AuthorTopic: 2006 June Level I Questions
@2006-06-04 16:26:38
For those who'd use this site in future:

I'm giving you some ideas about the questions that actually came in June 2006 level 1 exam.

- In ethics area several questions were asked regarding confidentiality and legal / professional conduct investigation.
- Priority of transaction where relatives are client.
- Significant weight on GIPS as well as Corporate Governance (es. audit committee and compensation committee)
- relation between arithmentic mean-geometric mean; Std deviation-absolute mean difference.
- relation between r an R^2
- Combining both sessions I believe at least 4 questions were on Cash Conversion Cycle - How it changes with inc/dec in different "period ratios" and "turnover" ratios.
- Understandably a lot of questions on P/E Ratio, ROE components and g
- The concept of "Convexity" was tested thoroughly.
- different option strategies and their comparison
- margin call on futures.
- Alternative investment: focus was on ETF and real estate.
- Portfolio Mgt: The concept of Portfolio St. dev. with regards to indivual asset st dev. within portfolio.

In General:

Concept is the key. Though there were a handful of questions that required some detailed calculations most questions were concept base.

I believe more than half of the questions had two columns of answers (that is they wre 2-in-1 questions).

Hope these tips would be helpful for future users.
@2006-06-04 16:09:19
The exam is finally over. Can you post on what part of the preparation worked and what did not.

List of items that worked for me:

1. Time spent on Textbook chapter end questions was worth in gold. The question on futures balance, annuity, eps were forklifted from the chapterend. Many others were closely adapted from there. If I pass, this is the differentiator.

2. AnalystNotes Mock exams. Herfindahl index, Chebychev inequality are examples. hmm.. looks like CFAI uses mosaic to form questions.

3. Prioritizing on the top 50 or so items in the run-up to the final week was a good move. My list was dot on the mark: time weighted return, herfindahl, chebychev, diluted eps, ddm, monetary policy graphs, sml questions. Despite making the list, did not master it all and lost some points here and there.

4. In the first mock exam here, I could not sit thru the 3 hours. In the final exam, breezed thru the 6 hours. Heavy jogging and exercising to improve fitness, endurance and concentration in the final weeks helped.

List of items that did not work for me:

1. Ethics - morning session - should have prepared using flash cards. missed some easy points. damn.

2. I should have revised between the morning and afternoon session. There was a question on short-term borrowing in the morning session whether it is related to Cash Flow from Financing (CFF) or Cash Flow from Operations (CFO). I hesitated and marked it as CFF, making a mental note to check it after the exam. After the morning session, went with the conventional idea of not reading anything and keeping the mind fresh. The same question appeared (slightly differently) in the afternoon session and I was left with the same dilemma; this time I marked it as CFO hoping to get one of the two correct. Nasty.
@2006-06-04 21:36:24
i took all the CFAI smaples before the december exam and I found them to be totally useless. nothing like what's in the test. total fake. AnalystNotes mock exams were totally worth it for me. Their questions are usually too long and can't be done in 2-3 minutes, let alone one, but they are much closer to the real test.
@2006-06-05 01:11:12
Hi, everybody.

June exam is over and I wanted to share my view on it. I'm not going to release any details but rather share my experience. Please do not hit me hard for this. Everything expressed below is just my opinion.

Part I. Overall Exam.

Exam organization:
Exam was well organized (at least in my location) and I think it helped a lot. I was not nervous at all. Make sure you have only "things" allowed by CFAI and you are not going to get in trouble. I had 2 calculators, pencils, sharpener and earplugs. Just bring them in without any bag or even a zip-lock. Earplugs were not necessary at all as well as pencil sharpener. I used about 10 pencils for both parts. Unfortunately, CFAI does not show the format of the answer sheet. If I saw it before I think it would be easier for me to adjust to the process. But my conclusion is that regular pencil is much better than mechanical to fill in the answers. My pencils were too sharp so I even had to intentionally dull them a little.

Exam perception:
You may hear people saying that second part is easier, especially due to the fact that you do not have so much stress. May be it happened because I was not nervous, but I found second part harder than the first. Questions were harder for me plus I was already tired. I talked to some people after the exam. Even though few of them had different opinion, majority agreed that the first part was easier. If I had to compare the complexity of the exam to the tests that I took I would rank then from most to least complex:

1. AnalystNotes mock exam 4 (I had low 60's on it)
2. Part II of the real exam
3. AnalystNotes mock exam 6 (I had mid 70's to low 80's) and Part I of the real exam
4. Schweser book 1 mock exam.
5. CFAI sample exam which I purchased for $50 (I got 83 on it)

Real exam is much more analytical and less calculations than AnalystNotes. My calculator power went on auto-save a couple of times because I did not use it. Nothing crazy like pooled variance or 3-asset portfolio stdev. Be ready to a lot of qualitative analytical questions. I did not see a single question in the first part that I did not understand at all and may be only 2 or 3 in the second part. Also logical chains in the second part were much longer. If part I was something like: "If A goes up what will happen to B and C" then part II was something like: "If company uses A and B how the change in X is going to affect Y and Z in comparison to the company which is using C and D"? Also I was more confident selecting the answer on part I than on part II. This does not mean that I selected the right answer. I was just more confident identifying which answer I'm going to pick versus fighting between 2 or sometimes 3 different choices in part II. Timing was sufficient. I have an average speed and I did not have enough time to do an AnalystNotes mock exam in 3 hours. I usually marked 3 to 5 answers randomly on mock exam 6 and 10 to 12 on mock exam 4 to stay whithin 3 hours. On real exam I had about 10 minutes left after finishing both parts. I think this is due to the shorter questions and less calculations.

