Guide to CFA level 1

About CFA certification

CFA(chartered Financial Analyst) is one of the coveted certificate programmes seeked by MBA students and Financial Analysts today. Though the programme doesnt have the mandate of AICTE in India, it's popularity can be seen by the fact that many job seekers and industry expert vouch for its legitimacy.

The programs entails three levels. The earliest one can complete all the levels is in 1 and half years.The level 1 exam is held twice in an year i.e. December and June, the rest levels are held only in the month of June.

Let me first sum up the pros and cons of the exam:-

Pros-

1. Global recoginition and industry preferred program. Adds to one's CV if Finance is your goal.
2. Provide's important accredited knowledge to an individual from non-commerce background.
3. A very comprhensive syllabus covering important aspects of Finance.
4. Can be done by self study along with the current job.
5. Helps in understanig day to day financial activities and policies covering equity, bonds, investments etc.

Cons-

1. Expensive affair. The exam costs a huge amount of money. Level 1 costs somewhere aoround $1100 and level 2 and 3 costs $700.
2. The pass percentage is low.
3. As I have already iterated that CFA doesn't have the mandate of AICTE, therfore one can't take the exam on Indian soil. You need to travel to nearest centre for the exam outside India. Which adds to cost and take a toll on time.

About the Exam

The topics included in Level 1 are simple yet cover all the major aspects of finance. Right from quantitative methods, Financial Statement Analysis, Bonds, equities, Portfolio managemnet, corporate finance, derivatives, Ethics, Economics(Micro/Macro), Alternate Investments, Fixed Income. The exam for Level 1 consists of two papers each for 3 hour duration held on the same day. Both the paper cover all the topics mentioned above and consist of 120 questions each, with proportional distribution of marks which is mentioned in the syllabus by the CFA instittue.
For example if it has been mentioned that 10%of questions will be from Economics then 12 marks of questions will be present from Economics in each paper. The questions are MCQs with one correct answer. There are no negative marks.
The criteris for clearing the paper is not mentioned by the institute. The scorecard has three range for all the topics mentioned above. The ranges are-

1. <50%
2. 50% - 70%
3. >70%

For each topic you are told in which range your score lies and the overall result shows Pass or Fail. The gneral belief is that if you score >70% in the topics with greater proportion then you clear the test. However these are just some wide guesses.

The paper is very comprehensive covering very minute details and the entire syllabus should be covered with equal importance.

Preparation

Once you register you'll be send around five books each covering one/two topics. The tomes seem frightening at first and many turn to Schweser notes avalibale in the market for they are concise and cover all the topics in the syllabus. However if you have time or find it difficult to catch up with the notes then you can always turn to the books sent by the CFA institute. The CFA institute maintains that you need to put in around 250 hours of study to clear the paper. However I differ by saying that you need to put in 2-3 hours daily for 3-4 months to clear the paper. it's important to put in effort everyday rather at one go in the end, since the paper is ver comprehensive the syllabus is vast.

More importantly one should take the course as to clear the exam but to understand the topics as the exam is meant for knowledge and learning. Simple and interesting topics like quantitative methods/Economics should be to start with and to gather a feel of the topics and then one can move on to FSA and other deeper topics. Important info regarding the topics being studied can be googled and studied offline to get a better grasp of the subject in concern.

Last but the least many take the exam to add on to their existing qualification or help them out with their job propects. Thus they are bound to be grilled on the concepts duringthe interview and therefore should be thorough with their preparation to help them in the long run.

Good Luck :)
navagarwal@gmail.com

Obnoxious conduct by B schools

Never was education at the mercy of money as much as it has become now. The multitude of B schools offering "world class" education have now become money minting machines where they don't mince words at propagating the usefulness and the integrity of learning imparted by them where as themselves adopting the sickening ways of making money at the cost of the aspirations of thousands of students.

All the CAT/XAT/SNAP aspirants know that the score card for the respective examination is being used by many other institutes for admission purposes. These institutes have to pay the IIMs/XAT institutes for the detailed score of the candidate who has applied to them. Many students apply to these institutes whose forms cost more than what is charged by the IIMS!!! Not only this, these institutes will set the deadline of the application before the CAT exam, so that every individual will end up shelling out money though he/she might not have performed well in these exams.

There are however only a few instis which realise this and set the deadline such that a candidate after judging his/her performance can apply at the hope tht he/she mite get a good percentile. This whole system needs a makeover. The IIMs are napping when the said institutes are making money out of nothing, but not altogether.. they too are marching happily to their banks as this ends up filling their coffers too. They can control the scores and as these institutes to comply with setting the deadline after the exams are taken. Alas.. who wud kill a golden goose???

