How to Study for the CFA Level 1 Exam

So you have just signed up with the CFA Institute, waiting for your books to come in the mail, and starting to make plans on how you are going to study.  Are you getting a little frustrated where to start or how to plan? It is going to take a focused plan to make sure you study for the test effectively and study enough so that you retain the information you learn.  I am going to outline how I studied for the test and then summarize the key points to make your study process as efficient and effective as possible.

I’d like to give you a little back story first.  I signed up for the December 2011 CFA exam in May 2011.  In studying for the exam, I believe I had one great advantage and one great disadvantage.  My advantage was that I just graduated from business school with a major in finance, so a lot of the information covered was seen before in my classes.  My big disadvantage was that shortly after I signed up for the CFA, I was diagnosed with an auto-immune disease called Ulcerative Colitis.  Because of the nature of the disease, I always had low energy/tired, was anemic, had extremely low hemoglobin, had bad chronic pain, and found myself in the hospital every other month.  This had a huge effect on the amount of time I had to study for the test and gave me fears that I would have to write the exam again in June 2012.

I wanted to give myself a lot of time to study for it because I heard that the pass rates were so low and it covered a lot of information.  I figured 7 months was more than enough time to let me slowly start to tackle the exam.  But, looking back, I think that may be too much time to study.  I read many blogs, forums, and talked to some individuals who have the certificate, and a majority of them warned against over-studying.  They said it is easy to burn out when studying for long periods of time and I agree with them.  I think the ideal amount of study time is 4 months.

In this 4 months, you should be dedicating about 1-3 hours each day to studying, and increase this to 3-5 hours per day 2-3 weeks before the exam.  You should also plan break days.  Having 1-2 days each week where you do not study or worry about the exam will be crucial to keeping yourself focused and prevent burn out.  For myself, I unfortunately did not have 4 months to study because of the UC.  After many serious flares and weeks spent in the hospital, I was finally feeling better, through medication, by the end of September. This gave me just over 2 months to buckle down and study for the exam.  I ended up putting in 4-6 hours each day and gave myself a day of rest each week.  Two weeks before the test I was putting in about 8 hour days.  I was fortunate that I was not working at the time and I could do this.  So, if you are late signing up and find yourself with less than 4 months to study, it is possible to study enough for the exam, but more time must be dedicated each day towards preparing for it.

So now that we have the amount of time needed sorted out, we can now tackle the content and what study aids to use.

You will get 6 books from CFA.  In addition to these books I suggest using a third party study toolkit.  I used Schweser and really liked the product and believed it helped me tremendously.  For the CFA Level 1 exam, I would suggest buying the “Essential Study” package.  It includes “Schweser Notes” and “Practice Questions”.  If you are completely unfamiliar with finance or accounting, then maybe bump the package up to “Premium Study” where you will also receive “Online Instruction”.  Now that you are equipped with the CFA body of knowledge books and the Schweser toolkit, you have all the tools you need and are ready to study.

I broke my study resources into 5 parts: 1) CFA body of knowledge books, 2) Schweser Notes, 3) Schwerser LOS summaries, 4) Schweser 30 question quizzes, and 5) Schweser mock-exams.  The Schweser LOS summaries can be found online when you sign up for the “Essential Study” package.  This gives you a quick summary of the important points in each LOS.  They range from half a page to about a page and a half.  The 30 question quizzes can be made online using Schweser’s quiz creator.  I made five 30-question quizzes for each study session (there are 18 study sessions).  This will end up leaving you with about 2700 questions to study with; sounds like a lot, but really it isn’t.

So how do you use these resources?  Well, I started by reading the CFA books.  After finishing 3 study sessions, I would go back and do a quiz.  As an example, after I read SS 1, 2, and 3, I went back and did a quiz for SS 1, then when I finished reading SS 4 I went back and did a quiz for SS 2, and so on.  I did this so there wasn’t a large amount of time where I didn’t study a particular topic.  I also used this strategy with the LOS summary notes.  After reading 6 study sessions, I would go back and read the first LOS summary.  For example, after reading SS 1, 2, 3, 4, 5, and, 6, I went back and read the LOS summaries for SS 1, then after reading SS 7, I went back and read the LOS summaries for SS 2 and so on.  I used the same strategy when I got to the Schweser books as well.  Every 3rd study session, go back and do a quiz for the first study session and after 6 study sessions, go back and read the LOS summaries for the first study session.  I know it’s a little confusing.  Here is a excel document that will hopefully make it easier to see.

CFA Level 1 Study Plan

NOTE:  I have made 2 alternate plans that are less aggressive than this plan.  One is over 4 months, and the other over 5 months.  Visit my post, “Revised: How to Study for the CFA Level 1 Exam“.

It’s not a perfect system, but it does allow you to cover all the material continually throughout the four months.

As you can see from the image, in month 4, there is empty space at the end.  This is free space to do more exams, read over things you still don’t know 100%, read LOS summaries, or any combination of the sort.

In the end you will have read both the CFA and Schweser books (36 study sessions in total), read the Schweser LOS summaries 3 times, written 90 quizzes (2700 questions), and written 6 Schweser mock-exams (about 1200 questions).  This seems like a lot of studying, and it is, but there is so much content that you have to know off the top of your head that this amount of studying is necessary.

It gets pretty interesting as you complete quizzes and exams because you will actually start to see yourself improving.  I started out getting 40-50% on the quizzes; I then it started to slowly creep up to 60%, then 70%.  I hit a plateau at around 75% for a little while, but I just kept studying and finally broke 80%.  In my last few weeks I was getting over 90%.  Keeping track of your progress is important because it will give you a sense of accomplishment, and it will also give you a feedback loop to see where you need to study more.

If you put in the time and effort and keep the studying consistent, you will pass the exam.

