Focus on the CFA (Chartered Financial Analyst)

The CFA (Chartered Financial Analyst) is the most important degree in finance. It is certainly the most recognized and asked for certification by companies. Divided into 3 levels, the CFA is considered to be one of the most difficult degrees to obtain. Through this article, we will try to present you the CFA, its usefulness and its functioning. 

Read more: What is the AMF certification and how to obtain it?

The CFA: a certification in 3 levels to validate

The CFA is divided into 3 levels (CFA I, CFA II, CFA III). Level 1 is often requested in interviews for first jobs. The following levels are more advanced and are required later in one's career. 

CFA level I: an intensive first level 

CFA level I can be taken at two different times during the year (January and June) and is conducted in the form of 240 multiple-choice questions with 3 or 4 propositions per question for a single valid answer. Candidates have 4.5 hours to complete the entire exam and must obtain a minimum score of 70% correct answers to pass the test. Important note: a candidate who has obtained slightly less than 70% can still be certified if one has an excellent score in the financial ethics section. The pass rate for CFA level I is only 35%. 

CFA level II: the most selective one 

CFA levels II and III offer only one session per year, in June. With 120 questions to be solved in 4.5 hours, level II is presented in the form of fifteen or so case studies. Here too, a 70 is required, although this level is considered the most difficult of the three. It is estimated that 40% of candidates pass this test. 

Read more: The right resume to work in finance

CFA level III: a practical level 

The last level of the CFA takes the form of case studies (about ten) and 45 MCQ questions. For this last level too, a 70 is required. It focuses mainly on the objectives and constraints of different types of investors in order to build successful portfolios. 

Finally, you should know that while a 70 ensures validation of each level of the CFA, the score required to be certified varies from session to session, since it depends on the candidates' success and the difficulty of the subject. Therefore, you can obtain less than 70% and still be certified if the subject was difficult.

How much cost the CFA?

The price of the CFA varies considerably depending on the levels you wish to take and when you register. For example, a student who registers for the June session before October 17 will pay $650. He/she will pay $950 if he/she pays before February 13, and $1380 if he/she pays before March 13. Important note: the prices given are for the first level of the CFA: there are still two more to pass and validate!

Then, you have to count a certain price for the preparation to the CFA. Indeed, many candidates go through private preparation centers. It is estimated that passing the first level of the CFA requires 300 hours of preparation. However, it can be difficult to work alone for such a long period of time. Therefore, many candidates use training centers that cost several thousand levels. 

Read more: Corporate Finance or Market Finance?

What are the CFA level I tests?

The questions in the various CFA tests are divided into several topics that candidates must master. These parts are as follows:

• Financial Reporting and Analysis is the most important part, representing 20% of the questions and having the most important coefficient
• Ethical and Professional Standards accounts for 15% of the questions, with a strong focus on Standards of Professional Conduct
• Economics represents 10% of the questions
• The Equity section also accounts for 10% of the questions. This is a very theoretical section on which candidates can easily score points
• Fixed Income questions represent 10% of the total. This is a very calculating part, so it is necessary to do several exercises to master it
• Corporate Finance accounts for 7% of the questions
• Portfolio Management accounts for 7% of the questions. This is an analytical part in which you have to know how to interpret the curves
• Derivatives represents 5% of the questions
• Alternative Investments is the least present part with 4% of the questions

 CFA: a gateway to the world of finance 

The CFA is an American certification and is a reference diploma throughout the world. It is therefore a valid and recognized diploma in all countries of the world. It can even be required by employers when recruiting. Indeed, the CFA certification testifies to your skills in finance and especially to your motivation and work capacity. 

With areas such as asset management, portfolio management, quantitative analysis, trading, and investment advisory services, the CFA is a diploma that opens doors in all sectors of finance. 

Read more: Focus on the investment banking sector