Sam is our first CFA exam blogger. He was born and raised in Illinois, currently working in New York. He failed Level 1 in June but will retake in December.
OK. It is time for me to face Econ after my humiliating score in the Level 1 exam.
I once made fun of a colleague who “failed” FRA (<50%) as an accounting major. Lesson learned: don’t laugh at people and make a fool of yourself.
Anyway, I’ve put that aside and have started my proper studying this week.
Studying CFA Economics Level 1 (for Econ Majors)
Econ majors — learn from my mistakes and don’t skip this section! It is heavily tested, and chances are that you don’t remember enough details to get through the questions.
The good thing for Econ majors is that:
- You do not dread Economics like other candidates do
- If you graduate from a decent school, you understand all the topics covered in Level 1. Typically a quick brush-up is enough.
I personally chose to go through the concepts by watching videos. If you have a good set of videos (like Wiley’s) and that you have enough prep time, it’s a relaxing way to study.
After each session, imagine yourself to be a teacher and try to explain the concept on a whiteboard — yes, it is best if you can write it out, draw some graphs and explain out loud.
Then, go straight to the CFAI “blue box”, “end-of-chapter” and “topic area” test.
Rinse and repeat for the next session.
Studying CFA Econ (for Non-Econ Majors)
One major issue of people bombing Econ is that, well, they simply have no interest in this topic. It is especially the case in CFA level 1 when it has the least bang for the buck, meaning lots of reading materials but comparatively questions to appear on the exam day.
In any case, it is still 10% of Level 1. I wouldn’t risk ignoring this section.
Another reason is how some people may try to memorize a formula or graph or terms without understanding the underlying concept.
In Economics, the concepts build up, so make sure you are very okay with the basic concepts. You can do that by watching Wiley videos (or freebies in Youtube). Once you master the basic level, work on a few questions before you move on to the next level. As long as you follow the chapters and complete all the EOC questions, you will be fine.
In terms of study plan, I suggest the following:
- Watch videos
- Pause and reconstruct what was just explained in video. It could be a curve or intersect in a graph, or some sort of reasoning. The more simple logical associations you can make in your learning, the easier econ becomes
- Work on the practice questions especially those from the CFAI text book.
The method is basically the same as the Econ majors, but you may need to spend more time on steps #1 and #2.
This is what exactly I did this past week. My performance (and my confidence) is much better now.
Hope that helps!
Note from Stephanie
Hi Sam, glad you finally face the Econ section. We’ve got to pull the sting and let it heal, right? I am glad the foundation you have as Econ major stays — seems like things just get rusty, not forgotten.
Looks like you have all the patches done and are ready to go over the topics in the 50-70% 🙂
For other readers, you may check out my page on CFA Econ study tips which reflect a lot of what Sam discussed here.