Here is a summary of the key points to effectively study for the CFA Level 1 Exam:

  • Start studying 4 months before the exam (sign up well before this so you have all the material ready to go).
  • Dedicate 1-3 hours each day to study.
  • Dedicate 3-5 hours each day 2-3 weeks before the test date.
  • Plan for break days.  Make sure you have 1-2 days each week where you don’t do anything related to the CFA.
  • Sign up for a third party toolkit.  I recommend Schweser “Essential Study”.
  • Get your resources ready.  There will be 5 in total:
    • 1. CFA Body of Knowledge books
    • 2. Schweser Notes
    • 3. Schweser LOS Summaries
    • 4. Schweser Quizzes (5 quiz sets)
    • 5. Schweser Mock-Exams (Practice Exams)
  • Plan your study.  I suggest using the plan shown in the image above, but feel free to make your own or adjust the above to suit your needs.
  • BE CONSISTENT!  This is the most important.  Don’t study hard for a week, take 2 weeks off, study hard again, then take a break, etc…  The best way to retain knowledge is to consistently go over it with little breaks to give your mind a rest.
  • Track your progress.  Keep a list of your quiz and exam marks so you can compare and see where you need to improve.

Some other tips for the day of the exam that may be useful are:

  • Use the same calculator right from the beginning.  Get used to it and know it inside out.
  • Wear earplugs if you are easily distracted.  And practice doing exams with the earplugs in.
  • Do mock-exams in private.  Find a quiet place where you will not be interrupted.
  • Time yourself on mock-exams to make sure you are doing questions fast enough.
  • Drink enough water.  The day of the exam make sure you are hydrated enough, but don’t drink so much that you have to go to the bathroom every 20 minutes.
  • Eat light.  Eat a small breakfast and try not to eat an hour before the exam.  Your body will waste energy digesting; you need that energy to write the test.  But also bring a small snack so you’re not starving and have something to eat between the two exams.

I hope this has helped.  I know some of it may seem confusing, so please feel free to comment below and I will try and answer any questions you may have.

Thanks for reading and good luck out there!

Don’t forget that I have made 2 alternate plans for studying.  Check them out at, “Revised: How to Study for the CFA Level 1 Exam“.

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8 comments

  1. Manav Pathania · · Reply

    Nice post Matteo. If I decide to write the CFA, I will definitely use this approach.

    1. Thanks Manav! Hope the GMAT studying is going well and not driving you crazy yet.

  2. did you pass?

    1. Hi gh. Yup I did pass! I was averaging between 85%-95% on practice tests when I went in. The day of the exam I got 6 sections in the >70% (including the highest weighting section), 3 sections in the 51%-70%, and one section in the <50% (thankfully that was alternate investments which has the smallest weighting).

      If I were to weight it conservatively, I would say the minimum I would have got would be a 75%, if I weighted it closer to actual past performance (with some alteration because of exam nerves and being ill because of my ulcerative colitis), I'd say the range my score was in would be between a 78% and an 85%. I was shooting for at least 80% because I felt that would guarantee a pass (since you really have no clue what the passing rate will be each year).

      One thing I liked about the method I used is that it gave me a lot of confidence going in. I think my nerves were more settled than most. Also, because I did so many questions for practice, I finished the exam quite early. In a room of about 500 exam writers, I was one of the first 50-ish to leave (and that's with double checking my answers).

      A key to passing this exam is doing questions fast enough. Some people simply don't finish because of the time constraint. That's why I focused on doing so many practice questions and mock exams.

      Hope that helps you out! Thanks for the comment gh!

  3. Chady Abdelnour · · Reply

    Thank you for your post. I have a question, isn’t very hard to study all sessions of the CFA books in 1 month?

    1. Hi Chady,

      Studying all the CFA Sessions is definitely very hard. I don’t think anyone could do it.

      What I want to highlight in the post is that the key to success is covering the material multiple times. If you look at the Excel worksheet table, you’ll see that only the readings are done in one month (along with some quizzes and summaries which can be read fairly quickly). If you were to try and do all the readings, all the quizzes, all the exams, and all the summaries in one month you would go insane (and not retain very much).

      This strategy assumes the studier can read at an average rate (or maybe slightly above average). Reading all the sessions in one month is doable, it just really depends on your time. I was not working at the time so I had the time to read all the sessions in a month.

      If reading that much in one month feels daunting and not doable, then I suggest you read my follow-up post called “Revisited:How to Study for the CFA Level I Exam”. https://thefinancialintern.wordpress.com/2012/07/18/revisited-how-to-study-for-the-cfa-level-1-exam/ In this post I offer two alternative study plans. These plans spread the readings over 2 months instead of one. But be warned, there are downfalls to spreading the sessions out so far. I outline those problems in the post. Give it a read and hopefully it will help you out.

      The balance in studying for the CFA is the time-to-study/retention ratio. You want to give yourself enough time to go through the material so you comprehend it, but you want to go through it quick enough (and repeatedly) to make sure you can remember it and recall information you have learned. For some, the 4 month plan that has a quicker reading time frame works great. For others, they need to spread it out farther and possibly add an extra month to fully grasp the concepts.

      Hope that answers your question. Thanks so much for the comment. Really appreciate it Chady!

      Good luck out there!

  4. Hicham Laazaazia · · Reply

    Hello,

    Thank you for this post. I planning to sit for the June 2013 level 1 exam and I want to know if I can use the CFA body of knowledge books edition 2009 to study or do I have to get the new edition?

    1. Hey hicham. You might be able to get by with the 2009 edition. But I am pretty sure that when you register for the exam, you don’t have the choice to not purchase the books (or ebooks). I’m pretty sure the body of knowledge is part of the registration. Also, by using the old books, you might miss some new rules or changes in certain securities or policies.

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