CFA Books vs. Prep Material – I was RIGHT

Question

This post is an offspring of another that was started by @tacheman

Basically, the question was: Can you pass the CFA exams using only Schwesser materials and completely ignore the CFA books?

The short answer is: I'm sure you can. I'm also sure that eating Bhut Jolokia  would not literally kill me, but I'm not about to volunteer to do it.

Among the points I made in the longer answer was:

"Reading summary materials can be very dangerous, particularly preparing for a multiple choice exam. As I'm sure you know, answering multiple choice questions often involves eliminating one or two wrong answers (I am so old that when I wrote Levels 1 & 2, there were actually 4 possible answers per question, not 3) and getting to the right answer by process of elimination. This is where the importance of reading the CFA books really kicks in, because for many questions one or two of the possible answer (the wrong ones) are going to be terms that appeared in the curriculum and appears to be irrelevant. In fact, they were so irrelevant that the prep providers deemed them unworthy of even mentioning in their summary materials. These are important terms or topics on their own, and your certainly not going to become an expert in them. In fact, chances are that you won't remember anything about them - anything, that is except for the fact that they are irrelevant in the context of the question staring you in the face and can therefore be eliminated as a possible answer."

Well, I can now provide you with a specific example of this. In the Reading 38 of the Level 3 CFA books, section 2.2 covers LOS 38d. Shortly after,  section 3.1 addresses LOS 38e. In between, there is section 2.3, which covers Structured Notes such as "leveraged floaters" and "inverse floaters". Neither LOS 38d, nor LOS 38e, nor any of the other LOSs from any readings touch on the subject of Structured Notes.

Am I expecting to have to answer a question on Structured Notes on June 1st? No. But, do I believe that "inverse floater" could be one of the possible answers to a multiple choice question? Yes. But Marc, I'll just read about it in the Schwesser books. No you will NOT. I don't know about the Level 1 or 2 books, but the term "inverse floater" definitely does not appear in the Level 3 Schwesser books.

I'm not saying that it is impossible to pass without reading the CFA books, but I wouldn't make ignoring them a point of pride.

Ladies and gentlemen of the jury, I rest my case.

Sarah · Answer

I feel like I need to be the devil's advocate and side with prep material.

From a pure strategic perspective our goal is to pass and learning can take a back seat especially if it means losing even more weekends.

CFAI material:
Pros: It has everything you need to know for the exam.
Cons: It is a nightmare to read. It is long, it is boring and it goes on forever! Individuals tend to have trouble focusing on dry and boring material.  Yes we have a passion for finance but that doesn't mean the information has to be delivered in the most painful way possible.

Prep material:
Pros: It is far more accessible and dare I say it - engaging.  I am always amused when Schweser stops to explain why they rearranged the LOS's or have a note with what candidates struggle with or the readings gets easier and we've covered the more difficult material for the chapter. 
Cons: They don't cover everything.

Let's talk Schweser books since you mentioned Schweser. As a prep provider they do not guarantee that every single detail is covered in their books.  Their aim is to give you a general understanding of what is in the curriculum and highlight what candidates struggle with, common mistakes and how to avoid them.  Work through key examples and ensure you have a good understanding of the material.  Their job is to ensure you pass and not that you necessarily learn everything covered by CFAI.  Because lets be honest to pass you need a 70% (and even lower by 300 hours analysis).  If Schweser covers 85% of the material well, does a mediocre job with 10% of the material and dismisses 5% of the material.  If you are diligent and have a good understanding of the material, you'll pass.

Yes you could take a chance with the CFAI books but if that slows you down (because it does take longer to read) and only know 50% of the material well - I'd say passing is chancy.

P.S I think you picked a bad example. I'm pretty sure you could deduce what a inverse floater is with an educated guess.

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On a side note, I agree with you the CFAI material shouldn't be ignored but on a very basic level prep material is more accommodating of human nature. Actually my reasoning has been stolen from ancient Chinese literature. It goes something like this, "For military operations it is essential to strive to win the hearts of heroes, to make the rules of rewards and punishments strict, to include both cultural and martial arts, and to combine both hard and soft techniques.  Enjoy social amenities and music; familiarize yourself with poetry and prose. Put humanity and justice before wit and bravery".

policedog · Answer

@Marc off topic, but I remember reading somewhere that someone did die of eating too much spice!