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Cfa level i overview (r. g. quintero & co. 2015)

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Ronald Quintero

CFA Level I Introduction, by R. G. Quintero & Co. (www.rgquintero.com), provider of CFA review programs delivered live in New York and Connecticut and archived on the Internet. We also offer other financial training programs on topics that include mergers & acquisitions, valuations, financial statement analysis, financial reporting, turnarounds & workouts, bankruptcy, and managing credit risk.

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R. G. QUINTERO & CO. CFA LEVEL I Q-NOTES INTRODUCTION www.rgquintero.com Provider of live classes in New York and Connecticut
CFA OVERVIEW First awarded by ICFA in 1963 Charter holders 123,836 (10/14) 137 nations and territories 149,381 candidates from 181 countries registered for the CFA exam in June 2014 June 2014 exam 255 centers 196 cities in 91 countries 75% of candidates from outside the U.S. Earning a charter Minimum 2 years Average candidate requires 4 years Level I - Introduction 息R. G. Quintero & Co. 2
INTERNATIONAL GOLD STANDARD The CFA program has been characterized by The Economist as the gold standard of higher education 99 of 186 analysts recognized by FT/StarMine Global Analyst awards are CFA charter holders Level I - Introduction 息R. G. Quintero & Co. 3
Level I - Introduction 4息R. G. Quintero & Co.
Level I - Introduction 息R. G. Quintero & Co. 5
Level I - Introduction 息R. G. Quintero & Co. 6
Level I - Introduction 息R. G. Quintero & Co. 7
VALUABLE TRAINING CFA or completion of 1 or more levels Is used as a screen by many employers Enhances application for MBA programs Satisfies licensing requirements of many regulatory bodies Enhances r辿sum辿 of individuals Lacking formal business education Graduating from less-well known schools More than 130 universities have joined the CFA Partners Program, incorporating CFA into their educational curriculum Level I - Introduction 息R. G. Quintero & Co. 8
Level I - Introduction 息R. G. Quintero & Co. 9
Level I - Introduction 息R. G. Quintero & Co. 10 CFA CANDIDATES: 1993 AND 2008 1993 candidates Ave. age: 31 68% from U.S. 78% male 6/08 candidates Ave. age: 30 68% from outside U.S. 73% male Source: CFA Institute
Level I - Introduction 息R. G. Quintero & Co. 11
Level I - Introduction 息R. G. Quintero & Co. 12
TOP US EMPLOYERS OF CFA INSTITUTE MEMBERS Level I - Introduction 息R. G. Quintero & Co. 13 Source: CFA Institute, 1/13
Level I - Introduction 息R. G. Quintero & Co. 14
JOB FUNCTIONS OF CFA CHARTER HOLDERS Level I - Introduction 息R. G. Quintero & Co. 15Source: CFA Institute, 10/14
Level I - Introduction 息R. G. Quintero & Co. 16
Level I - Introduction 息R. G. Quintero & Co. 17
Level I - Introduction 息R. G. Quintero & Co. 18
Level I - Introduction 息R. G. Quintero & Co. 19
Level I - Introduction 息R. G. Quintero & Co. 20
Level I - Introduction 息R. G. Quintero & Co. 21 SUBJECTS COVERED BY THE CFA EXAM SUBJECT CATEGORIES Ethics & professional standards Performance presentation Portfolio management Investment tools Quantitative analysis Economics Accounting Corporate finance Asset valuation Equity analysis Fixed-income securities Derivatives Alternative investments All questions are based on the CFA Program Curriculum Key concepts are those that address the Learning Outcome Statements
Level I - Introduction 息R. G. Quintero & Co. 22
Level I - Introduction 息R. G. Quintero & Co. 23 COMPARING LEVELS I, II, AND III Level I Level II Level III Topic Focus Investment tools Asset valuation Portfolio mgmt. Learning Focus Basic knowledge Ethical standards Applications Ethical standards Synthesis Ethical standards
Level I - Introduction 息R. G. Quintero & Co. 24 NATURE OF THE CFA EXAM All-day exam 9AM to 12PM and 2PM to 5PM Format Level I Multiple choice Level II Multiple choice Level III 50% multiple choice 50% problems and essays
CFA PROGRAM PROCESS Education Advisory Committee Global Practice Analysis Candidate Body of Knowledge Curriculum Council of Examiners Examination CFA Institute & Member Volunteers Grading CFA Institute, Member Volunteers & Consultants Standard setting Board of Governors Minimum passing score Level I - Introduction 息R. G. Quintero & Co. 25
CREATING THE CFA EXAM Council of Examiners (COE), working with the CFA Program staff, develops Exam over 8-mo. period beginning June (12 mos. prior to Exam) CFA Program staff includes CFA subject-matter-experts trained in question writing Questions are developed by > 70 writers Reviewed by > 100 reviewers Clarity and accuracy Neutrality in language, culture, and practice Consistency with readings, and LOSs Level I - Introduction 息R. G. Quintero & Co. 26
