international standards. You also need to know the basics derivative products (characteristics and organization of futures and options markets), as well as simple assets (stocks, bonds, etc.).

Then CFA II offers onlyone session per year, in the month of June. The latter is performed in the formMCQ of 120 questionsdistributed under fifteen case studiesallowing to put the candidate in a situation, all this in 4:30. As for level I, score over 70% correct answers guarantees passing the exam about 40% success rate. It should be noted that CFA II is often considered the most difficult level of the three.

Level II focuses on the valuation of structured and complex assets. To obtain a CFA II certificate, you must masterTime series in statistics restatement of financial statements in the context of mergers and acquisitions in the field of financial analysis, as well as credit analysis, added and updated after the mortgage crisis. Portfolio Modeling and Optimization Strategies Assets must also be known. Finally, an important part is always given to business ethics.

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Finally, CFA III differs from the first two levels in that it takes the formabout ten essay-type questions and 45 MCQ questions. A score of 70% correct answers, again, is a guarantee of success, and it is considered that a little less half of the candidates pass level III. Only one session per year is also offered.

For its part, CFA III focuses on goals and limitations of different types of investors (individuals, pension funds, funds, insurance companies, banks, etc.) in order to build a consistent investment policy. It is also necessary to be precise in the wording economic forecast for different pairs of assets. Finally, you must know how to create, manage and Rbalance portfolios combining various types of assets and derivative financial instruments.

Grade required to validate CFA levels calculated at each session, depending on the complexity of the topic, the exemplary success of the candidates of your session. A result of more than 70% guarantees a certificate, but is not mandatory. So there is no “objective” score to be achieved, each session has its own score.

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How much does CFA cost?

There is no exact price for CFA certification, asIn fact, the cost varies depending on the date of registration. To take a concrete example: for the June session, a candidate who has registered until October 17 they will pay $650, until February 13 – $950, and until March 13 – $1380. After this date, registration closes. Each test comes at a cost: so you pay for each test separately, it’s not (until October 17th) $650 for three certificates, but $650 for the first level!

Finally, it should be noted that many private organizations offer education and preparation for the CFA tests. Indeed, it is estimated that an average of 300 hours of preparation is required to pass the CFA I, which is why many candidates resort to private organizations worth several thousand euros (by level).

Description of tests

MCQ and questions for CFA tests: divided into different topics candidates are expected to master. Let’s see what these parts are:

  • in Financial reporting and analysis constitutes the largest part of twenty% questions and has the highest coefficient. Keep in mind that 70% of the questions in this part are explained in the first half of the revised syllabus chapters (the revised CFA compendium): Parts 1 to 7 (out of 14) contain 70% of the answers on this first topic.
  • Part Ethical and professional standards represented fifteen% questions, knowing that most of them will focus on the topic of the Standards of Professional Conduct
  • Economy is 10% questions. Most of the answers are contained in the first four chapters of the guest book.
  • Part Impartiality also featured on ten% questions. This is the part that is the easiest to score a lot of points on because it is very theoretical and has only six chapters that are easy to understand.
  • Fixed Income present in ten%. To fully understand and remember this part, we advise you to do and repeat many of the exercises.
  • corporate finance present in 7%. In this part, the topic “Working capital management” is in great demand, first of all.
  • portfolio management contains 7% questions. To get the maximum score in this part, you must first of all be able to interpret curves and be able to analyze them.
  • derivatives presented 5% questions
  • Alternative Investments is the least represented part with only four% questions

CFA certification: gateway to the world of finance

CFA is an exam of American origin, which today recognized worldwide and which represents a real gateway and a testament to your skills in terms of finances. This will be required of you, especially if you want to work in areas such as asset management, investment banks or even investment advisory companies.

The advantage of the CFA is to be known and recognized worldwide and to represent a real guarantee of excellence and skill in the world of finance. It represents real cleavage between candidates for the position who have passed the CFAand those who do not have it and are not going to take it.

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