Getting the CFA charter while teaching finance

Getting a CFA charter can set you apart from other finance professionals and give you options within and outside the university. If you teach finance, there’s a good chance that you could pass the first of the three CFA exams with only a few days of studying. In fact, I passed level I in December 2008 after exactly one week of preparation (level II and III are a different story).

Each exam lasts 6 hours, split into a morning and an afternoon session. All exams cover the following areas:

  1. Ethics
  2. Quantitative methods (e.g., time value of money)
  3. Economics
  4. Financial reporting and analysis
  5. Corporate finance
  6. Equity investments
  7. Fixed income
  8. Derivatives
  9. Alternative investments
  10. Portfolio management

Since I had taught corporate finance, investments and financial engineering in the past and hold a Ph.D. in economics, I focused mainly on financial reporting in my preparation. To pass, you need to get a minimum percentage of questions right (used to be 70%). In the end, I got less than 70% in ethics and economics, but enough overall to pass the exam.

CFA exam test takers

One piece of advice: study the ethics component very well, as it’s easy to lose points there, while it’s also the only study area where the material stays the same throughout all three exams. Spending time on ethics is thus a great investment.

While the exam fees are high (about $1,000 per exam), you can probably get a scholarship from CFA Institute if you teach at least 6 credit hours per term (details), which reduces your fees to about $350 per exam.

If you have questions about the exam, add a comment or send me an email.

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