Level I - Introduction 息R. G. Quintero & Co. 27 CFA EXAM QUESTION WRITING TIMETABLE May/June COE writes General Marching Orders and assigns to COE members July New COE members trained August Writers submit initial question drafts Sep Jan COE meets to review and revise questions Feb/March Staff and external reviews by subject matter experts, generalists, and global experts Feedback to question writers Writers submit final question drafts March COE Editorial Board selects best questions; final revisions March/April Staff quality review of questions, guideline answers, and grading keys April Deliver exams to secure printer Level I team follows a compressed schedule 2 times/year CFA Institute
Level I - Introduction 息R. G. Quintero & Co. 28 POST-EXAM ANALYSIS Questions evaluated for Appropriate difficulty Appropriate discrimination Fully functioning distractors Construct validity Construct bias Content bias Studies have found questions to be valid and unbiased
Level I - Introduction 息R. G. Quintero & Co. 29 Source: AIMR
Level I - Introduction 息R. G. Quintero & Co. 30
Level I - Introduction 息R. G. Quintero & Co. 31
Level I - Introduction 息R. G. Quintero & Co. 32
Level I - Introduction 息R. G. Quintero & Co. 33
Level I - Introduction 息R. G. Quintero & Co. 34 STOPPED AT THE STARTING GATE Only 1 out of every 5 candidates completes the program in 5 years A large % of candidates who fail Level I exam choose not to retake the Exam
Level I - Introduction 息R. G. Quintero & Co. 35 REASONS THAT SOME PEOPLE FAIL THE CFA EXAM Inadequate preparation Failure to devote the time Failure to use time wisely Lack of positive attitude 1st time a throw away Poor preparation Poor exam-taking techniques Compelled to take exam Educational shortcomings Language difficulties Personal problems Not the cream of the crop
Level I - Introduction 息R. G. Quintero & Co. 36 PROGRAM APPROACH In-class review of CFA Program Curriculum In-class review of recurring questions Discuss effective exam-taking techniques Class problems Level I Q-Notes Schweser Level I Study Notes SchweserPro QBank Accessible instructors Free online classes
Level I - Introduction 息R. G. Quintero & Co. 37 KEYS TO PASSING THE CFA EXAM Preparation Knowledge Test questions Confidence Controllable factors Exam-taking techniques
Level I - Introduction 息R. G. Quintero & Co. 38 EXAM PREPARATION Establish and stick to milestones Peruse (but dont feel obliged to read) all of the CFA Program Curriculum Schweser Notes and Q-Notes Develop cheat sheets after each session Learning Outcome Statements Weekly review Passive vs. active knowledge Mnemonic learning devices
Level I - Introduction 息R. G. Quintero & Co. 39 EXAM PREPARATION, cont. Study groups Study for weaknesses Dont overlook strengths Dont hesitate to contract RGQ&Co. instructors Ensure basic understanding of all 18 sessions CFA Institute Guideline Topic Weights May Heightened review Do lots of problems Weekend and day before Exam
Level I - Introduction 息R. G. Quintero & Co. 40
Level I - Introduction 息R. G. Quintero & Co. 41
Level I - Introduction 息R. G. Quintero & Co. 42 CFAI LEVEL I SAMPLE AND MOCK EXAMS Topic-Based Exams Mock Exams Availability Available January 2015 Exam access Online Online Question format Multiple choice Multiple choice Questions Short practice tests 240 Timed NA 360 minutes Topic coverage Partial Partial Includes past exam questions? Yes Yes Cost None None Feedback Answers provided after each question Answers, discussions, LOS & curriculum refs. provided at end Able to print exam & solutions? No No
Level I - Introduction 息R. G. Quintero & Co. 43
Level I - Introduction 息R. G. Quintero & Co. 44
Level I - Introduction 息R. G. Quintero & Co. 45
Level I - Introduction 息R. G. Quintero & Co. 46
Level I - Introduction 息R. G. Quintero & Co. 47
Level I - Introduction CONTROLLABLE FACTORS 2/18standard fee registration deadline 3/18final registration deadline 3/24deadline for accommodation requests 4/20deadline for test center change requests Early Mayexam admission tickets available online 6/6examination day Rest Nourishment Clothing Psychological factors息R. G. Quintero & Co. 48
Level I - Introduction 息R. G. Quintero & Co. 49 CONTROLLABLE FACTORS, cont. Get to the exam site by 8AM Equipment HP 12C (including HP12C Platinum) TI BAII Plus (including BAII Plus Professional) Fresh batteries; backup calculator Plenty of #2 or HB pencils Loose eraser(s) Use lavatory before the Exam starts Seat selection
Level I - Introduction 息R. G. Quintero & Co. 50 ABOUT THE EXAM All multiple choice 120 in the morning 120 in the afternoon You will be given a full 3 hours in AM and PM despite start time Most of our students finish with 0 - 10 min. remaining Questions grouped by topic Only permitted to bring calculator, pencils, and erasers to seat Designated place for other belongings All questions of equal value No penalty for wrong answers 30%-40% of questions require numerical calculation(s)
Level I - Introduction 息R. G. Quintero & Co. 51 NATURE OF ITEM-SET QUESTIONS Stem + correct answer + 2 distracters Reduced from 3 distracters Question types Sentence completion Question 2 columns
Level I - Introduction 息R. G. Quintero & Co. 52 SENTENCE-COMPLETION QUESTION An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. The most likely effect of the appropriate adjustments would be to increase that companys: A. Return on assets. B. Debt-to-equity ratio. C. Interest coverage ratio. CFA Institute