The obnoxius money charged at the name of admission formalities needs a check. Economically backward cant afford such a big hole in their pockets.

GMAT scores are out the same day and institutes to which a candidate applies asks for some extra amount to get the scores from the GMAT ppl. But here the candidate knows his/her score
and knows where he/she has a chance.

It's high time the goverment officaials concerned(AICTE/UGC) come into the picture. They should realise that the monopoly enjoyed by these self proclaimed centre of excellence should realise their duties towards society and be true to the spirit of education, rather indulging in sloppy means to earn.

Also many institutes abroad have the option that they wont charge the admission fee if you are economically backward. But such a thing doesn't exist here. Reason... we are here for money and money only. So next time the interviewer of a b school says that you want to do an MBA for money you should tell him/her that he/she is in the same boat.

Guys pl. write letters to UGC/AICTE to bring about a change.

What should I do??

Comes the results of our high school and we are flooded with this question with everyone from our parents, to neighbourhood uncle, the regular "comparing aunty" boggling the fragile adolescent young mind. Should I go on to become a doctor, engineer or specialise in arts sciences or pursue something in business administration or bring out the creative talents I possess?

The question is an evergreen one and generations have faced it and I think only a very small percentage of people have found the right way and have went on and pursued their dreams.

The ctime has come where the options can be decided based upon the child's capabilities and likeness rather forcing the career considered "HOT" at that time. What may be uninteresting or unlikeable by some can be equally enjoyable by other. To strike a balance is very important here.
Parents must be made to go through counselling along with kids where their apprehensions and aspersions can be cleared. Tests to bring out a childs likeness and talent should be conducted regularly at all levels in schools to identify the career path a child can take.

Why MBA?

This is one important question every B school aspirant prepares during his/her GD/PI stage.
And trust me this question is going to trouble you the most when you try to answer it in the interview.

Most of us are going for MBA because the majority is doing so. The salaries offered are astronomical. The CV looks incomplete without the MBA degree. There are some whose ambition is to get into IIMS!!! I have even heard one funny incident where a guy was pursuing MBA else he wouldn't be getting the right girl :).

I think the more important question than this is What do you want from your life or what do you love to do? Everyone of us have some capabilities that we are aware or unaware of. And going with the ability we have will always be good for us and we'll make our life happier. However this isn't very practical to many and we follow the herd. That's why to answer this question is very important.

However, the question still boggles everyone. If you are associated with any insti or teacher then they ask to prepare a draft and show them the answer to this question so that they can edit. And that is the time we really think, why MBA??? Because of all the jargon we might write the truth is most of us never gave it a thought. We went for it because some of our near/dear ones has done it. or the society demands it. and this reason is not reflected in the answer. In fact it can not be reflected in the answer.

Then what should we write??? The answer lies in the answer to another question-- What do you want to do in your life?? This again is troublesome.
So the best way is go for reverse engineering.. answer backwards...

what will happen after you have become an MBA?? What will you do then? Will you be working or starting your own venture? In either case why will you do that? What would be your job profile or the venture about? Why have you chosen the work profile or the venture? Why can;t you go for the job or the business opportunity now, without MBA? Is MBA the only way to get there? What MBA will do to benefit you for this job/venture?

These are the multitude of questions you should ask yourself and believe me ask them now rather when you reach the GD PI stage.

MBA

This is one hot topic for discussion. The number of people who are in the league to get admitted into the prestigious IIMS has been increasing year after year.

What makes IIMs speaial? The number of students going or CAT exam in CAT 2007 was roughly 200,000. Now if take the IIMs to have roughly 1500. If we include some seats for other specialised programmes too then the number comes around 2000 ( the no. of seats is indicative and is in the rise due to reservation related issues). Thus this leaves us with 198,000, nearly 99% of te students aspiring for IIMs to look for other colleges.

Can we say that the 99% of students are not worth IIMs are less intelligent? some may say yes and some no, They both have their reasons and I think both are valid.
But the important point here is that the IIMs not entirely in themselves make the colleges of fame what they are known as. The students who have handpicked with the most stringent process in the world( said by some magazine) are a very important part of the brand name- "IIMs". Similar it has been said for IITs.

One importnt thing IIMs have inculcated is and that is being emulated by the major B Schools in the country is the rigorous pedagogy. The entire curriculum makes the student slog hard and aspire for best.