Chartered Financial Analyst Exam

Chartered Financial Analyst Exam Explained

Below is a short run down on Chartered Financial Analyst exams including what levels must be completed and what participants are tested on. The CFA exam is much different from the Certified Hedge Fund Professional (CHP) Designation, this article helps explain how.

To earn the CFA charter, you must successfully pass through the CFA Program, a graduate-level self-study program that combines a broad curriculum with professional conduct requirements, culminating in a series of three sequential Chartered Financial Analyst (CFA) exams. Level I exams are held in June and December. Levels II and III are only held in June.Candidates generally take one exam per year over three years and are written at a postgraduate level for financial professionals. Fees for the June 2008 exams range from $600 to $930, depending on the date at which the candidate registers to take the exam.

The Level I study program emphasizes tools and inputs and includes an introduction to asset valuation and portfolio management techniques. The Level II study program emphasizes asset valuation and includes applications of the tools and inputs (including economics, financial statement analysis, and quantitative methods) in asset valuation. The Level III study program emphasizes portfolio management and includes strategies for applying the tools, inputs, and asset valuation models in managing equity, fixed income, and derivative investments for individuals and institutions.

All three exams are administered on paper on a single day; the Level I exam is administered twice a year (usually the first weekend of June and December). The Level II and III exams are administered once a year, usually the first weekend of June. Each exam consists of two three-hour sessions. Level I is multiple choice - all information required to answer the question is contained in the question. Level II is item set - a vignette followed by selected response questions. To answer each question, the candidate must refer to the vignette as there is insufficient information in the question stem. Level III consists of a session of short-answer questions and a session that is item set. On the multiple-choice/item set sections, there is no penalty for wrong answers.The curriculum for the Chartered Financial Analyst Exam is based on a Candidate Body of Knowledge established by the CFA Institute. For exams in 2008 onwards candidates automatically receive the curriculum readings from CFA Institute when they register for the exam.

The curriculum includes Ethics and Professional Standards, Quantitative Methods (such as the time value of money, and statistical inference), Economics, Financial Statement Analysis, Corporate Finance, Analysis of Investments (stocks, bonds, derivatives, venture capital, real estate, etc.), and Portfolio Management and Analysis (asset allocation, portfolio risk, performance measurement, etc.)

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