Level I - Introduction 息R. G. Quintero & Co. 53 QUESTION WITH 3 DISTRACTORS An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. Which of the following is most likely to increase as a result of the appropriate adjustments being made to that companys financial statements? A. Return on assets. B. Debt-to-equity ratio. C. Interest coverage ratio. CFA Institute
Level I - Introduction 息R. G. Quintero & Co. 54 2-COLUMN QUESTION An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. The most likely effect of the appropriate adjustments on the companys return on assets (ROA) and debt-to-equity ratio, respectively, would be: Debt-to-equity ROA Ratio A. Increase Increase B. Increase Decrease C. Decrease Increase CFA Institute
Level I - Introduction 息R. G. Quintero & Co. 55 2-COLUMN QUESTION: ALT. FORMAT An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. What is the most likely affect of the appropriate adjustments on the companys: Return on Debt-to-equity Assets Ratio A. Increase Increase B. Increase Decrease C. Decrease Increase CFA Institute
Level I - Introduction 息R. G. Quintero & Co. 56 2-COLUMN QUESTION: ALT. FORMAT An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. Will the appropriate adjustments most likely increase the companys: Return on Debt-to-equity Assets? Ratio? A. No No B. No Yes C. Yes No CFA Institute
Level I - Introduction 息R. G. Quintero & Co. 57 OBSERVATIONS ABOUT STEMS Exam doesnt use EXCEPT, TRUE, or FALSE in item stems, and avoids use of NOT Common stem wording qualifiers Most likely, least likely, best described, most appropriate, most accurate, least appropriate, least accurate Each stem supports only 1 item
Level I - Introduction 息R. G. Quintero & Co. 58 ABOUT DISTRACTORS Narrative distractors typically listed from shortest to longest Numerical distractors ordered from smallest to largest number Agree grammatically with the stem Language common to all distractors is placed in stem
Level I - Introduction 息R. G. Quintero & Co. 59 DISTRACTORS NOT USED All of the above None of the above A and B only (or other variations) Cannot determine Cannot calculate Not enough information to determine
Level I - Introduction 息R. G. Quintero & Co. 60 HOW THE EXAM IS GRADED Exams are machine graded Periodic tests to verify accuracy 8 scanning stations w. 2 persons/station 7 days Graded 119,446 tests in 6/12 Visual inspection of forms Manual review of blanks & doublemarks Exam is graded on the curve
Level I - Introduction 息R. G. Quintero & Co. 61 HOW WELL DO I HAVE TO DO? Ave. Level I score 1963 2005 45%* June 2005 Level I Exam Average 53%* Ave. of top 27% 62%** Ave. of bottom 27% 44%** Min. passing score 57%** 137 right answers out of 240 *Based on data disclosed by CFAI **Based on statistical inference by RGQ&Co. of CFAI data
Level I - Introduction 息R. G. Quintero & Co. 62 EXAM-TAKING TECHNIQUES Make sure that candidate ID is correctly entered Listen carefully to, and follow, proctors instructionsavoid conduct violations Peruse Examconfirm 120 questions in AM; 120 in PM Attack questions Sequentially, or Start with best subjects to build confidence and momentum Keep close track of time 1遜 minutes/question Dont obsess over any question Be careful to answer question in appropriate oval Make sure that erasures are complete
Level I - Introduction 息R. G. Quintero & Co. 63 EXAM-TAKING TECHNIQUES, cont. Avoid making extraneous marks on answer sheet Read questions carefully Read all alternative answers Choose best answer Because you know Process of elimination Guess (no penalty for wrong answers) Numerical answer may be closest (but not precise) result
Level I - Introduction 息R. G. Quintero & Co. 64 EXAM-TAKING TECHNIQUES, cont. Come back to difficult questions after all have been answered Consider readings being tested when answering questions Always answer based on the CFA Program Curriculum, even if you believe it is wrong Look for shortcuts You may not have to fully solve question to eliminate all wrong answers Ignore patterns in answers Numerical answers listed from smallest to largest Word answers listed in order of sentence length
Level I - Introduction 息R. G. Quintero & Co. 65 EXAM-TAKING TECHNIQUES, cont. Remain Calm Confident Answer all questions Use all time permitteddont leave early
Level I - Introduction 息R. G. Quintero & Co. 66 BEWARE OF TRAPS Accurate statements that dont match question Distracters Irrelevant terminology Data unnecessary to compute answer Numerical answers that dont precisely agree with any of the alternatives Questions with double negatives Exam ambiguities and errors
Level I - Introduction FEES AND REGISTRATION DEADLINES FOR JUNE 2015 EXAM 2/18/15 3/18/15 Program enrollment $450 $450 Exam registration $825 $1,210 Total $1,275 $1,660 Note: Curriculum is provided in e-book format to all candidates. Candidates may obtain printed books for $150. 息R. G. Quintero & Co. 67
