Why CFA Level I candidates get afraid of FRA

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tahir saeed

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I don’t understand why candidates of CFA Level I are afraid of FRA. I have been reading since the joining of this forum that FRA is very difficult and can give tough time to many. In fact, Its very interesting and easy as compared to quantitaive section. If you read Scheweser Notes of FRA, you will find easy way out to proceed your study plan and you enjoy while reading.
I found FRA one of the easy among all. Perhaps, I have little bit background of accounts and finance, as I have done MBA (Finance) and MS (Finance) already.
 
Wait until taking FRA topic test or Mock exam. There are many tricky questions always with incorrect answer simulation. Mostly you are asked to answer on USGAAP basis when one of the answers would be correct but upon IFRS and vice versa. I have been working as FS auditor and prepare FS internal and statutory reports even on monthly basis and still have hard study FRA to meet all concepts. Quants session is not as difficult as it looks like when you start. With practicing you may reach even 90 % success on CFA tests. Economy is even much more difficult than Quants in my opinion.
 
OK “FlashBack”, but i have also been trying Scheweser notes end of the chapter test and have been achieving more than 85% correct answers. Till now I have completed more than 50% of Scheweser study sessions and got on average 85% of success in EOC test.
 
I was going to attempt level 1 in Dec 2014 but literally only because of FRA I did not sign up. I had never been exposed to accounts and the 20% weightage seemed overwhelming. Along with this the worst thing I did was to approach a Chartered Accountant to introduce me to accounts.
I studied FRA from both curriculum and schweser and found it very interesting. It is’nt really difficult, its just that there are numerous new terms, methods, technicalities etc for a person with non-accounts background. I agree with flashback, mostly the wrong answers in FRA are not random numbers instead they are legit answers that can be arrived at using different methods.
I gave a whole month to FRA and it has paid off. I scored 90%+ in EOC and 85%+ in topic tests.
 
tahir saeed wrote:
I don’t understand why candidates of CFA Level I are afraid of FRA. I have been reading since the joining of this forum that FRA is very difficult and can give tough time to many. In fact, Its very interesting and easy as compared to quantitaive section. If you read Scheweser Notes of FRA, you will find easy way out to proceed your study plan and you enjoy while reading.
I found FRA one of the easy among all. Perhaps, I have little bit background of accounts and finance, as I have done MBA (Finance) and MS (Finance) already.
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I’m really not trying to be negative on this site becuase i have recieved unbelievable amounts of help/guidance but seriously you sound ridiculous from this post alone. I couldn’t be happier for you that you have a great understanding of this topic, and i truly hope you pass b/c i know how much effort people including you put into this but .. why post it?? do you feel better about yourself?
 
Unlike many other topocs (e.g., Quant, Portfolio Management, Fixed Income, Derivatives), you can’t simply learn a few basic principles and be able to derive the remainder. You have to memorize a lot of material, with no strong underlying theory to tie it together.
As an example, under US GAAP, interest expense is a nonoperating expense on the income statement, but interest paid is an operating cash (out)flow.
 
S2000magician wrote:
As an example, under US GAAP, interest expense is a nonoperating expense on the income statement, but interest paid is an operating cash (out)flow.
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..and under IFRS interest received may be either invest either operating cash flow while interest paid may be operating or financing CF.
 
S2000magician wrote:
As an example, under US GAAP, interest expense is a nonoperating expense on the income statement, but interest paid is an operating cash (out)flow.
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How do you remember this L1 stuff - do you teach it? Or this is similar to your work?
are you a CPA…………….
 
S2000magician wrote:
As an example, under US GAAP, interest expense is a nonoperating expense on the income statement, but interest paid is an operating cash (out)flow.
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is this true for both lease interest expense and bond interest expense…. any kind of interest expense at all?
 
^^never mind, I sorted it out. The answer is yes, except for the IFRS case that flashback mentioned.
 
Whats ridiculous in it..??? I shared something that I don’t perceive and I believe perhaps FRA is one of my strong area in my perspective. I posted it just to pile up the experiences of people because since joining of this group, I have been reading that FRA is very difficult and require more effort and vigor. Therefore, I wanted that let people share and disclose what’s difficult on it.
I appreciate some of the guys except you who shared their experiences and differentiated how actual exam screw up the guys. Its not the matter of feeling better or best. I simply believe I am not the best but atleast good in FRA.
 
S2000magician wrote:
I teach it all the time.
I’m not a CPA, though I do have a degree in accounting.
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Cool yeah I took it and passed and forgot it. I really struggle with accounting as some rules are not intuitive, but require memorization.
FRA was the toughest for me. I think it was called something different when I took it though. FSA … Financial Statement Analysis.
 
I completed some Schweser practice problems last year in preparation for Level II and found them to be extremely easy. Make sure you take some CFAI practice exams and get over 85% on those as well.
I could have passed the Schweser version of the test when I was in high school, but the CFAI practice tests were much more difficult.
 
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