FAQ's

The Chartered Financial Analyst (CFA®) designation is an international professional certification offered by the CFA® Institute (formerly AIMR) to financial analysts who complete a series of three examinations. The CFA® is a qualification for finance and investment professionals, particularly in the fields of investment management and financial analysis of stocks, bonds and their derivative assets. The CFA® Program is a graduate-level self-study program that combines a broad-based curriculum of investment principles with professional conduct requirements. It is designed to prepare you for a wide range of investment specialties that apply in every market all over the world.

Source: www.CFAinstitute.org/CFAprogram/Pages/index.aspx and http://en.wikipedia.org/wiki/ Chartered_Financial_Analyst

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» What is the eligibility criteria for undertaking the CFA® exam?

To enroll in the CFA® Program and register for your first exam, you must meet the entrance requirements:

» Have a bachelor's (or equivalent) degree

» or be in the final year of your bachelor's degree program at the time of registration

» or have four years of qualified, professional work experience

» or have a combination of work and college experience that totals at least four years (Note: Summer, part-time, and internship positions do not qualify)

» If you initially enroll/register as a final year undergraduate student with a degree in progress, you may not register for the Level II exam until you have earned your degree, or obtained work experience that meets the program's entrance requirements. At the time your degree is awarded, you may update your account education information to certify that your degree has been received.

» Understand the professional conduct requirements (you will be asked to sign the Professional Conduct Statement and Candidate Responsibility Statement)

» Be prepared to take the exams in English

» Effective 1 January 2011: Have a valid international travel passport (required for enrollment and exam registration).

Source: http://www.CFAinstitute.org/CFAprogram/process/enter/Pages/CFA_program_entrance_requirements.aspx

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» What are the benefits of the CFA® program?

The CFA® Program provides a strong foundation of the skills and knowledge needed to succeed in today's competitive world of investing and finance. Following are the major benefits of this program:

Global Recognition: With a six-decade history of maintaining a rigorous focus on globally relevant investment knowledge, the CFA® Program is the most widely known and respected investment credential in the world.

Career Advantage: Employers recognize the CFA® charter as the definitive standard by which to measure the competence, integrity, and dedication of serious investment professionals. Stand out at every stage of your career.

Practical Skills: The CFA® Program curriculum focuses on the practical knowledge and current skills necessary in the global investment management profession. These skills are immediately useful on the job.

Community: Earning the CFA® charter places you in the company of an elite group of nearly 90,000 respected investment professionals. Access to their collective expertise, networks, and resources is an invaluable asset.

Source: http://www.CFAinstitute.org/CFAprogram/benefits/Pages/index.aspx

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» What are some of the exam preparations tips for the CFA® program?

The CFA® Institute has provided some exam preparation tips for all levels of CFA® on its website. Some of the general exam preparation tips provided by the CFA® Institute are:

Carefully manage your time: Don't spend too much time on any one question or topic area. On average, you should allocate 1.5 minutes to each multiple choice question, including time to record your answer on the answer sheet.

Read the questions carefully: A careless "skimming" of the question may lead you to a completely different, and incorrect, answer.

Read each item carefully and eliminate obviously incorrect answers: If you have to guess and you can eliminate one of the responses, your odds of answering the question correctly are much higher. There is no penalty for guessing.

Mark your answers on the answer sheet as you complete each question: Some candidates mark their answers in the exam book and wait until the end of the exam to complete the answer sheet. This is not an advisable strategy.

Expect to encounter questions that you will not be able to answer correctly: There is a great deal of material to master and exam questions are challenging. Standard setters and the Board of Governors (at all three levels) take account of exam difficulty in setting Minimum Passing Scores.

Source: http://www.CFAinstitute.org/CFAprogram/exams/format/Pages/CFA_exam_question_formats.aspx

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» How to become a CFA® Charterholder?

To earn a CFA® charter, you study for three exams (Levels I, II, III) using an assigned curriculum. If you pass all three exams and meet the professional and ethical requirements, you can become a regular member of CFA® Institute, or 'charterholder".

To be recommended for regular membership you must have completed four years (48 months) of qualifying work experience in activities that consist to a majority extent of:

» Evaluating or applying financial, economic, and/or statistical data as part of the investment decision-making process involving securities or similar investments, which includes, but is not limited to, publicly traded and privately placed stocks, bonds, and mortgages and their derivatives; commodity-based derivatives and mutual funds; and other investment assets, such as real estate and commodities, if these other investment assets are held as part of a diversified, securities-oriented investment portfolio; or

» Supervising, directly or indirectly, persons who practice such activities; or

» Teaching such activities.

Source: www.CFAinstitute.org/CFAprogram/process/Pages/becoming_a_charterholder.aspx?intCamp=become_chrtrholder

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» What are the CFA® exam topic area weights?