Level I - Introduction OTHER KEY DATES June 2015 Exam Requests for disability accommodation; religious alternative dates 3/24/15 Test center change requests 4/20/15 Admission tickets available online May 2015 Exam date 6/6/15 Results available July 2015 息R. G. Quintero & Co. 68
息R. G. Quintero & Co. 69 YOU MUST KEEP THE FOLLOWING ON TOP OF YOUR DESK Examination admission ticket Valid passport with photo See guidelines on CFA Institute Website Name must agree with admission ticket Approved calculator(s) HP 12C (including 12C Platinum, 12C Platinum 25th or 30th Anniversary edition, and 12C Prestige) TI BAII Plus (including BAII Plus Professional) Writing instruments Pencils for Levels I and II (#2 or HB) Pens and pencils for Level III Level I - Introduction
息R. G. Quintero & Co. 70 YOU MAY KEEP THE FOLLOWING ON YOUR DESK Erasers Calculator case, keystroke cards, batteries (W/O packaging) & screwdriver Manual pencil sharpener (no knives) Eyeglasses (no case) Earplugs Wristwatch (no audible alarm or timer) Level I - Introduction
息R. G. Quintero & Co. 71 YOU MAY KEEP THE FOLLOWING IN POCKETS OR UNDER CHAIR Wallet Eyeglasses case Earplugs Medicine, tissues, and other medically necessary or personal items Gum, hard candy, cough drops Keys Level I - Introduction
息R. G. Quintero & Co. 72 ITEMS PROHIBITED IN TESTING ROOM Food or drinks Bags or carrying cases of any kind (backpacks, handbags, briefcases, transparent bags, etc.) Study materials, notes, scratch papers, calculator manuals, etc. Highlighters, correction fluid, correction tape, or rulers Knives of any type Cellular telephones, cameras, pagers, computers, PDAs, or other communication or photographic devices Clock or watch with engaged audible alarms/timersLevel I - Introduction
MISCONDUCT RULES Violations can result in Dismissal from test center Other penalties, including Voiding of exam results Suspension or termination of candidacy 696 exam conduct cases during F2011 Misconduct includes Creating a disturbance Giving or receiving help Opening, working on, or reading exam during unauthorized time Level I - Introduction 息R. G. Quintero & Co. 73
MISCONDUCT RULES, cont. Misconduct includes, cont. Taking part in an act of impersonation or other forms of cheating Failing to follow proctors directions Using books, unapproved calculators, headsets, rulers, listening devices, pagers, cell phone, recording or photo devices, papers of any kind, study aids Writing on admission ticket Failing to follow CFA Institute conditions, requirements, policies, or procedures Level I - Introduction 息R. G. Quintero & Co. 74
Level I - Introduction 息R. G. Quintero & Co. 75 ABOUT RON QUINTERO Ron has led and taught more than 300 CFA review programs over the past 20 years in North America, Europe, and Asia. These programs have included open-enrollment programs, as well as in-house programs for leading investment banks, commercial banks, international monetary institutions, financial services organizations, and educational institutions. Stamford classes are offered through RGQ&Co.; NYC classes through Sharp Seminars. Ron has also taught CFA review programs offered by NYSSA and FitchLearning, in addition to serving for a number of years as the director of CFA review programs of the New York Institute of Finance. Besides being a CFA charter holder, he is a CPA, CDBV, CFE, CFF, CFP, CIRA, CMA, CTP, and ABV. To attain these licenses, Ron passed more than 20 examinationsall on the first sitting. He shares the approaches that he has successfully applied with his students. Ron is an award-winning scholar, lecturer and writer, and a CFA practitioner with real-world experience. Before starting his firm in 1988, he was a member of the Investment Banking Department at Bear Stearns and the Management Consulting Department of KPMG.
Level I - Introduction 息R. G. Quintero & Co. 76 FOLLOW-UP INFORMATION CFA Exam & R. G. Quintero & Co. CFA Review www.cfainstitute.org www.rgquintero.com Ronald G. Quintero, CPA, CFA, + 8 more (212) 327-0200 (201) 220-9181 mobile (212) 327-0225 FAX q@rgquintero.com rgquintero on Twitter Ron Quintero on LinkedIn

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Cfa level i overview (r. g. quintero & co. 2015)

  • 1. R. G. QUINTERO & CO. CFA LEVEL I Q-NOTES INTRODUCTION www.rgquintero.com Provider of live classes in New York and Connecticut
  • 2. CFA OVERVIEW First awarded by ICFA in 1963 Charter holders 123,836 (10/14) 137 nations and territories 149,381 candidates from 181 countries registered for the CFA exam in June 2014 June 2014 exam 255 centers 196 cities in 91 countries 75% of candidates from outside the U.S. Earning a charter Minimum 2 years Average candidate requires 4 years Level I - Introduction 息R. G. Quintero & Co. 2
  • 3. INTERNATIONAL GOLD STANDARD The CFA program has been characterized by The Economist as the gold standard of higher education 99 of 186 analysts recognized by FT/StarMine Global Analyst awards are CFA charter holders Level I - Introduction 息R. G. Quintero & Co. 3
  • 4. Level I - Introduction 4息R. G. Quintero & Co.
