CFA Level III’s essay paper (more formally known as Constructed Response section) tends to be many candidates’ Achilles heel. We’ve also recently published a guide to accurately grading your essay practice questions.
However, there is a quick way to substantially improve your essay paper performance. Understanding the format and knowing how to answer essay questions is almost as important as knowing the actual CFA content, and a lot of candidates don’t stop to think about this enough.
Knowing this, we’ve delved deeper, drawn from our experience as charterholders, consulted the experts and put together a guide to answering CFA Level III essay questions. Read on!
- Read the question before its case information. Typical essay questions include significant amounts of ‘case information’, which is needed to answer the accompanying question parts. It might be tempting to dive straight into the case information, but don’t. Focus your attention on the questions right at the start. After reading and understanding the questions, then move onto the case information. This should provide you with a better sense of purpose and focus now that you know what you’re looking for. Finally, reread the question again before answering concisely – for more tips on answering essay questions, see the next section.
- Read and underline. Read the question quickly but actively, underlining key words. Underlining key words helps because you’ll need to refer to the question a few times, flipping back and forth between the case information and the question itself. CFAI have made this easier by bolding key command words (e.g. calculate, describe, explain etc.) in their questions to provide a guide.
- Short answers – no essays. Although everyone calls it an ‘essay’ question, do NOT answer in essay form – you’re wasting time. Legible, concise, straight to the point answers are essential to keep within the exam time limit. No long sentences or paragraphs needed – bullet points are fine. Keep your answers understandable, but know that answers are also not graded for language, grammar or style.
- Show all the calculations and formulae you can. For calculation answers, always show as many steps and formula as you can. This helps you get partial credit in case you make a mistake somewhere in your calculations.
- Know when to guess and move on. If you’re not sure of the answer, write your best guess down (don’t leave anything blank as there are no negative marking), leave some space after that (just in case you’ve time to get back to this and have a better idea), and move on. Don’t dwell on it and waste precious time.
- Make sure you answer questions on the correct page or template. Each question should have specific directions on where to answer that question. Make sure you get that right. Answering questions on the wrong page or template will get you zero points.
- Use pen instead of pencil. Write your answers with a pen – pencils tend to smudge and may cause you to fail if graders can’t read what you’ve written. Writing in ink when practicing also trains you to think before you write – a very good skill for the CFA exam (and your future career!).
- Abbreviate. Well known abbreviations can be used, especially when they’ve been used in CFA curriculum, e.g. PV for present value, arrows to indicate up or down (↑ or ↓) in answers are fine.
- Know how much time you should spend. Each question part in the CFA exam has its recommended allocated time indicated. One minute is indicated is equivalent to one point in the exam. This indication provides a great guide on how long to spend on reading and answering.
- Move on when you have to. There is rarely extra time in the essay session. Mark the time you’ve to move on at the start of each question. Do what you can and skip to the next section or question once time is up.
- Rule of thumb: You should be spending more than half the time reading, thinking, and deciding, and you should be spending less than half the assigned time in actually writing out the answers. Think first, then write!
Pulling all of the above together, this is how we recommend to approach each CFA essay question:
- Read all the question parts in the whole case.
- Read the question’s case information.
- Read the specific question part you want to answer.
- Answer concisely in the right page and template.
- Move onto the next question part when finished. If the allocated time is up and you’re still not done, write what you can and move on.
Are you facing your CFA Level III this exam cycle? Remember that we have a free practice exam for you that you can take now. If you have a question, let us know in the comments below!