Some people who passed exam before suggested that they were absolutely confident that they failed. My feelings are not that tragic. It is still a long waiting but I feel about 50/50 on this. I guessed a lot, but I hope it was not that bad.

I was going to publish more detailed opinion on each section (without specific questions obviously) but I'm not sure if this is helpful to other people. Exams do change from year to year, but if somebody is interested reply to this message and I will post part II later.

Good luck everybody.
Enjoy your study free life.
@2006-06-05 02:36:19
i couldnt agree more with your opinions.....

The exam was much more non-calculative than i had expected. I can almost count on my fingers how many times i had to use the calculator, so that should speak for itself.

Ethics on both parts were quite straight forward, with the exception of a few curveballs (eg; soliciting clients, but also being personal friends with them, etc etc).....

Economics was relatively straight forward, but NOT easy.

Quant was surprisingly straight forward and not many calculations....

FSA was where i got screwed as i am generally weak in accounting to begin with. There were times when i was looking at the question and seriously wondering what i had gotten myself into. I recall questions that would not only test 2 but 3-4 concepts in one question. Alot of double negatives threw me off.

PM was more difficult than i had expected. Guess on many.

Overall, the exam was fairly tough, but not outrageously tough. If i failed, its because i didnt study hard enough, not because the CFAI is out to get us. The 2nd half of the exam was much tougher for me personally, but not because the questions were necessarily harder, but mostly from fatigue and mental strain from the morning session. There were questions that seemed relentless and difficult to grasp, but its most likely on concepts you already know, but cant tie the knots together because of being burnt out after the 5th hour of testing. Overall, guessed on alot, wouldnt be surprised if i FAILED. I would be extremely surprised (and pleasantly) if i miraculously passed, but i doubt this is the case.

The wording on this test was TOUGH. For those who think that people in China/India with no english background and can count on their quantitative skills to pass this exam will be in for a surprise. The girl sitting beside me was from China, and i guess she felt so devasated after the first paper she decided not to show up for the second paper. Someone told me the wording was more difficult than December, but thats their opinions...
@2006-06-05 05:06:49
Ya, this test is tricky, no doubt, but it test how well you know the material. If you cram in the last month you will probibly not pass. If you put in the effort, even 250 hours or less depending on your background and know your stuff reasonable well I think you have a good shot at passing. The questions are not long, but they ask questions in different ways and there are twists so you have to turn a concept or two for a question on it's side or backward to answer it.

I remember when I finished the first exam I was warped back into reality, literally, when the invistigator said to put down your pencils, I knew I was in a deep state of concentration. IMO learning the material in the conventional sense is not good enough. I.e. a major difference between this exam and the Canadian Securities Institute exam is the CSI's exam test that you have learnt it, but you have to know how to apply the concept liberally to different type of questions. You also have to be smart enough to figure out the curveballs that they give you. Having said that the curveballs are not deadly, but you need to work through them.
@2006-06-05 06:31:34

I am very happy to read u all: I really thought the exam was easy but tricky even if I didn't have enought time and U guy confirm it.

U didn't have to use to much your calculators and more of the tricks were in the questions in one section. Never thought it was possible to come up with such questions.

I would advice people to start finish with the FSA whatever ur strength in accounting because that where u lost all your motivation and sometimes do not understand the question or the answer.

Regarding Analystnotes, I can say that this website really help me out above all the notes which help me to focus the last and bring everything together.

I hope I pass I will let u know guys if everything went ok.
@2006-06-05 13:44:17
Unfortunately, I probably didn't pass the exam (probability of 0.015 that I passed). The Stalla program that I had been preparing with was completely useless.

One thing that I didn't see mentioned above was FIFO and LIFO questions. There were a couple of those, too.

More than the questions, it was probably the time that killed me. I managed my time poorly for the first half, and I wasn't able to stay focused for the second half. I think it's important to practice staying focused for 6 hours (with a break in between). Also, BRING A WATCH!! and make sure you party after the exam!!!!! GOOD LUCK EVERYONE!
@2006-06-05 21:39:29
Hi Guys,

Good to hear from u all. Finally the big day is over. I agree with most of the opinions . I feel that I ran out of time in the morning session and had to answer about 20 questions guessing it.

The second session was pretty good.I think the second session was easier when compared to the morning session.

The questions were tricky and most of the questions were like true or false in the afternoon session.It checks for the indepth knowledge in understanding the concepts not a lot of problems which had a lot of formulae involved.I didnt answer the questions on bonds well.

The lunch break was short,there were huge line for everything and very hot had only 10 mins to eat.The best thing could be to get some food from home so that we need not wait in long lines.

Going through the questions which we are not sure in the lunch will help as the questions in the afternoon session are similar to that of the morning session.

I am keeping my fingers crossed.Hope I will pass.Will let u guys know


@2006-06-06 16:12:04
Just a quick note. I agree that the first section was easier than the second but the questions in the first section were TRICKY. They seemed very simple at first but after reading them once again you found that there was just that one word in the wording that changed everything. I found at least 7-10 examples of that on the first section. The second part was definitely more difficult than the first, you could tell by the looks on the candidates faces after it was done. Good luck to everyone!!! I hope I see you all on the Level II portion of analystnotes!!!

CFA Discussion Topic: 2006 June Level I Questions

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I was very pleased with your notes and question bank. I especially like the mock exams because it helped to pull everything together.
Martin Rockenfeldt

Martin Rockenfeldt