  • 5. Level I - Introduction 息R. G. Quintero & Co. 5
  • 6. Level I - Introduction 息R. G. Quintero & Co. 6
  • 7. Level I - Introduction 息R. G. Quintero & Co. 7
  • 8. VALUABLE TRAINING CFA or completion of 1 or more levels Is used as a screen by many employers Enhances application for MBA programs Satisfies licensing requirements of many regulatory bodies Enhances r辿sum辿 of individuals Lacking formal business education Graduating from less-well known schools More than 130 universities have joined the CFA Partners Program, incorporating CFA into their educational curriculum Level I - Introduction 息R. G. Quintero & Co. 8
  • 9. Level I - Introduction 息R. G. Quintero & Co. 9
  • 10. Level I - Introduction 息R. G. Quintero & Co. 10 CFA CANDIDATES: 1993 AND 2008 1993 candidates Ave. age: 31 68% from U.S. 78% male 6/08 candidates Ave. age: 30 68% from outside U.S. 73% male Source: CFA Institute
  • 11. Level I - Introduction 息R. G. Quintero & Co. 11
  • 12. Level I - Introduction 息R. G. Quintero & Co. 12
  • 13. TOP US EMPLOYERS OF CFA INSTITUTE MEMBERS Level I - Introduction 息R. G. Quintero & Co. 13 Source: CFA Institute, 1/13
  • 14. Level I - Introduction 息R. G. Quintero & Co. 14
  • 15. JOB FUNCTIONS OF CFA CHARTER HOLDERS Level I - Introduction 息R. G. Quintero & Co. 15Source: CFA Institute, 10/14
  • 16. Level I - Introduction 息R. G. Quintero & Co. 16
  • 17. Level I - Introduction 息R. G. Quintero & Co. 17
  • 18. Level I - Introduction 息R. G. Quintero & Co. 18
  • 19. Level I - Introduction 息R. G. Quintero & Co. 19
  • 20. Level I - Introduction 息R. G. Quintero & Co. 20
  • 21. Level I - Introduction 息R. G. Quintero & Co. 21 SUBJECTS COVERED BY THE CFA EXAM SUBJECT CATEGORIES Ethics & professional standards Performance presentation Portfolio management Investment tools Quantitative analysis Economics Accounting Corporate finance Asset valuation Equity analysis Fixed-income securities Derivatives Alternative investments All questions are based on the CFA Program Curriculum Key concepts are those that address the Learning Outcome Statements
  • 22. Level I - Introduction 息R. G. Quintero & Co. 22
  • 23. Level I - Introduction 息R. G. Quintero & Co. 23 COMPARING LEVELS I, II, AND III Level I Level II Level III Topic Focus Investment tools Asset valuation Portfolio mgmt. Learning Focus Basic knowledge Ethical standards Applications Ethical standards Synthesis Ethical standards
  • 24. Level I - Introduction 息R. G. Quintero & Co. 24 NATURE OF THE CFA EXAM All-day exam 9AM to 12PM and 2PM to 5PM Format Level I Multiple choice Level II Multiple choice Level III 50% multiple choice 50% problems and essays
  • 25. CFA PROGRAM PROCESS Education Advisory Committee Global Practice Analysis Candidate Body of Knowledge Curriculum Council of Examiners Examination CFA Institute & Member Volunteers Grading CFA Institute, Member Volunteers & Consultants Standard setting Board of Governors Minimum passing score Level I - Introduction 息R. G. Quintero & Co. 25
  • 26. CREATING THE CFA EXAM Council of Examiners (COE), working with the CFA Program staff, develops Exam over 8-mo. period beginning June (12 mos. prior to Exam) CFA Program staff includes CFA subject-matter-experts trained in question writing Questions are developed by > 70 writers Reviewed by > 100 reviewers Clarity and accuracy Neutrality in language, culture, and practice Consistency with readings, and LOSs Level I - Introduction 息R. G. Quintero & Co. 26
  • 27. Level I - Introduction 息R. G. Quintero & Co. 27 CFA EXAM QUESTION WRITING TIMETABLE May/June COE writes General Marching Orders and assigns to COE members July New COE members trained August Writers submit initial question drafts Sep Jan COE meets to review and revise questions Feb/March Staff and external reviews by subject matter experts, generalists, and global experts Feedback to question writers Writers submit final question drafts March COE Editorial Board selects best questions; final revisions March/April Staff quality review of questions, guideline answers, and grading keys April Deliver exams to secure printer Level I team follows a compressed schedule 2 times/year CFA Institute
  • 28. Level I - Introduction 息R. G. Quintero & Co. 28 POST-EXAM ANALYSIS Questions evaluated for Appropriate difficulty Appropriate discrimination Fully functioning distractors Construct validity Construct bias Content bias Studies have found questions to be valid and unbiased
  • 29. Level I - Introduction 息R. G. Quintero & Co. 29 Source: AIMR
  • 30. Level I - Introduction 息R. G. Quintero & Co. 30
