How important is FRA to Level 2?

I’m finding FRA a bit of a challenge too. Not because it’s difficult to digest, but rather because it’s too much information!

@tim it is when you think about it. All your trying to do is work out how much you will owe at a future date, what its present value is, and how this changes under different assumptions. One you know this you then just need to compare it to the assets the fund owns to see where you currently stand.

There aren’t that many formulas to learn for it.

In the Schweser videos, Andy Holmes gives you 3 bits of advice that he considers crucial to passing the exam:

1. Focus on FRA
2. Time management (e.g. reading questions before vignette as suggested by @christine and @sophie)
3. Practice, practice, practice

And from the analysis that 300 Hours put together, it seemed to me that doing well on FRA, Equity, Corporate Finance, and Derivatives will increase your chances of passing level II.

@vincentt what do you do specifically? Any expertise in web design? 🙂

@fabian FRA and Equity Investments are relatively two of the most important topics for the Level 2 exam. Try and allocate more time to both these topics and I guess you should be fine. :-bd

Consider going back to the basics of the topic and for additional help refer to curriculum. All the best

Do you work in finance @vincentt? Or studied finance-related courses?

Awesome – might ask for some tips later on 😀

@zee sure! do you maintain the backend of this forum?

@vincentt I do my best. 🙂

@zee just shout if u need any help 🙂

Statically you have 33.33% chance of getting the right answer… i feel its not late yet… Put in the effort

You *will* need to be decent at FRA. It’s so much of Level II, and many of the concepts you learn in FRA can and will be mixed together with other questions. Don’t trash it.

FRA is pretty important not just to pass the CFA exams but I reckon that I’d make a terrible analyst if I didn’t understand financial statements.

I agree with @MattJuniper pension accounting is just understanding the underlying assumptions and dealings with a couple of formulas. Remember GAAP allows for two different discount rates when IFRS only allows for one.

@zee i used to be a web developer (never good at designing more towards the backend side of it)

It’s quite important I’m afraid… 15-25% in Level 2 (vs. 20% of Level 1). You only get rid of it in Level 3 where the emphasis shifts to portfolio mgmt.

It is hard though I agree, but its just craploads of practice and application of formulae…

I found that whilst there is a lot to learn on FRA at L2, actually the questions that are likely to come up are pretty obvious and therefore it wasn’t too difficult to get under my belt. For example, there will likely be a question on pensions. This may look difficult, but if you me,prise the simple formula (such as funded status) it’s a quick win.

The topic is very important though given its significant weighting…exclude it at your peril!

FRA is super important. But I don’t find it the easiest of subjects. @Mattjuniper – I’m envious you found pension accounting easy!

In my opinion, I don’t find FRA too hard, at least I think it’s way lesser to cover compared to level ‘s FRA. For example, Study Session 5 is entirely Level 1 stuff (if you did well in level 1 you should be fine, probably just read through to refresh).

Study Session 7: Majority of it are pretty much existing stuff (at least from my point of view).

As for Study Session 6: this is where most of the new stuff are and where I tend to focus more on.

@Sophie i don’t work in finance, planning to move into. I’m currently a software developer.

Fair enough @dkotwani – are you taking Level 2 too?