Came across a couple of topics that can be helpful for Level 3. Not sure if you’ve read it already. Will just repost it.
Tackling Essay Questions – http://www.analystforum.com/forums/cfa-forums/cfa-level-iii-forum/91314266
How to Pass Level 3 – http://www.analystforum.com/forums/cfa-forums/cfa-level-iii-forum/91314226
Here’s my take on essay questions – many of his points we’ve covered before in the 10 commandments for Level III, but I’ll add to what he has.
The biggest problem I have with the essay paper is that we keep calling it the essay paper. It’s not essays you’re required to write. “Constructed responses” is indeed the official term, basically means free-form answers. Points can vary from 1-2 points to 15 points etc, and yes they total 180 for that paper.
Location, location, location
Write your responses in the right place. There is always a right place, and as trimonious explained, it isn’t always obvious. There are some questions where they even ask you to fill out a table, then SHOW you a half completed table, and yet that isn’t the right table to fill in, but instead a table at the back of the booklet. Know where to write your answers – super important.
Mock and Practice Exams
It’s true that generally none of the practice exams use the exact same format. It’s a crappy format that doesn’t make much sense paper-wise. But I remember reading a guide in Schweser Secret Sauce – a section that outlines how the exam day experience is like, and spends quite a lot of pages on the essay section. It’s at the end of the book. I don’t think it’s worth going into too much trouble to simulate exact exam conditions.
Read the F***ing Question
This is always true 🙂 Because answers may take a long time to write (more on that later below), make sure you’re answering exactly what they ask for. They will not hesitate to ignore anything that isn’t related to what they asked for, regardless of how correct, knowledgable or insightful you sound.
Writing the F***ing Answer
Write short sentences. Write in bullet form. Again, I cannot stress this enough – they will not hesitate to mark a big, fat 0 next to a Nobel-prize-winning essay if it’s not relevant to the actual question. Try not to ‘spray-and-pray’, i.e. write a whole boatload of stuff and hope something in there is what they want. You’ll lose valuable time, and rarely it pays off.
What do the essays test
I agree whole-heartedly with trimonious here. I’ve seen quite a few Level IIIs go by, and they seriously can just test ANYTHING in the essay paper. I’m not just talking about topics, but weightage. It’s not something a candidate fed up with studying wants to hear, but unfortunately this really is the truth. The best preparation is to make sure for the last week, go through the entire syllabus the best you can.
Show your work. Partial credit, as trimonious says, will be awarded, mostly for calculation questions (if it’s a concept-based question though, generally you won’t get any partial credit). If it’s one of those questions that requires calculator tapping (i.e. TVM, bond pricing etc) as trimonious recommends, just write down all values that you’re calculating i.e. “FV = -10,000, N = 144, I/R = 10” etc. But write something.
I have a bit more insight into this – entire committees and teams grade just one question. Do not assume any continuity of thought of the examiner between one question to the next (although the questions may and will require continuity of answers, i.e. question 3c may depend on question 3b’s answer). Do not be afraid to repeat info, even if you sound like an idiot reading all your answers together. Again, answer what they asked for.
Manage your time
It’s a good idea to structure the length of your answer to the amount of time/points they award – after all, makes no sense to compose an epic tome for a 2-3 point question. Timekeeping is important, make sure you know what the pro-rata allocated time is. Running over a bit is OK (e.g. if you’re slow in calculation), but consistently running over is definitely NOT. It’s also a good idea to view the whole question and its require answers first before reading the ‘story’ – unlike item sets, you don’t get 6 questions per vignette. Sometimes you can have a really long introductory text for just a few measly points, and on the other hand if it’s a vignette for a ton of questions you might want to spend more time understanding it.
