Full Form of CFA – Chartered Financial Analyst

CFA is a qualification provided by the CFA Institute, established in 1947. Over these 70+ years, the CFA program has emerged as the benchmark qualification for the investment industry.

Why Pursue CFA?

If one wants to decide on whether to choose CFA as a career option or not, following are the few factors that may help in coming to a sensible decision,

  • That certification is globally recognized, with over 167,000 professionals around the world. It is recognized in a minimum of 30 countries, which provides access to career options worldwide.It provides an edge for getting into the world’s biggest companies in the financial services sectors. Companies like JP Morgan Chase, Pricewaterhouse Coppers, HSBC, Ernst & Young, Morgan Stanly, and Bank of America are examples.CFA, when compared to an MBA program, is a more affordable program. CFA costs $ 3,000 to $ 5,000 based on what time you register and what study material you opt for, compared to $ 70,000 to $ 100,000 for an MBA.It provides in-depth knowledge in investment analysis, asset managementAsset ManagementAsset management is a method of managing funds and investing in both traditional and specialized products in order to generate returns consistent with the investor’s risk tolerance. read more, and ethics.It allows you to gain analytical skills and expertise in quantitative methods, economics, financial reportingFinancial ReportingFinancial reporting is a systematic process of recording and representing a company’s financial data. The reports reflect a firm’s financial health and performance in a given period. Management, investors, shareholders, financiers, government, and regulatory agencies rely on financial reports for decision-making.read more, investment analysisInvestment AnalysisInvestment analysis is the method adopted by analysts to evaluate the investment opportunities, profitability, and associated risks in their portfolios. In addition, it helps them to determine whether the investment is worth it or not.read more, and portfolio management. This set of skills and knowledge you will develop as you become a CFA charter holder will serve you well throughout your career.It provides various career options such as portfolio manager, risk manager, research analystResearch AnalystResearch analyst is a profession where the main task includes research on specific fields, analyzing the facts and figures, interpreting the analysis, and finally presenting the same to a structured audience that can relate to marketing, finance, operations.read more, and many other investment industry profiles.

Therefore, if your goals match the things offered by CFA Certification, it can be one of the courses to opt for. Also, it is good to know that the CFA charter is a highly selective process. Fewer than one in five candidates become a CFA charter holder.

You are free to use this image on you website, templates, etc., Please provide us with an attribution linkHow to Provide Attribution?Article Link to be HyperlinkedFor eg:Source: Full Form of CFA (wallstreetmojo.com)

Exam Levels and Format

CFA charter is a self-study program designed by the CFA Institute. To become a Chartered Financial Analyst and hold a CFA charter, one must clear three examination levels sequentially.

Exam Format: Multiple choice questions

The CFA Level I examCFA Level I ExamThe CFA exam is regarded as one of the most difficult to crack. Your preparation, time management, and sequence plays will all play an important role in your journey.read more consists of 240 multiple choice questions, split between two 3-hour sessions. Candidates must attend both sessions.

  • Morning session (3 hours): 120 MCQs, covering all topicsAfternoon session (3 hours): 120 MCQs, covering all topics

The topics covered on CFA Level I are,

  • Ethical and Professional StandardsQuantitative MethodsEconomicsFinancial Reporting and AnalysisCorporate FinancePortfolio Management and Wealth PlanningEquity InvestmentsEquity InvestmentsEquity investment is the amount pooled in by the investors in the shares of the companies listed on the stock exchange for trading. The shareholders make gain from such holdings in the form of returns or increase in stock value.read moreFixed IncomeDerivativesAlternative Investments

Exam dates: The level I examination is conducted twice a year, i.e., in June and December.

Passing rate: The pass rate for the June 2019 Level I CFA Program exam was 41%. 

Exam format: Multiple choice questions

The CFA level II exam consists of 120 MCQs divided into 20 sets of 6 questions each and are divided into two sessions.

The topics covered on CFA Level II are,

  • Ethical and Professional StandardsQuantitative MethodsEconomicsFinancial Reporting and AnalysisCorporate FinanceEquity InvestmentsFixed IncomeDerivativesAlternative InvestmentsPortfolio Management and Wealth Planning

Exam dates: The level II examination is conducted annually, i.e., in June.

Passing rate: The pass rate for the June 2019 Level II CFA Program exam was 44%.

Exam format: Written Examination

The CFA level IIICFA Level IIIThe CFA level 3 exam is the CFA Institute’s final examination. The first two levels cover fundamental financial knowledge, investment valuation comprehension, and applications, while the third level examines portfolio management and wealth planning.read more is a written examination, which differs from levels I and II. The questions are more like case studies.

The topics covered on CFA Level III are,

  • Ethical and Professional StandardsEconomicsEquity InvestmentsFixed IncomeFixed IncomeFixed Income refers to those investments that pay fixed interests and dividends to the investors until maturity. Government and corporate bonds are examples of fixed income investments.read moreDerivativesAlternative InvestmentsAlternative InvestmentsAlternative investments refer to investments made in assets classified as non-traditional investment vehicles.read morePortfolio Management and Wealth Planning

Exam dates: The level III examination is conducted once a year, i.e., in June.

Passing rate: The pass rate for the June 2019 Level III CFA Program exam was 56%.

After passing all three levels of examination, if an individual wishes to apply for the CFA charter, he must comply with the institute’s work experience norms. This norm states that the person must have professional work experience in the relevant field for four years (48 months).

Eligibility

To be eligible for the examination, one must have a bachelor’s (or equivalent) degree or be in the final year of a bachelor’s degree at the time of registration. Also, he is required to hold a valid international passport.

To hold the CFA charter and the above condition, one must pass all levels of the CFA examination and have a professional work experience of 4 years (48 months). After this, one can apply for CFA membership.

Examination Fees

One-time registration fees are USD 450Early registration fees for all levels are USD 700Standard registration fees for all levels are USD 1,000Late registration fees for all levels are USD 1,450

How to Enroll for CFA Exams?

To register for CFA exams, one can visit the official website of the CFA Institute. The link for registration is https://www.cfainstitute.org/en/programs/cfa/register

Salary

Chartered Financial analyst is a globally recognized qualification in finance. Newly qualified Chartered Financial Analysts can have an average salary of Rs. 5 lacs to Rs. 10 Lacs per annum in India and experience in the field eventual hike.

This has been a guide to Full Form of CFA & its definition. Here we learn the exam format, fee structure, & eligibility criteria of CFA, with its enrollment.. You may refer to the following articles to learn more about finance –

  • CFA SalaryCFA vs ACCA