Last Minute Study Advice for CFA Level 3 Candidates - Some Quick CFA Level III Exam Tips & Pointers

16 Aug 24

How to Master the Constructed Responses and Pass CFA® Level 3 Exam with Chalk & Board

Hey CFA Level III (“Level 3”) candidates! Nathan Ronen, CFA here with a crucial update as you prepare for the August 2024 exam. We’re coming close to exam day, and by now you’re probably focused on the infamous Level 3 essay section, formally known as the constructed responses. This section can be daunting, but with the right approach, you can tackle it successfully. I want to share some expert strategies to help you master this part of the exam and pass with flying colors.

Positive Thinking: The Foundation of Success

First things first—let’s talk mindset. As we move into the final stretch of preparation for the CFA Level III exam, it’s normal to feel anxious or doubt your readiness. However, it’s essential to maintain positive thinking. If you’re plagued by thoughts of failing, that’s a mindset you need to shed immediately. Dwelling on failure, whether it’s poor mock exam scores or other anxieties, won’t do you any favors on exam day. Instead, focus on what you can control: your Level 3 preparation and your strategy. Remember, you’ve made it this far, and you’re equipped with the knowledge you need to pass. Now, let’s refine your approach to the constructed responses and ensure that you succeed on your Level 3 exam, so you don’t have to deal with the revamped CFA Level III curriculum in 2025.

The Key to Success: Stop Just Reading, Start Writing

If you’re still spending the bulk of your time reading and re-reading the curriculum, it’s time to shift gears. At this stage, reading alone won’t get you across the finish line. To ace the Level 3 constructed responses, you need to practice writing them out under exam conditions. Here’s why: the CFA Level 3 exam isn’t just testing your knowledge; it’s testing your ability to communicate that knowledge effectively in a structured and concise manner. This is where many CFA Level III candidates struggle. But don’t worry, with the right guidance and enough practice, you can overcome this challenge.

Stick to Your Answer: The Importance of Commitment

Let’s discuss a common mistake candidates make on the essay portion of the exam: overthinking and second-guessing their answers. For example, if you’re asked to choose between portfolios A, B, or C and then justify your choice, it’s crucial that you commit to your answer. Select the portfolio you believe is correct and stick with it. Your justification should focus entirely on why your chosen portfolio is the best option based on the information provided.

Here’s a critical tip: Don’t waste time explaining why the other portfolios are wrong. Many CFA candidates think that by showing why A and B are incorrect, they’re reinforcing why C is the best choice. Unfortunately, this approach doesn’t cut it. Graders are specifically looking for reasons why your chosen portfolio is correct, not why the others are incorrect. Justifying your selection based on what makes it the best fit is what will earn you the points. Failing to do this could result in a zero for the justification, even if you selected the right portfolio.

Avoid Vague Explanations: Precision Is Key

Another common pitfall is providing vague or overly simplistic explanations when the exam asks you to identify and briefly explain key concepts. For instance, when asked to identify four qualities of a good benchmark, you might be tempted to define “investable” as “something you can invest in” or “measurable” as “something you can measure.” While these statements are technically true, they won’t earn you full credit. You need to go a step further and demonstrate your understanding of these concepts with clear, specific explanations.

Let’s break it down:

  • Investable: Explain that it means the securities within the index are liquid enough to be bought and sold by an investor. It’s not just that you can invest in them, but that they are accessible and tradeable in the market.
  • Measurable: Indicate that this means you can calculate the index’s performance over a given time period and use it as a benchmark to compare your portfolio’s returns.
  • Specified in Advance: Clarify that this refers to the need for the benchmark to be established before the start of the evaluation period, ensuring that it’s an objective standard against which performance can be measured.

Using precise language and avoiding the use of the term you’re defining within the explanation will show the graders that you truly understand the material. This approach will maximize your chances of scoring full points on these types of questions.

Tailored Preparation with Chalk & Board

Now, if you’re still feeling uneasy about your CFA essay-writing skills, or if you want to ensure that you’re fully prepared for the CFA constructed response section, I highly recommend checking out Chalk & Board’s tailored resources:

  1. Mock Essay Exams: Participate in live or self-paced mock essay exams. These exams are designed to simulate the actual CFA Level 3 experience and come with detailed grading and feedback. Understanding where you’re losing points and why is crucial for improving your performance on the real exam.
  2. Study Videos: Enroll in our concise online video courses, you even can use them as a last-minute “crash course” if your exam is approaching and you feel under prepared. Unlike some providers who offer hundreds of hours of video, our courses are highly focused and efficient, getting straight to the point. These courses include 50 embedded essays that demonstrate how to apply the content you’ve learned directly to exam questions. By practicing with these essays, you’ll gain confidence in your ability to handle the constructed response section.
  3. Personalized Feedback: Whether you take our mock exams live or on your own time, I personally grade each one and provide feedback. This feedback is invaluable—it highlights exactly where you’re making mistakes and shows you how to correct them, so you can walk into the exam room with the confidence that you’re fully prepared.

Ready to Conquer the CFA Level III Exam?

If you’re determined to pass in Level 3 and leave the CFA Level III exam behind for good, now is the time to take action. Visit Chalk & Board to explore our mock exams, crash courses, and other resources designed to help you succeed. If you have any questions, feel free to contact me directly through the website—I’m here to help you every step of the way.

Let’s make your upcoming CFA exam attempt the last time you ever have to think about the Level 3 exam. You’ve got this!