The CFA Quantitative Methods section is listed as the second topic, and can be a reality check for those feeling confident after covering the very qualitatively oriented Ethics and Professional Standards topic. However, the test questions for the Level 1 exam are not particularly complex. Candidates often do well on this topic by following a few basic tactics.
Using the Financial Calculator
First of all, you need to learn how to use the basic functions of a financial calculator. At least for the more seasoned crowd, the gold standard is the HP-12C. Make sure that you know the basic calculations like NPV and IRR, standard deviation, various return calculations and the time value of money. Consider using flash cards for the different formulas, and use acronyms to help you remember the required inputs.
Some questions might look intimidating due to the long questions with lots of numbers. Just take a deep breath, and break down what is being asked in the question. Look for the different variables required for the calculation, and you may also be asked to interpret the outcome.
Think About the CFA Level 1 Exam Holistically
Unlike the Level II, you actually won’t be constantly using your calculator. Therefore, think more holistically about this exam, and don’t spend a disproportionate amount of time on mastering every single formula.
It’s frequently cited that the CFA Level I exam is a mile wide and an inch deep; whereas, Level II is an inch wide and a mile deep. Keep that in mind if catch yourself drilling too deep in a narrow topic that’s unlikely to produce multiple test questions.
Stay positive and keep your eyes on the prize.