Open Side Menu Go to the Top
Register
***OFFICIAL CFA Exam Results Thread*** ***OFFICIAL CFA Exam Results Thread***

07-29-2008 , 04:26 PM
Quote:
Define beta - it's not a directly observable quantity. If the above was true, with very reasonable assumptions (that are false) you'd be able to make tons of money just optimizing portfolios. Thus saying something like that actually exposes your lack of understanding of CAPM - CAPM would be unbelievably useful if what you're saying was true and beta was observable.
Guilty as charged I suppose - I honestly have no idea what you're talking about. Very little idea anyway.

Phone Booth, what do you do? Whatever it is I certainly hope you are compensated in excess of $1M annually. If not I will assume you hate money. Which is fine - different strokes for different folks.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 04:32 PM
Quote:
Originally Posted by Yowserrrs
Since I think the arrogant ass of the day award is still up for grabs:

I think I could pass the entire CFA without studying, having never reviewed the direct prep materials, but of course having studed markets / valuation extensively for years.

Am I totally off on this? Anyone have a few really hard CFA questions they think could stump me? I promise not to cheat if I dont know.
Possible (assuming you study the ethics portion) but then again it's likely that there are simply large parts of the curriculum that you've never studied. A lot of random fixed income stuff, portfolio management, international accounting (cross-currency and all those headaches), and etc. Here's a sample question (I made this one up, but it's probably shown up in a real exam at some point almost exactly).

Given three securities: 1) a 30-year treasury bond with 5% coupon, 2) a 30-year mortgage bond with a 5% coupon and 3) a zero coupon bond maturing in 30 years, which ones have the highest duration and lowest convexity respectively?

A) 3, 2
B) 1, 2
C) 2, 3
D) 2, 1


There are no really hard CFA questions, much the same way there are no really hard SAT questions.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 04:39 PM
Quote:
Originally Posted by Yowserrrs
Since I think the arrogant ass of the day award is still up for grabs:

I think I could pass the entire CFA without studying, having never reviewed the direct prep materials, but of course having studed markets / valuation extensively for years.

Am I totally off on this? Anyone have a few really hard CFA questions they think could stump me? I promise not to cheat if I dont know.
Pretty sure CFA I has a lot of very specific code of ethics minutiae.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 04:43 PM
Quote:
Originally Posted by bills217
Guilty as charged I suppose - I honestly have no idea what you're talking about. Very little idea anyway.

Phone Booth, what do you do? Whatever it is I certainly hope you are compensated in excess of $1M annually. If not I will assume you hate money. Which is fine - different strokes for different folks.
I probably hate money but I'm hoping to hate money a little less in the future.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 04:47 PM
Quote:
Originally Posted by Yowserrrs
Since I think the arrogant ass of the day award is still up for grabs:

I think I could pass the entire CFA without studying, having never reviewed the direct prep materials, but of course having studed markets / valuation extensively for years.

Am I totally off on this? Anyone have a few really hard CFA questions they think could stump me? I promise not to cheat if I dont know.
Actually they posted online the essay portion of the one I took:

http://www.cfainstitute.org/cfaprog/...l_iii_exam.pdf
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 04:47 PM
Woo hoo I know the answer to that question. Certificate please.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 05:10 PM
Quote:
I'm sure he'd nail the parts relevant to his job (pretty much everything else except ethics and portfolio management) without much studying at all.
Are you sure about this?

Quote:
Our Graham & Dodd investors, needless to say, do not discuss beta, the capital asset pricing model or covariance in returns among securities. These are not subjects of any interest to them. In fact, most of them would have difficulty defining those terms.
-Warren Buffett, from "The Superinvestors of Graham-and-Doddsville"

Quote:
There's really no excuse for anyone who wants to manage large sums of other people's money not to know most of the material covered in the exam.
Pretty sure you just disqualified many of the greatest money managers in history from managing large sums of money.

You may have a valid rebuttal, and I'd love to hear it, but you will excuse me if I refrain from rebutting, as I am admittedly completely unable to debate about finance academia with you. That quote was the crux of my posts in this thread, however. On ignorance/laziness I am guilty as charged, but that doesn't mean I'm wrong.

Last edited by bills217; 07-29-2008 at 05:16 PM.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 05:26 PM
Quote:
Originally Posted by Yowserrrs
Since I think the arrogant ass of the day award is still up for grabs:

I think I could pass the entire CFA without studying, having never reviewed the direct prep materials, but of course having studed markets / valuation extensively for years.

Am I totally off on this? Anyone have a few really hard CFA questions they think could stump me? I promise not to cheat if I dont know.
I have several practice exams here at different levels of difficulty, 240 questions each. I might be able to upload one that resembles the exam if I can find a scanner. You want one?
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 05:31 PM
Didn't I read somewhere that Buffet has a photographic memory? He'd pass it with that alone.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 05:49 PM
Quote:
Originally Posted by bills217
Pretty sure you just disqualified many of the greatest money managers in history from managing large sums of money.
A lot of the things covered in CFA didn't exist or weren't relevant even as recently as 20 years ago. I'm sure they knew what was or would've been on the exam.

Quote:
Originally Posted by bills217
Are you sure about this?

Quote:
Our Graham & Dodd investors, needless to say, do not discuss beta, the capital asset pricing model or covariance in returns among securities. These are not subjects of any interest to them. In fact, most of them would have difficulty defining those terms.
-Warren Buffett, from "The Superinvestors of Graham-and-Doddsville"
The quote is a give-away that he knows what these things are. Knowing Buffett, do you really think he's taking someone else's word for it that these things are useless, or he knows what they are and knows that they are useless?
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 05:54 PM
Quote:
The quote is a give-away that he knows what these things are. Knowing Buffett, do you really think he's taking someone else's word for it that these things are useless, or he knows what they are and knows that they are useless?
I am sure Buffett knows what they are and has a cursory understanding of them, although not nearly as good as the average Finance ph.D.