CFA® Exam Topic Area Weights

Topic Area	Level I	Level II	Level III
Ethical and Professional Standards (total)	15	10	10
Investment Tools (total)	50	30-60	0
Corporate Finance	8	5-15	0
Economics	10	5-10	0
Financial Reporting and Analysis	20	15-25	0
Quantitative Methods	12	5-10	0
Asset Classes (total)	30	35-75	35-45
Alternative Investments	3	5-15	5-15
Derivatives	5	5-15	5-15
Equity Investments	10	20-30	5-15
Fixed Income	12	5-15	10-20
Portfolio Management and Wealth Planning (total)	5	5-15	45-55
Total	100	100	100

Source: http://www.CFAinstitute.org/CFAprogram/courseofstudy/Pages/topic_area_weights.aspx

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» What is the format of the CFA® exam?

The format of the CFA® exam is as follows:

Level I exams comprise only of multiple choice questions: Level I multiple choice questions are crafted with each of the incorrect responses (distracters) carefully constructed to represent common mistakes in either calculation or logic. A Level I examination consists of 240 questions to be completed in a six-hour time frame.

The Level II CFA® exam consists of 20 item sets - 10 on the morning session of the exam and 10 on the afternoon session. The Level III exam uses the essay format in the morning, and the item set format, with 10 item sets, in the afternoon. Item sets are sometimes called 'mini-cases'. Each item set on the CFA® exam consists of a vignette (or case statement) and six multiple choice items (questions). The length of a vignette ranges from about 1 page to 2.5 pages. The longer vignettes are those that include several tables of information, such as for a financial statement analysis, statistics, or fixed-income item set. The average length of the vignettes on the exam is about 1.5 pages.

The Level II and III exams are graded for 360 points, corresponding to the number of minutes on the exam. The 120 Level II items are equally weighted, 3 points each, with no penalty for guessing. At Level III, the morning essay exam is 180 points and the afternoon item set exam is 180 points. The Level III essay exam is given in the morning session and has a maximum score of 180 points. The essay exam typically has 10-15 questions, and questions may have multiple parts. The points for each question and each question part are given in the exam.

Each essay question consists of one or more parts (A, B, C, etc.). Some parts will direct you to write your answer in a template. Instructions in bold print immediately following the question will direct you to the page number of each template. All other questions should be answered on the lined page(s) following the question. For these questions, label each part of your answer clearly (A, B, C, or i, ii, iii, etc.)

If you use all of the designated lined pages, extra lined pages are provided at the back of the book. To use these pages, place a check mark in the box at the bottom of the last page designated for that answer and label the extra pages with the appropriate question number

Source: http://www.CFAinstitute.org/CFAprogram/exams/format/Pages/CFA_exam_question_formats.aspx

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» Where are the CFA® exams held in India?

The CFA® institute holds the CFA® exams at the following places in India if permitted:

Bangalore: Bangalore International Exhibition Centre
(http://www.biec.in/index.php?page=contact)

New Delhi: India Expo Centre
(http://www.indiaexpomart.com/ContactUs.aspx)

Mumbai: Thakur College of Engineering & Technology
(http://www.tcetmumbai.in/location.htm)

Source: http://www.CFAinstitute.org/CFAprogram/process/ Documents/june_test_centers.pdf

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» When are the CFA® exams held?

The CFA® Level 1 exams are held twice a year, that is on the first Sunday (Saturday in some countries) of December and the first Sunday (Saturday in some countries) of June in India. The CFA® Level 2 and CFA® Level 3 exams are only held on the first Sunday(Saturday in some countries) of June every year.

Source: http://www.CFAinstitute.org/CFAprogram/exams/calendar/Pages/index.aspx

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» Where can I get sample questions for CFA® exams?

Some sample questions for CFA® Level 1, CFA® Level 2 and CFA® Level 3 are provided by the CFA® Institute on their website. Please log on to http://www.CFAinstitute.org/CFAprogram/courseofstudy/samples/Pages/index.aspx to access those sample questions and mock tests

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» What is FRM®?

The Financial Risk Manager (FRM®) certification is the globally recognized benchmark and professional designation for financial risk managers. If you are in financial risk management, or considering a career in it, then earning the FRM® designation is the natural next step. The FRM® program is rigorous and is designed to measure a candidate's grasp of the latest technical and industry knowledge; successful completion of the program signifies a candidate's ability to keep pace with a rapidly changing financial landscape.

Source: http://www.garp.org/FRM/overview/overview.aspx

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» What are the benefits or career prospects of the FRM® program?

