Formulas for CFA Exams

Question

Is there a hard and fast rule, or even just a rule of thumb, for which formulas are "fair game" on the exam? I must say that I find CFAI to be very fair, but this is an area where they could provide a bit more guidance.

I have a few thoughts of my own:

1) I supposed that the default position is that anything in the curriculum could show up on the exam. This is the "better safe than sorry" approach.

2) Notwithstanding point 1, there are times when the author goes off into silly derivations that are essentially the mathematical equivalent of a run-on sentence and I feel pretty safe in ignoring these.

3) If a formula is used in a blue-box, I usually take that to be a hint that they recommend that you learn it.

4) I used to think that any formula with a blue-boxed number beside it was fair game and formulas without such notation could be ignored. But now I think that this is simply used when the author wants to reference an equation later in the reading.

Everything written above is purely speculation on my part, so if anyone can provide me with enlightenment on this subject it would be sincerely appreciated.

christine · Answer

My take on it is that they definitely have 'important' formulas and concepts that will be tested - the more fundamental and the more time spent on it in the curriculum the more likely.

HOWEVER, there is always a certain percentage of the exam where literally anything mentioned in the curriculum is fair game. In my view CFA Institute could extract any random concept from the darkest corner of the curriculum text and surface it in the exam.

The best way to know which formulas will be key is to practice the hell out of exams. The more important formulas, you'll meet time and again.