Thousands of people around the world are hoping they have what it takes to be a chartered financial analyst. Could you be one of them?
A record 250,000 candidates will sit for the three exams required to become a chartered financial analyst this weekend, across 95 markets around the globe, according to Bloomberg[1]. That’s 11% more people than previous year.
Those who pass the three exams offered by the U.S.-based CFA Institute will receive the professional credential. The exams cover a broad range of subject matter — topics include accounting, professional ethics, securities analysis and money management. Very few people have completed all three exams. Between 1963 and 2016, over 1.3 million candidates had sat for the Level I exam, while just over 209,000 managed to pass the final Level III exam, according to Investopedia.[2]
The CFA credential is highly sought-after in the investment world. The designation can also exempt charter-holders from needing to take other exams required to work with institutions such as the New York Stock Exchange and Taiwan’s Financial Supervisory Commission.
The CFA Institute manages the charter and the necessary exams to receive it. The organization’s mission is: “It is only through transparent, ethical, and truly accountable service that finance contributes to the ultimate benefit of society.”
The exams are offered two times a year: All three levels are available in June, while the Level I exam is also presented in December. Fewer than half of those who take the tests pass. In 2017, a record 47% of test-takers passed the Level II exam, according to Business Insider[3].
This year, the tests cost between $650 and $1,380[4] depending on when the candidate registered. On average,
The Level I exam involves 240 multiple-choice questions on financial tools and inputs. For the Level II exam, test-takers must answer 21 item set questions based on “vignettes” or “mini-cases” related to asset valuation. The Level III test focuses on portfolio management and includes essay questions and item set questions.
All three tests take six hours each and are administered in two sessions split between the morning and afternoon. In 2021, the Level I test will become electronic[5] in an effort to speed up the time it takes for candidates to receive their results. Currently, Level 1 and II candidates must wait 60 days for their results, while Level III candidates wait 90 days.
Below are a group of sample questions the CFA Institute published and released in 2016 (answers to the questions appear at the bottom of the article.) The questions’ difficulty and format were designed to mirror what real test-takers face.
You can find more sample questions here[6].
1. The feature of a well-functioning investment industry that gives investors the ability to quickly buy and sell a significant amount of an investment without having a material...