CFA exam is one of the toughest exams, yet many candidates sit for the test with a dream of a financial career. Since CFA paves the way for many career options in finance, the curriculum is designed extensively to include important financial topics. The clearance of the CFA exam will ensure that the candidate is well-versed in different financial subjects and well-equipped to use financial tools. However, considering the extensive curriculum and the diverse topics many CFA exam level 1 prep course providers are available to help the candidates with the study material and preparation.
These course providers ensure that you are well prepared with the updated syllabus. From CFA level 1 economics to Alternative Investment, every topic is explained with lectures, study materials, and animated videos. Every candidate has their own set of struggles to deal with throughout the curriculum, so here are some tips for the ones who find economics tricky.
Candidates have different perspectives on Economics for the CFA exam. Some find it easy to score, whereas some keep struggling through the topics of Economics. Let’s first have a look at the weightage of Economics in the three levels of CFA exams. In level 1 this section consists of 10% weightage, in level 2 the weightage is around 5-10% and in level 3 it is around 5-15%. Although, it is not a subject with very high weightage but is very important.
As far as the level 1 examination is concerned, candidates face 24 questions from Economics against 300 pages of curriculum. And so it is found that many candidates who are professionals skip the detailed preparation for Economics as it seems infeasible for them. However, it is believed that with a little smartness and some effective reading, one can score high in Economics.
It is a fact that CFA preparation requires around 3000 hours. Now, this can be monotonous and difficult to complete the curriculum and more so when a subject like Economics appears which has low weightage but more reading.
Economics curriculum for CFA
The Economics curriculum for CFA is divided into microeconomics and macroeconomics. Microeconomics is the study of the market behaviour of consumers and firms based on the demand and supply principle. The curriculum includes an introduction to demand and supply analysis, consumer demand, demand and supply from a firm’s perspective, and different market structures. Macroeconomics deals with bigger perspectives and includes interest rate determination, inflation, bond/yield relationship, money supply, and interest rate relationship. The reading is focused on business cycles, monetary and fiscal policy, aggregate output, prices and economic growth.
In addition to the micro and macroeconomics topics, the level 1 curriculum of economics also focuses on Economics in a global context which explains the flow of goods and services in the global scenario. The reading includes internal trade and capital flows and currency exchange rates.
Tips on how to ace the Economics preparation
The economics preparation is time-consuming with not much to offer in marks. Since economics is all about concepts and definitions, once the concepts are clear it is an easy sail. So, what is important is to study strategically by prioritising the important topics and giving more time to the difficult ones. In short, spare some time to get the concepts perspicuous to find the questions attainable.
Economics is not a bunch of formulas, so memorising is not the key to its preparations. So, it is essential to understand the logic behind the concepts to have a strong hold over economics. One way to get clarity of the concepts is to understand the social behaviours as economics provides systematic answers to these behaviours.
Studying the graphs can be helpful as these give a pictorial understanding of the concepts. Although graphs are not part of the exam, however, they help in understanding the concepts better.
Alternatively, you can also take help from the video lesson to clarify the concepts as videos tend to be engrossing and better sources for studying. The videos explain concepts with multiple graphs and visual descriptions that help in self-study.
Once the self-study is completed, it is better to engross in practice paper solving. Target to complete as many practice papers as possible to be able to access your preparation.
Managing your economics preparation with these tips can help ace the economics curriculum. In addition, it is recommended to get enrolled on a CFA exam level 1 prep course for proper guidance and access to study materials and engrossing video lessons. Clearing the CFA exams is not everyone’s cup of tea, and so one needs to deal with it tactfully. Strategically planning hours for study, minimizing distractions, focussing on practising problems, and utilizing every free hour for preparation, are the essential ways to make effective preparation.
The preparation for CFA requires complete dedication and focus to be able to clear the levels. Whether it is CFA level 1 economics or any other subject the key is to prepare well, revise better, practice problems, and sincerely conduct the test. Economics may trouble you but getting yourself into a course can be highly beneficial. So what are you waiting for? Gear up and start preparing now.