But what about those to whom he was referring? Walter Schloss, for example, did not attend college. Anyone who can even remotely replicate what he has done would be uber-wealthy and mildly famous.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 06:01 PM
Quote:
Originally Posted by bills217
But what about those to whom he was referring? Walter Schloss, for example, did not attend college.
According to the interwebs, Walter Schloss has the CFA designation.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 06:26 PM
Quote:
Originally Posted by Phone Booth
According to the interwebs, Walter Schloss has the CFA designation.
So will I in 3 years, and I probably won't be able to tell you much more about CAPM then than I am now, which isn't much.

Just mentally delete everything I posted in this thread and replace it with, "I am lazy."

***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 06:53 PM
Quote:
Originally Posted by Phone Booth
In short, any criticism of the exam should start with the exam being too easy. There's really no excuse for anyone who wants to manage large sums of other people's money not to know most of the material covered in the exam. I find that most people who dismiss EMT/MPT/CAPM/etc as "academic" do so out of ignorance or inability to understand as opposed to deep understanding of their conceptual flaws. In any case, having the latter wouldn't pose any problems if you wanted to pass the exams.
this
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:00 PM
Quote:
Originally Posted by bills217
I was simply stating that the overwhelming majority of the CFA curriculum is irrelevant to managing an equity portfolio in real life. Modern Portfolio Theory, and no Kelly Criterion? Srsly?
can you expand on this? i would think that understanding the the concepts behind modern portfolio theorya is essential for managing an equity portfolio. if you don't understand how volatility and correlation relate to risk you have no hope of creating a portfolio that is anywhere near optimal. i'm not saying that simple mean-variance optimization is the way to go, but it would really surprise me if less than 95% of successful portfolio managers didn't have a fundamental understanding of these things.

why would the kelly criterion be more important than MPT concepts?
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:04 PM
Quote:
Originally Posted by bills217
You'd fail the ethics part which is an auto-fail for the whole thing. /hijack
the ethics part is actually pretty simple. if you pick up a few basic guidelines you can reason your way through it. there's some details you have to know but not a lot. if you go through like 50-100 stalla practice questions (im sure the other prep companies have similar stuff) and you're intelligent i'd be very surprised if you didn't get over 70% on the ethics part. that shouldn't take more than like 3 hours.

i think the biggest mistake you can make is to read the cfa material. there are far more efficient ways to learn.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:05 PM
Quote:
volatility and correlation relate to risk
How does volatility relate to risk if an investor with a long time horizon is not using margin or holding derivatives that utilize margin? I do not see any relation whatsoever.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:06 PM
Quote:
i think the biggest mistake you can make is to read the cfa material. there are far more efficient ways to learn.
agreed
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:07 PM
Quote:
Originally Posted by bills217
The quantitative section is also not trivial at all. I got <50% on that section one year removed from graduating with a chemical engineering degree and a math minor. Although maybe that's partly because I skipped studying for that because I assumed I'd be ok, etc.
chem eng/math aren't particularly useful. aside from some basic stats, there isn't much on there that requires more than high school math. but if you haven't had a decent amount of exposure to similar stuff you won't do well without at least a small amount of study.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:08 PM
Quote:
Originally Posted by The DaveR
Pretty sure CFA I has a lot of very specific code of ethics minutiae.
that's what everyone says, but from my experience (small sample size ldo), it's not like you need to learn a ton of detail to pass. i think it's more of an excuse that people who don't pass use.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:11 PM
Quote:
Originally Posted by bills217
How does volatility relate to risk if an investor with a long time horizon is not using margin or holding derivatives that utilize margin? I do not see any relation whatsoever.
good luck getting a portfolio management job if you only understand long time horizons.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:17 PM
Quote:
Originally Posted by stinkypete
good luck getting a portfolio management job if you only understand long time horizons.
The fact that I made the distinction should indicate I have at least a cursory understanding of it.

I don't want a "portfolio management job" working for anyone else, so I don't anticipate that being a problem. I appreciate your concern however.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:24 PM
CFA hung over minutiae? huh? what? I passed on first shot without ever studying a lick. The material was straight out of textbooks for any finance major. In fact, it could very easily be a combo final exam for a second year finance undergrad.

Ethics is such a small part of your score you probably could bogus your way through if you did well on the rest. That said, i also had 2 semesters of business law and that helped a lot.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:30 PM
Quote:
Ethics is such a small part of your score you probably could bogus your way through if you did well on the rest.
I have heard anecdotally, albeit from many many sources, that they auto-fail you if you fail ethics. A friend of mine had a finance professor that once failed the Level I due to failing Ethics.
***OFFICIAL CFA Exam Results Thread*** Quote
07-29-2008 , 07:35 PM
I just read through the thread... and you're wrong about the material not relevant to managing a portfolio. Yes, a lot of the exam centers around using a financial calculator that nobody uses but all the material and knowledge tested is considered a given.

You absolutely must know derivatives of all kinds. They are becoming more and more pervasive. If you don't understand what's out there right now, good luck trying to price something those f***ers at Lehman try to sell you.

If by portfolio management you mean positional trading, then guess what, no certification on the planet is useful for that.
***OFFICIAL CFA Exam Results Thread*** Quote

      
m