  • 31. Level I - Introduction 息R. G. Quintero & Co. 31
  • 32. Level I - Introduction 息R. G. Quintero & Co. 32
  • 33. Level I - Introduction 息R. G. Quintero & Co. 33
  • 34. Level I - Introduction 息R. G. Quintero & Co. 34 STOPPED AT THE STARTING GATE Only 1 out of every 5 candidates completes the program in 5 years A large % of candidates who fail Level I exam choose not to retake the Exam
  • 35. Level I - Introduction 息R. G. Quintero & Co. 35 REASONS THAT SOME PEOPLE FAIL THE CFA EXAM Inadequate preparation Failure to devote the time Failure to use time wisely Lack of positive attitude 1st time a throw away Poor preparation Poor exam-taking techniques Compelled to take exam Educational shortcomings Language difficulties Personal problems Not the cream of the crop
  • 36. Level I - Introduction 息R. G. Quintero & Co. 36 PROGRAM APPROACH In-class review of CFA Program Curriculum In-class review of recurring questions Discuss effective exam-taking techniques Class problems Level I Q-Notes Schweser Level I Study Notes SchweserPro QBank Accessible instructors Free online classes
  • 37. Level I - Introduction 息R. G. Quintero & Co. 37 KEYS TO PASSING THE CFA EXAM Preparation Knowledge Test questions Confidence Controllable factors Exam-taking techniques
  • 38. Level I - Introduction 息R. G. Quintero & Co. 38 EXAM PREPARATION Establish and stick to milestones Peruse (but dont feel obliged to read) all of the CFA Program Curriculum Schweser Notes and Q-Notes Develop cheat sheets after each session Learning Outcome Statements Weekly review Passive vs. active knowledge Mnemonic learning devices
  • 39. Level I - Introduction 息R. G. Quintero & Co. 39 EXAM PREPARATION, cont. Study groups Study for weaknesses Dont overlook strengths Dont hesitate to contract RGQ&Co. instructors Ensure basic understanding of all 18 sessions CFA Institute Guideline Topic Weights May Heightened review Do lots of problems Weekend and day before Exam
  • 40. Level I - Introduction 息R. G. Quintero & Co. 40
  • 41. Level I - Introduction 息R. G. Quintero & Co. 41
  • 42. Level I - Introduction 息R. G. Quintero & Co. 42 CFAI LEVEL I SAMPLE AND MOCK EXAMS Topic-Based Exams Mock Exams Availability Available January 2015 Exam access Online Online Question format Multiple choice Multiple choice Questions Short practice tests 240 Timed NA 360 minutes Topic coverage Partial Partial Includes past exam questions? Yes Yes Cost None None Feedback Answers provided after each question Answers, discussions, LOS & curriculum refs. provided at end Able to print exam & solutions? No No
  • 43. Level I - Introduction 息R. G. Quintero & Co. 43
  • 44. Level I - Introduction 息R. G. Quintero & Co. 44
  • 45. Level I - Introduction 息R. G. Quintero & Co. 45
  • 46. Level I - Introduction 息R. G. Quintero & Co. 46
  • 47. Level I - Introduction 息R. G. Quintero & Co. 47
  • 48. Level I - Introduction CONTROLLABLE FACTORS 2/18standard fee registration deadline 3/18final registration deadline 3/24deadline for accommodation requests 4/20deadline for test center change requests Early Mayexam admission tickets available online 6/6examination day Rest Nourishment Clothing Psychological factors息R. G. Quintero & Co. 48
  • 49. Level I - Introduction 息R. G. Quintero & Co. 49 CONTROLLABLE FACTORS, cont. Get to the exam site by 8AM Equipment HP 12C (including HP12C Platinum) TI BAII Plus (including BAII Plus Professional) Fresh batteries; backup calculator Plenty of #2 or HB pencils Loose eraser(s) Use lavatory before the Exam starts Seat selection
  • 50. Level I - Introduction 息R. G. Quintero & Co. 50 ABOUT THE EXAM All multiple choice 120 in the morning 120 in the afternoon You will be given a full 3 hours in AM and PM despite start time Most of our students finish with 0 - 10 min. remaining Questions grouped by topic Only permitted to bring calculator, pencils, and erasers to seat Designated place for other belongings All questions of equal value No penalty for wrong answers 30%-40% of questions require numerical calculation(s)
  • 51. Level I - Introduction 息R. G. Quintero & Co. 51 NATURE OF ITEM-SET QUESTIONS Stem + correct answer + 2 distracters Reduced from 3 distracters Question types Sentence completion Question 2 columns
  • 52. Level I - Introduction 息R. G. Quintero & Co. 52 SENTENCE-COMPLETION QUESTION An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. The most likely effect of the appropriate adjustments would be to increase that companys: A. Return on assets. B. Debt-to-equity ratio. C. Interest coverage ratio. CFA Institute
