CFA Finance: all about the certification of a certified financial analyst

CFA certification is definitely there The most popular and recognized certificate in the world of finance. Many large companies (especially Anglo-Saxon) require this before hiring a candidate. We even go so far as to believe that the CFA (Certified Financial Analyst) isone of the most difficult steps to obtain, with a success rate of about 42%. The purpose of this article is to acquaint you with CFA, its functioning, usefulness and, first of all, to explain to you why it is important to pass if you want to work in finance!

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CFA: three-level diploma

CFA certification is actually required three exams and three levels (CFA I, CFA II, CFA III) must be fully confirmed. Level I is a more general goal students who want to start their careers in finance and who, therefore, must be trained in financial analysis and demonstrate their level for future business.

CFA I (CFA level I) this is the only level it offers two sessions a year (in January and June) and takes shape MCQ with 3 or 4 suggestions per question. The exam consists of 240 questions that candidates must answer in 4:30. It is necessary 70% correct answers for the exam, but a candidate who scores slightly less may be accepted if he or she has obtained an excellent financial ethics score. It is estimated that approximately 35% of candidates who take the exam, pass it.

CFA I valuation is based on the main financial instruments: quantitative methods (actuarial calculations and statistics), micro- and macroeconomics and analysis of financial statements by applying basic international standards. You also need to know the basics derived products (characteristics and organization of futures and options markets), as well as simple assets (stocks, bonds, etc.).

Then CFA II only offersone session per year, in June. The latter is performed in the formMCQ with 120 questionsdistributed under fifteen case studieswhich makes it possible to put the candidate in a situation, all in 4:30. As for the I level, score more than 70% of correct answers provides passing the exam, with a success rate of about 40%. It should be noted that CFA II is often considered the most difficult of the three.

Level II focuses on the valuation of structured and integrated assets. To obtain a CFA II certificate, you must mastertime series in statistics, transfer of financial statements in the context of mergers and acquisitions in financial analysis as well credit analysis, added and updated after the subprime loan crisis. Portfolio modeling and optimization strategies assets must also be known. Finally, an important part is always given to business ethics.

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Finally, CFA III differs from the first two levels in that it takes shapeabout ten essay questions and 45 MCQ questions. 70% of the correct answers, again, are a guarantee of success, and are considered to be slightly less than half of the candidates pass level III. Also, only one session per year is offered.

For its part, CFA III focuses on goals and limitations of different types of investors (individuals, pension funds, funds, insurance companies, banks, etc.) for the purpose create a consistent investment policy. It is also necessary to be at the point regarding the wording economic forecast on different pairs of assets. Finally, you need to know how to build, control and pbalance sheets grouping of different types of assets and derivative instruments.

Assessment required to confirm CFA levels calculated at each session, depending on the complexity of the subject, the approximate success of the candidates of your session. A set of more than 70% ensures a certificate, but it is not mandatory. Therefore, there is no “objective” assessment to be achieved, each session has its own specific score.

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How much is CFA?

There is no exact price for passing CFA certification sinceIn fact, the cost depends on the date of registration. Let’s take a specific example: a candidate who registers for the June session will pay $ 650 by October 17, $ 950 by February 13, then $ 1,380 by March 13. Registration is closed after this date. Each test represents a certain cost: that’s why you pay for each test separately, it’s not (until October 17) $ 650 for three certificates, but $ 650 for the first level!

Finally, it should be noted that many private organizations offer training and education for CFA tests. Indeed, it is estimated that CFA I requires an average of 300 hours of training, so many candidates resort to private organizations that cost several thousand euros (by level).

Description of tests

MCQ and CFA test questions are available divided into different topics candidates are expected to master. Let’s see what these parts are:

  • in Financial reporting and analysis is the most significant part of representing 20% issues and has the highest ratio. Keep in mind that 70% of the questions in this section are explained in the first half of the Curriculum Review (CFA Review) sections: Parts 1-7 (out of 14) contain 70% of the answers to this first topic.
  • Part Ethical and professional standards presented 15% questions, knowing that most will focus on the Standards of Professional Conduct
  • The economy accounts for 10% question. Most of the answers are contained in the first four chapters of the review book.
  • Part Equity also presented at 10% question. This is the part for which it is easiest to win a lot of points, because it is very theoretical and contains only six sections, easy to understand
  • Fixed profit present at 10%. In order to fully understand and preserve this part, we recommend doing and repeating many exercises
  • corporate finance present at 7%. In this part, first of all, the topic of working capital management is in great demand.
  • Portfolio management contains 7% question. To score the maximum number of points in this part, you must first know how to interpret the curves and be able to analyze them.
  • derivatives presented 5% question
  • Alternative investments is the least represented part only 4% question

CFA certification: the gateway to the world of finance

The CFA is an exam of American descent today recognized worldwide and which is a real gateway and a testament to your financial skills. This will be required of you, especially if you want to work in areas such as asset management, investment banks or even investment advisory companies.

The advantage of the CFA is that it is known and recognized worldwide and provides a real guarantee of excellence and skills in the world of finance. He represents the real distinction between CFA candidatesand those who do not have it and are not going to take it.

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