I didn’t find IPS questions terribly difficult really – they were the more enjoyable parts of Level III to my recollection. If you have any specific questions on IPS just start another discussion and I’ll answer 🙂
Model answers aren’t necessarily always the only answers. But sometimes they are, especially if it’s short answers, or (obviously) calculation answers. If you don’t know the answer to a straightforward question (e.g. “What is shortfall risk?”) resist the temptation to ramble. Which leads to the next section…
There will be some questions which will completely stump you – where you will think to yourself “I have zero clue what they’re on about”. If you don’t know the answer, do not ramble. The examiner will not take pity and award you partial credit. Zero. Nada. If you don’t know, give it your best shot and move on. I know it’s very tempting to write a bit more in case it has something that will count as partial credit, but mostly you’ll be wasting time. Live to fight another question.
Just a few important points to say here: 1. don’t worry about bad handwriting, but don’t intentionally write terribly to try and seem that you know the right answers when you don’t. 2. Yes, you can use a pen, but I don’t think you should. Why write in something unerasable? 3. Yes, do try and write small. The answer templates aren’t really that spacious.
The prep books, CFA syllabus and website all cover this. This is part of reading the question. They are pretty straightforward, and if you have a good understanding of English there’s no need to go memorizing what each command word means exactly. However, they can be found here for your reference.
If you’re used to writing essay responses to questions you shouldn’t have an issue writing short sentence answers to the questions. The challenge I see in the essay paper would be to know the answers, because the range of what is available to ask is just massive. trimonious’ suggestion of trying to explain CFA concepts to your loved ones etc is an interesting one. I don’t think it’ll help you answer better, but generally my rule of thumb is this – if you can’t explain a concept simply to someone, you haven’t understood it fully yet.
Hope this helps!
Haha, my turn to comment on How to Pass Level 3 then… This person’s experience mirrored mine as he/she got thrown off the morning session’s essay format too.
Differences between L2 and L3
We agree on the same points here. In terms of sheer content L2 is more overwhelming, but L3 balances that with an essay format in the morning exam.
The test itself is the invisible study session
For L3, you need to know your stuff and write brief, straight-to-the-point answers for the morning session. Fluff scores you no extra points but takes more time. KEEP IT SIMPLE.
Ok, I wouldn’t say start earlier per se because there is no end to that part. I would say give yourself enough study time of 6 months (with full time job). Why? Any earlier you won’t retain the info and burn out (there’s only that many times of GIPS you can read before you get paranoid), any later you will still burn out and panic because there’s quite a load to cover. Follow your study schedule and aim to finish the syllabus 1.5 months before to try practice exams. The difference for the essay bit is the practice exams will put off because it seems ‘easy’, or you mark yourself ‘lightly’. Make sure you make summary notes on weak sections to remember the salient points of each concept to be able to describe briefly in the essay part. After the practice sessions it’s usually prudent to go through your materials again to reinforce your memory.
Well, you knew from my experience that I bombed the morning session (and tried to salvage it, detailed here, so I won’t repeat that. I do nag about time management since Level 1 but it’s ever so important for Level 3 too. Given the varying length and amount of questions in the essay session, the first thing I’d advice candidates to do is to count the number of question, and find out the time allocation per question and STICK TO IT. If time’s up, SHOOT AND GO (whereby shoot here means just write something down, your best answer, and come back to it when you have more time later).
Answering ‘essay questions’
It’s simple. DON’T write essay answers. Keep it short, brief and to-the-point.
Same line of thoughts here, show your workings (they do get points, e.g. if your formulae is right but you made a mistake in numbers), but again keep it short, brief and to-the-point for answers in the essay section.
Cross Pollination of Topics
There is more mixture of topics and cross application of what you’ve learnt so far in all levels. So that’s a given, no big deal. It shouldn’t rattle nor concern you too much. It’s the same like item set, it’s just that you have to explain/create your answers instead of choosing for a set of choices.
I’ve mentioned this in the ‘start earlier’ section above. It’s hard to know how to grade yourself against a model answer, hence you will tend to be more lenient, or not know how strict it is marked against in the CFA exams. It’s ok and normal to experience this, and the only remedy I see is to allow yourself some time to go back to revise sections of your material again after practice exams. Everyone finds the essay part harder, so you’re on an even playing field in that sense. Improve your odds by time management and material grasp.