  • 53. Level I - Introduction 息R. G. Quintero & Co. 53 QUESTION WITH 3 DISTRACTORS An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. Which of the following is most likely to increase as a result of the appropriate adjustments being made to that companys financial statements? A. Return on assets. B. Debt-to-equity ratio. C. Interest coverage ratio. CFA Institute
  • 54. Level I - Introduction 息R. G. Quintero & Co. 54 2-COLUMN QUESTION An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. The most likely effect of the appropriate adjustments on the companys return on assets (ROA) and debt-to-equity ratio, respectively, would be: Debt-to-equity ROA Ratio A. Increase Increase B. Increase Decrease C. Decrease Increase CFA Institute
  • 55. Level I - Introduction 息R. G. Quintero & Co. 55 2-COLUMN QUESTION: ALT. FORMAT An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. What is the most likely affect of the appropriate adjustments on the companys: Return on Debt-to-equity Assets Ratio A. Increase Increase B. Increase Decrease C. Decrease Increase CFA Institute
  • 56. Level I - Introduction 息R. G. Quintero & Co. 56 2-COLUMN QUESTION: ALT. FORMAT An analyst suspects that a particular companys U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. Will the appropriate adjustments most likely increase the companys: Return on Debt-to-equity Assets? Ratio? A. No No B. No Yes C. Yes No CFA Institute
  • 57. Level I - Introduction 息R. G. Quintero & Co. 57 OBSERVATIONS ABOUT STEMS Exam doesnt use EXCEPT, TRUE, or FALSE in item stems, and avoids use of NOT Common stem wording qualifiers Most likely, least likely, best described, most appropriate, most accurate, least appropriate, least accurate Each stem supports only 1 item
  • 58. Level I - Introduction 息R. G. Quintero & Co. 58 ABOUT DISTRACTORS Narrative distractors typically listed from shortest to longest Numerical distractors ordered from smallest to largest number Agree grammatically with the stem Language common to all distractors is placed in stem
  • 59. Level I - Introduction 息R. G. Quintero & Co. 59 DISTRACTORS NOT USED All of the above None of the above A and B only (or other variations) Cannot determine Cannot calculate Not enough information to determine
  • 60. Level I - Introduction 息R. G. Quintero & Co. 60 HOW THE EXAM IS GRADED Exams are machine graded Periodic tests to verify accuracy 8 scanning stations w. 2 persons/station 7 days Graded 119,446 tests in 6/12 Visual inspection of forms Manual review of blanks & doublemarks Exam is graded on the curve
  • 61. Level I - Introduction 息R. G. Quintero & Co. 61 HOW WELL DO I HAVE TO DO? Ave. Level I score 1963 2005 45%* June 2005 Level I Exam Average 53%* Ave. of top 27% 62%** Ave. of bottom 27% 44%** Min. passing score 57%** 137 right answers out of 240 *Based on data disclosed by CFAI **Based on statistical inference by RGQ&Co. of CFAI data
  • 62. Level I - Introduction 息R. G. Quintero & Co. 62 EXAM-TAKING TECHNIQUES Make sure that candidate ID is correctly entered Listen carefully to, and follow, proctors instructionsavoid conduct violations Peruse Examconfirm 120 questions in AM; 120 in PM Attack questions Sequentially, or Start with best subjects to build confidence and momentum Keep close track of time 1遜 minutes/question Dont obsess over any question Be careful to answer question in appropriate oval Make sure that erasures are complete
  • 63. Level I - Introduction 息R. G. Quintero & Co. 63 EXAM-TAKING TECHNIQUES, cont. Avoid making extraneous marks on answer sheet Read questions carefully Read all alternative answers Choose best answer Because you know Process of elimination Guess (no penalty for wrong answers) Numerical answer may be closest (but not precise) result
  • 64. Level I - Introduction 息R. G. Quintero & Co. 64 EXAM-TAKING TECHNIQUES, cont. Come back to difficult questions after all have been answered Consider readings being tested when answering questions Always answer based on the CFA Program Curriculum, even if you believe it is wrong Look for shortcuts You may not have to fully solve question to eliminate all wrong answers Ignore patterns in answers Numerical answers listed from smallest to largest Word answers listed in order of sentence length
  • 65. Level I - Introduction 息R. G. Quintero & Co. 65 EXAM-TAKING TECHNIQUES, cont. Remain Calm Confident Answer all questions Use all time permitteddont leave early
  • 66. Level I - Introduction 息R. G. Quintero & Co. 66 BEWARE OF TRAPS Accurate statements that dont match question Distracters Irrelevant terminology Data unnecessary to compute answer Numerical answers that dont precisely agree with any of the alternatives Questions with double negatives Exam ambiguities and errors
