Making the transition from Level I to Level II of the CFA Exams is undoubtedly a tough challenge, but one that is manageable.
One of the big dilemmas for Level I candidates who have studied the December exam is when to start studying for Level II. They have the nail-biting wait for their results, which don’t come out until mid to late January, so the earliest they can sign up for Level II is the end of this month, which reduces study time.
“If you look at the pass rate for June 2017, Level I had a 43% pass rate, compared with 47% for level II. It’s a higher pass rate than level I, but you’ve got to bear in mind that by definition Level II candidates have already sat and passed Level I. So we’ve said goodbye to 57% of candidates at Level I, now we’re seeing a further 53% fail at level II. So it’s a significant challenge, but one we are ready for” says Jonathan Bone, CFA Course Programme Director at Kaplan Financial.
This is why Kaplan has decided to give candidates a step up with its free taster to Level II of their JumpStart programme.
The JumpStart trial package offers ideal preparation to candidates, and anyone else interested in Level II, so they can get stuck into their studies early without incurring any costs. You can attend a free class and have access to study materials. It’s easy to sign up for the JumpStart package right now.
This is what you’ll receive:
Access to online materials expires on the 2nd February, still plenty of time to see if you are up for the Level II challenge.
“They are getting all the materials that our candidates would be studying from in the first month of Level II,” saysl. “The online and live classes give them a chance to learn about and discuss study techniques and the technical material.” says Bone
The Challenge for Level II candidates
He cites three key reasons why a Level II exam is a different challenge than Level I:
1) Candidates are going to step up in the technical nature of the material.
2) The exam format. Level I is stand-alone multiple questions (1,140 in total). When they get to Level II it changes to an item set format. These pose a bigger challenge.
3) The syllabus weightings are variable at Level II, rather than set. For example, in Level I economics is 10% (24 questions), but when you get to Level II, it is 5-10%. So, you don’t know how much each subject will be represented in the exam.
Effectively, Level I is really a foundation of the CFA. It is designed to bring all candidates together - regardless of their previous studies - up to a core level of basic financial knowledge. Once you get to Level II, the technical focus changes to specific fields, such as the sell side and asset valuations.
“Candidates may have encountered some of the Level I material elsewhere in prior studies, but when they get to Level II that’s not the case. They’re a lot less familiar with the content, which is automatically going to increase the required study hours,” warns Bone.
“There’s a possibility that some candidates who make it through the Level I exam having studied less than the recommended 300 hours, assume they can do the same for Level II, so leave their studies until later.”
Another technical point, Bone raises, is that Level II is more mathematical because it focuses on asset valuations and pricing. He points out that candidates have particular trouble with derivatives – forwards, futures, options and swaps etc.
“Fixed income is another challenging area, which is echoed by the CFA’s own data. They’ll be looking at things like binomial interest rate trees, bonds with embedded options and credit analysis. So hard core technical content,” explains Bone. “And they’ve still got their old friend financial reporting analysis, which can cause problems at Level I and II. So they need to put in more study hours, which is where the JumpStart package proves invaluable.”
How to ensure you make a smooth transition to Level II
Having access to the Level II Schweser Pro QBank is particularly helpful, as question practice is without doubt the most effective way of developing a technical understanding of a topic and it aids recall, says Bone.
“Another great tip is to practice Interrogative reading. If you read a couple of pages of a technical journal then try to recall what you read a couple of weeks later it’s hard to remember even the topic, let alone the fine detail,” says Bone. “So it’s much better to simply read a couple of pages of the study material (Schweser study notes or CFA’s own material), close the book, and then recite what you’ve just read, but in your own words. This immediately demonstrates you’ve got a technical understanding. If you can’t do it, then it shows you didn’t understand the topic.”
Getting your head round all the revision techniques and technical material is a challenge, but Kaplan’s friendly team of expert staff and high quality study courses will help you all the way. Signing up to the JumpStart trial package is a no brainer.
“Even if candidates aren’t successful with their Level I exams, they get a taste of where their studies are going,” adds Bone. “And it’s free. So, no harm, no foul.”
To sign up to the Kaplan JumpStart study package please visit here