I personally think this is analysing the CFA exams too much. Just answer what the question asks, not what you want the question to ask, and keep to the time and you will be fine.
Know this well. The technique I used is making summary notes / flash cards, paste it all over my flat (especially against the wall in the loo, I thought it deserved that treatment for the pain it was causing me). You will remember it for life, I kid you not. 😛
IPS is not that difficult as it seems. I don’t think its useful to spend time speculating what is a ‘base IPS’ case. I suggest to follow the ‘format’ below as base to your succinct answers.
The IPS comprises of 2 objectives: risk and return, and five constraints: time horizon, liquidity, taxes, legal & regulatory, and unique circumstances. I will focus on risk and return as the constraints are relatively straightforward:
a) For return objective type questions, the answer format should be along the lines of:
To earn a total [pre/post]-tax [nominal/real] return of [?]% covering [expense 1, 2, 3 etc].
where expense(s) are the items you need to factor in the return objectives of the specific scenario. Show your calculation too if you’re asked to calculate.
b) Return is inevitably related to risk. Here the assessment of risk tolerance depends on the ability and willingness to take risk. Willingness can be found in the (subjective, backward looking) statements of the vignette, the ability to take risk relies on your objective (forward looking) assessment of the situation.
You must explain your answer on willingness vs. ability of taking risk, then make a conclusion of the lower of the two. I.e. Overall Risk tolerance = Min(Ability to take risk, Willingness to take risk)
Personally I don’t think the specific topic weights matter if you plan to cover the whole syllabus. All you need to know is that it is portfolio management focused compared to L2. You should know your topics well since there are invariably interlinked in the questions and there is no point trying to guess what will be out and allocate your studying efforts more on one or the other.
Calculate, Evaluate, the stuff for which you want your calculator
I’d say when you needed to calculate something to answer a question, show your steps anyway since you are doing it to get the answer. 2 things to check before you do this: the point allocated to that, and whether the following questions asks explicitly to show your calculation. Those 2 aspects would give you a good idea on whether you need to show your workings.
Overall – start the essay exam by fixing a time allocation per question before you start. Stick to it, write succinct answers. These steps should improve your odds of acing the essay part. Even if you make a blunder like me and got behind time management, don’t give up and continue to blaze through covering as many questions as you can, and have laser focus to ace the afternoon paper to tip things back in your favour. I did not finish my essay section (few sections blank!), and still managed to scrape through. At the risk of sounding ultra cheesy (I’ll say it anyway) – If I can do it, so can you! :-bd
@AjFinance I was thinking of posts that you find explains a CFA question/concept very clearly in an understandable way. Thought it may be useful to curate such good resources here so that people can refer to? With the ‘bookmark’ system of the forum I find it easier to highlight things instead of good stuff getting lost in the midst of the AF forum – what a waste.
@Reena sure. Just tell me which are the concepts that you find difficult and also for which level. I usually search on google, so it gets me the best results from both AF and Wall Street Oasis. You can start a discussion on the forum regarding ambiguous concepts, and if I come across something good in the meantime, I’ll post it.
All the different points above are really useful. I also keep looking for various topics online and also like to have a conversation with some professionals as they can really help in boosting our confident.
I recently had a conversation with a professional he suggested me some points which I would like to share with you all too.
1. Make sure you know your basics well, L3 assumes that you r well aware of your L1 and L2 syllabi
2. Keep your common sense with you. Most of the L3 curriculum is Portfolo Management, and most of that can simply be attributed to simple, plain common sense.
3. Solve papers to get practice of writing answers. While most people felt that the paper wasn’t too tough, it was indeed a challenge for them to complete it.
4. Brevity is key. You need not know the book from cover to cover. Learn to grasp the main pts, make sure you solve atleast the multiple choice qs behind.
5. Read stories of successful person or individuals who have already cleared it as this will help you build your confidence.
I will suggest some of my recently read stories for all below:
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