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CFA Japan is conducting a seminar on insurance-linked products. The speaker, Mr. Masaaki Katusyama is an industry veteran, with deep knowledge of re-insurance business. He also has the ability to bridge the worlds of capital markets and insurance in a plain and easy-to-follow language. Highly recommended event. Details can be found here: ＣＡＴボンドへの投資 - 金融危機で実証された、分散効果の高い保険リンク証券投資戦略 ■

Last Friday I took a day off and headed to a local test center to sit my CAIA Level 1 exam. Without going into too much detail so as not to violate the non-disclosure clause one has to sign before taking the exam, here are some notes and personal reflections:

An excellent article and a consise but informative comparison table on financial certifications. A must-read for CFA and CAIA candidates.   The Value of Professional Designations: CAIA, FRM, CRPC, CIMA, CIC, CFA   Comparison table   It seems that both CFA and CAIA are in great demand, so I am on the right course. The only tiny thing left is to get through all the exams and earn the designations. More late night studying ahead...     P.S. I would like to thank Reza Mahmud for kindly sharing the sources on the LinkedIn CAIA group discussion board RELATED POSTS: CAIA Level 2 Exam Preparing for CAIA Level 2 CAIA Level 1 Exam CFA and CAIA Designations

Yesterday I had the pleasure of attending the CFA Japan Year End Party. It was nice to catch up with some people I know and meet some new faces. It was a pleasant surprise to learn that one of my friends earned his CFA designation this year (congratulations, Andres!). When you see an example of somebody actually getting through all the three levels, it gives you some hope and confidence in your own endeavor. What really made an impression on me, however, was the number of people who had no corporate logos on their business cards. Some of them started their own business, some are just hanging out waiting for a decent employment opportunity. There are really tough times...

December 2008 Pass Rate for Level 1 is reported 35%, same as that for June 2008. http://www.cfainstitute.org/cfaprog/resources/examdetails/examresults.html Thankfully, I am among the lucky ones this time. I am curious why the pass rates for Level 2 and Level 3 are substantially higher than for Level 1. Does it mean that only smart guys are left, and they pass anyway, or that it is harder to get from zero to Level 1, than it is from Level 1 to Level 2? I kind of hope it's the latter.

CFA is not for the people with empty pockets. Program enrollment and exam registration fees will cost from $990 to $1395, depending on the timing of application. Plus, it really helps to have some unofficial preps, like Schweser Study Notes, if you don't have time to go through the multi-hundred-pages official curriculum. So, it's really nice to learn that some of that material is now available for free. Investopedia.com now hosts CFA Level 1 prep, along with Series 6, 7 and 63. Even after spending 5 or so minutes browsing the site it became obvious to me that this is way too little to pass the exam, but it is still a very useful resource to gain an understanding of the topics covered and occasionally find one of the not-so-complicated formulas online whenever you need them. Not so bad for the times when salaries are not expected to increase for a while.

Last Sunday (Saturday for you in Americas) was the big day for the CFA Level 1 candidates. Sleepless nights came to an end, and ahead were 6 hours of exam. I was one of these candidates. Personally, I found this exam a little easier than the one I sat in July (and failed). There were fewer problems that required complicated calculations, and the Quantitative Methods section contained less difficult statistical problems. Interestingly enough, the pledge on the exam problems pamphlet (mandatory to sign) explicitly required candidates not to disclose contents of the exam, so I am not going into more detail, but my overall impression is that this time I may stand a chance. Although, this is the CFA exam, you can never be really sure...

What is a better way to pass the CFA exam - the official materials that you get shipped when you apply, and pay for even if don't want to, or the shorter unofficial materials such as (among others) Schweser Notes? CFA Institute recommends the minimum of 250 hours to prepare for the Level 1 exam. In my practice, this number can go way up, depending on your background and the availability of time. It is good if one majored in quantitative methods and already has a CPA, then CFA should be less of a challenge, but for the vast majority of candidates, it tends to be the first encounter with at least one of the topics on the broad CFA curriculum. So, it is safe to add up 30-50 hours for each area you are completely unfamiliar with. Plus, CFA exam-takers are usually employed, so they have to spread the study over their weekends and nights, and the total length of the preparation period is very long. Unsurprisingly, many people forget what they studied in the beginning by the time they get...

Revisitng the topic of CFA pass rates, below are the most recent pass rates as reported by the CFA Institute: June 2008 Level I: 35% Level II: 46% Level III: 53% December 2007 Level I: 39% The question is, will these change in 2009, when the three-choices answers replace the current four-choices structure? Below are some links arguing on the topic: CFA Institute claims that there will be no change, as any change in the absolute number of correct answers will be offset by the relative nature of assessment. However, Dr. R. Douglas Van Eatonon the Schweser CFA Blog provides a less straitforward, although similar viewpoint. In any case, there is a lot of hours to put into the exam preparation, no matter four choices or three.

It is interesting to note that CFA pass rate has considerably declined over the years. It amounted to as much as 94% at the time of inception in 1963, and as little as 42% for the June exam of 2007. Of course, the total number of exam-takers has grown around 250 times, so these pass rates are not completely comparable, but the shift is considerable enough to show a clear trend. Is it the exam becoming more difficult, or the exam-takers are getting dumber? Let's just hope that I am one of the few lucky among the 42% when I receive my exam results in about two months... Original data is available at CFA Institute official site at the following URL: http://www.cfainstitute.org/cfaprog/pdf/candidate_results.pdf