  • 67. Level I - Introduction FEES AND REGISTRATION DEADLINES FOR JUNE 2015 EXAM 2/18/15 3/18/15 Program enrollment $450 $450 Exam registration $825 $1,210 Total $1,275 $1,660 Note: Curriculum is provided in e-book format to all candidates. Candidates may obtain printed books for $150. 息R. G. Quintero & Co. 67
  • 68. Level I - Introduction OTHER KEY DATES June 2015 Exam Requests for disability accommodation; religious alternative dates 3/24/15 Test center change requests 4/20/15 Admission tickets available online May 2015 Exam date 6/6/15 Results available July 2015 息R. G. Quintero & Co. 68
  • 69. 息R. G. Quintero & Co. 69 YOU MUST KEEP THE FOLLOWING ON TOP OF YOUR DESK Examination admission ticket Valid passport with photo See guidelines on CFA Institute Website Name must agree with admission ticket Approved calculator(s) HP 12C (including 12C Platinum, 12C Platinum 25th or 30th Anniversary edition, and 12C Prestige) TI BAII Plus (including BAII Plus Professional) Writing instruments Pencils for Levels I and II (#2 or HB) Pens and pencils for Level III Level I - Introduction
  • 70. 息R. G. Quintero & Co. 70 YOU MAY KEEP THE FOLLOWING ON YOUR DESK Erasers Calculator case, keystroke cards, batteries (W/O packaging) & screwdriver Manual pencil sharpener (no knives) Eyeglasses (no case) Earplugs Wristwatch (no audible alarm or timer) Level I - Introduction
  • 71. 息R. G. Quintero & Co. 71 YOU MAY KEEP THE FOLLOWING IN POCKETS OR UNDER CHAIR Wallet Eyeglasses case Earplugs Medicine, tissues, and other medically necessary or personal items Gum, hard candy, cough drops Keys Level I - Introduction
  • 72. 息R. G. Quintero & Co. 72 ITEMS PROHIBITED IN TESTING ROOM Food or drinks Bags or carrying cases of any kind (backpacks, handbags, briefcases, transparent bags, etc.) Study materials, notes, scratch papers, calculator manuals, etc. Highlighters, correction fluid, correction tape, or rulers Knives of any type Cellular telephones, cameras, pagers, computers, PDAs, or other communication or photographic devices Clock or watch with engaged audible alarms/timersLevel I - Introduction
  • 73. MISCONDUCT RULES Violations can result in Dismissal from test center Other penalties, including Voiding of exam results Suspension or termination of candidacy 696 exam conduct cases during F2011 Misconduct includes Creating a disturbance Giving or receiving help Opening, working on, or reading exam during unauthorized time Level I - Introduction 息R. G. Quintero & Co. 73
  • 74. MISCONDUCT RULES, cont. Misconduct includes, cont. Taking part in an act of impersonation or other forms of cheating Failing to follow proctors directions Using books, unapproved calculators, headsets, rulers, listening devices, pagers, cell phone, recording or photo devices, papers of any kind, study aids Writing on admission ticket Failing to follow CFA Institute conditions, requirements, policies, or procedures Level I - Introduction 息R. G. Quintero & Co. 74
  • 75. Level I - Introduction 息R. G. Quintero & Co. 75 ABOUT RON QUINTERO Ron has led and taught more than 300 CFA review programs over the past 20 years in North America, Europe, and Asia. These programs have included open-enrollment programs, as well as in-house programs for leading investment banks, commercial banks, international monetary institutions, financial services organizations, and educational institutions. Stamford classes are offered through RGQ&Co.; NYC classes through Sharp Seminars. Ron has also taught CFA review programs offered by NYSSA and FitchLearning, in addition to serving for a number of years as the director of CFA review programs of the New York Institute of Finance. Besides being a CFA charter holder, he is a CPA, CDBV, CFE, CFF, CFP, CIRA, CMA, CTP, and ABV. To attain these licenses, Ron passed more than 20 examinationsall on the first sitting. He shares the approaches that he has successfully applied with his students. Ron is an award-winning scholar, lecturer and writer, and a CFA practitioner with real-world experience. Before starting his firm in 1988, he was a member of the Investment Banking Department at Bear Stearns and the Management Consulting Department of KPMG.
  • 76. Level I - Introduction 息R. G. Quintero & Co. 76 FOLLOW-UP INFORMATION CFA Exam & R. G. Quintero & Co. CFA Review www.cfainstitute.org www.rgquintero.com Ronald G. Quintero, CPA, CFA, + 8 more (212) 327-0200 (201) 220-9181 mobile (212) 327-0225 FAX q@rgquintero.com rgquintero on Twitter Ron Quintero on LinkedIn