Level II:

Took sample exam on CAIA site. Got 67% on morning and 60% on afternoon. Not feeling great about it but thankful that I have enough time to prepare.

With an (FO) IB background, i think the marginal benefit to your employability from any exams will be dramatically reduced, your experience will count for much more. If you are minded to do something though, imo do CFA. CAIA is still a baby in terms of recognition afaik. There are certainly positions for which knowledge of the material will serve you better than the CFA, i.e. any buyside position in alternatives, but your IB background will be much more of a swing factor than a qualification that still has a lot of work to do in terms of gaining recognition. Disc: i have done completed CFA programme, and have only a limited knowledge of the CAIA.

How is progress coming for you guys? I'm really struggling through level 2 (low 60s on Schweser practice tests). 70 is still the target for level 2 right?

Thoughts on the best ways to pick up 2-3 points a week from here to the test? I cant decide on trying to go over everything again or just focusing on nailing down a single concept every day where I will definitely get a question on that right.

Also, it seems like the format of level 2 leaves some room to cram between sessions. Is it reasonable to think I could pick out a topic or two that were underweight in the morning and pick up a few points by reviewing that material between sessions (I generally finish early and would be shocked if I didnt finish before the 2.5 hr mark, but wont be rushing to get there or anything)?

I was in your situation about a month ago (see last post by me in this thread).

The last two practice exams I've done (out of 6) I got 73% on both. I'm still not confident in my ability to pass (rather, have <10% chance of failing).

I found doing lots of practice problems helping. After doing enough I found 2 - 3 areas in which I was really lacking (Private Equity which should be easy to learn, MBS + ABS, and swap calculations).

Will be working on those and hopefully feel confident by June.

And afaik they won't fail anybody above 70% (maybe if you're really lacking in ethics???) and have a slightly lower bar for passing people (this varies by year). So nothing different from L1.

yea, thats what I assume about passing score too, but why the **** wont they come out and say that? If I need a 65% to pass I feel pretty good, 70% not so much. I feel great about ethics though as it is by far my best section despite spending the least amount of time on it. I'm focusing on the two big sections by repeatedly doing Equity and FRA problems every night.

tasty, how many hours did you put in for that 10 percentage point improvement?

not dead yet!

As for hours... probably 30 - 45?

I did 5 practice exams in that time while examining all the answers (whether or not I got them right or wrong) and did some reading and more practice problems.

Hopefully only a year away from having Friday nights in May again!!!

edit: to remove the waffle hehe

I am looking to learn investment appraisal techniques using Excel.

I have found this book on Amazon: http://www.amazon.co.uk/gp/product/0...SIN=0789743175

Does anyone have recommendations of a better book?

Many thanks if you could post,

John

Not as sure about my chances to pass, but do feel like I'm learning more studying L2 and overall material feels more useful. Even when going over stuff I didn't know L1 just felt sorta basic at times.

really dumb question: if you calculate a justified P/E, P/B, P/S or whatever and it comes in LOWER than the market P/E, P/B, or P/S then the company is UNDERvalued right? I dont even know why I am asking this, but I have gotten it "wrong" on a couple straight tests and Schweser is saying this would mean the company is OVERvalued on every online question and in their explanation of the LOS.

Its also kinda making me paranoid that I have been teaching myself incorrect information on some stuff I am less certain about. I would almost rather just have this simple concept flipped than start worrying about what else they got wrong.

schweser has it right. it's pretty simple.

company earns $1 per share. you determine that a fair p/e is 10. that's a price of $10 per share.

if the market price is $15 per share the p/e is 15... hence it's overvalued.

While I agree with that it certainly isn't intuitive since low valuations are associated with something being undervalued like 90+% of the time. The phrasing of "market" is confusing in this case. How exactly is the question asked?

The market is what the market it is currently priced at.

what stinkypete said

if you think each dollar of EPS is only worth $10 in stock price and the market thinks it's worth $15 then you should believe that the security is overvalued.

Most of the time when you're "buying low" you're actually buying at the low P/E the market has assigned and assign a higher P/E yourself b/c of reason x y z.

this is what I was looking for. I was interpretting the word "market" to mean the "market P/E" for the industry not the P/E the firm is being traded at. That is why I thought that when I got a justified P/E of 6 and the market was trading at a P/E of 10 I was thinking "this is cheap compared to the market, gotta buy" when in fact the 10 is where the stock itself is trading.

Super helpful and super intuitive. I had the concept down but was a lock to miss any question on this on the test because of the wording.

There is a good chance you 3 just got me one of the 84 questions I need to get right. Thanks for the help.

Yeah I mean I prefer to think of it as multiple contraction and multiple expansion, which would cause the stock price to decline and increase, respectively.

My point above was that "market" is also synonymous with the S&P 500, so a natural inclination is to think current valuation of stock vs. current valuation of S&P 500. And if you assume everything should have the price multiple of the market (which is obv a terrible assumption) then you'd think the stock is undervalued. I'm just saying this is how a naive person would think about it.

Edit - I see you just wrote everything I am saying

yea. it confused me because of the plethora of questions that ask you to assume that "market" or "industry" data points are the benchmark for individual stocks. I also hate the fact that a lot of questions I am doing dont seem to be as clearly directed to the piece in the vignette that it applies to and at times I have to spend a decent chunk of time just figuring out which quote they are asking about.

Level II:

I re-took the morning part of the sample exam provided by CFAI and got 82%. Pretty happy with that despite remembering some of the questions.

FWIW I found the last mock exam provided by Schweser to be pretty brutal. On 4 and 5 I got ~73% but on the last one I think I ended up with ~67%. I thought I didn't progress after finding out I got so many wrong.

Would be pretty mad if I didn't pass this since I've already done
7x practice exams + 0.5x retake = 900 problems
~500 from Qbank
A good number of EOC problems from CFAI and Schweser

Textbook CFA L2 Swaps Question I don't understand:

There is always a question on "When is the risk in swap's life greatest?" and I always answer "Middle" which I believe is correct. Problem is I don't know why it's correct.

I understand why it's not beginning (no change in rates/values). I don't understand why it's greater at the middle when compared to the end. I understand there is no principal being swapped but I don't understand why the risk isn't the same as the middle or even riskier. Does this relate to present value or something else?

Thanks

sorry for what must be a redundancy of noob questions:

best level 1 study materials? Stalla, Schweser?
approx time studied for exam 1?
anything else?

I think Schweser acquired Stalla.

Time depends. 200 - 300 probably

At the end there are fewer payments left, so less risk. In the middle you have more payments left, hence more risk

After reading your answer it's like doh. Thanks for the response.

By this logic the beginning of the swap would have the most risk because thats when there are the most payments left.

No.

The risk is small at the beginning of the swap because the parties would not engage in the swap if the credit risk were significant at the start.
The risk is low at the end of the life of the swap because of the small number of remaining payments.


http://www.analystnotes.com/notes/lo...il.php?id=2403