In the decade ahead, risk management will play a critical role in guiding financial firms through dynamic, changing times and will continue its evolution to a core strategic business practice. Whether you work in banking, finance, consulting or risk management, the FRM® certification holds many substantive benefits for you and your firm:

Differentiation
The FRM® certification, as the globally recognized benchmark professional designation for financial risk managers, clearly differentiates you from your peers, giving you a competitive advantage with colleagues and clients alike

You will be more desirable to executive recruiters and hiring managers since they are seeking FRM® holders for senior risk management jobs at increasing rates. Employers value the charter, with over 48 of the top 50 banks in the world (by total assets) having significant FRM® holder presence

Expertise
Achieving a passing score on the FRM® Exam, which emphasizes real-world risk management scenarios, is an indicator that a FRM® holder's skill set is sufficient to react to the financial marketplace's ever-changing demands

Studying the broad concepts underlying risk management in today's dynamic market environment will give you a holistic view and appreciation for the role risk management plays in an organization

Networking
Becoming a FRM® holder means that you will become part of an elite group of over 24,000 FRM® holders in 90 countries across the globe

The FRM® certification provides you with a platform to network with some of the world's leading financial risk management professionals, expanding your professional opportunities within the world of finance

Leadership
Mastering the content of the FRM® exam represents a commitment to the risk management profession, and to your career overall, positioning you as a leader in the field

Attaining the FRM® designation provides you with the feeling of personal achievement and the satisfaction of conquering an exam developed by the best risk management practitioners in the world

Source: http://www.garp.org/FRM/career-benefits/career-benefits.aspx

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» How to get certified as FRM®?

In order to be certified as a Financial Risk Manager (FRM®) and be able to use the FRM® acronym after your name, the following is required:

» A passing score on both Part I and Part II of the FRM® Examination

» A minimum of two years work experience in the area of financial risk management or another related field including, but not limited to, trading, portfolio management, academic or industry research, economics, auditing, risk consulting, and/or risk technology.

Source: http://www.garp.org/FRM/overview/requirements/requirements.aspx

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» What is the curriculum of FRM® Exam Part I and FRM® Exam Part II?

The FRM Exam Part I will cover the following topics:

» Financial Markets and Products
» Foundations of Risk Management
» Quantitative Analysis
» Valuation and Risk Models

The FRM Exam Part II will cover the following topics:

» Market Risk Measurement and Management
» Credit Risk Measurement and Management
» Operational and Integrated Risk Management
» Risk Management and Investment Management
» Current Issues in Financial Markets

Source: http://www.garp.org/FRM/overview/faqs/preparing-for-the-FRM-exam.aspx

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» What is the format of the FRM® exam?

The FRM® Exam Part I will have 100 multiple-choice questions. The FRM® Exam Part II will have 80 multiple-choice questions. The exact number of questions is subject to minimal change.

Source: http://www.garp.org/FRM/overview/faqs/preparing-for-the-FRM-exam.aspx

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» When are the FRM® Part I exam and Part II exam held?

Both Parts I and Part II of the FRM® Exam will always be offered on the third Saturday of May and the third Saturday of November, annually.

Source: http://www.garp.org/FRM/overview/faqs/general-FRM-exam.aspx

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» Where will the FRM® Exam Part I and Part II be held?

Both the FRM® Exam Part I and Part II will be administered at the same Exam Sites. Log on to http://www.garp.org/FRM/other/exam-sites.aspx to see a complete list of Exam sites.

Source: http://www.garp.org/FRM/overview/overview.aspx

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» How are the CFA® exams graded?

The minimum passing score (MPS) for each level of the exam is determined by the CFA Institute Board of Governors each year after the administration of the exams. Neither the MPS nor individual candidate scores have ever been released. To set the MPS before the administration of the exams would require that an absolute standard be applied without regard to the difficulty of the exams; this could potentially be very unfair to candidates, especially across time.

The score matrix provided on the exam results is an indicator of overall performance and cannot be used to determine approximate scores or pass/fail status. The “<=50%” range is considered poor; “51%–70%” is considered poor to average; “>70%” is considered average to above average.

Please visit: http://www.cfainstitute.org/cfaprogram//Documents/the_cfa_program_our_fifth_decade.pdf

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» When are the CFA® exam results available?

Levels I and II candidates receive their examination results at the end of July (June examination) and at the end of January (December examination); Level III candidates receive their results in mid-August.

Source: http://www.cfainstitute.org/cfaprogram//Documents/the_cfa_program_our_fifth_decade.pdf

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» What kind of calculators are allowed for the CFA® exam?

Only two calculator models are authorized for use during the exams:

Texas Instruments BA II Plus (including BA II Plus Professional)

Hewlett Packard 12C (including the HP 12C Platinum)

Both authorized models are widely available through retail stores or online. Buy an approved calculator early so you can practice using it as you study.

Source: http://www.cfainstitute.org/cfaprogram/exams/Pages/policies.aspx

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