– LOS 18i: describe exchange rate regimes – LOS 14i: describe how fluctuations in aggregate demand and aggregate supply cause short-run changes in the economy and the business cycle – LOS 18h: calculate and interpret the forward rate consistent with the spot rate and the interest rate in each currency 301. This includes questions where you have to study the entire equation and figure out how to complete the last sentence of the question with the right option. As we have already made clear, it has nearly 20% weightage, making it an important enough knowledge area for anyone pursuing CFA. It has often been pointed out that pass rates for this exam have been declining for the past few years, and it could be of help for participants to know the possible reasons behind it. Good luck. Please find enough time to practice 2-3 mock test papers. Those with a solid background in any CFA topics might require a lesser amount of time for preparation. This section includes forms of investment not covered under other knowledge areas of CFA. Hooper has occasionally given some of the clothes to his friends or sold the clothes instead of returning all of the clothing to City Pride. Generally, it is recommended to devote around 300 hours of structured study to complete CFA Level I successfully. The results can be accessed both on the CFA Institute website, and exam participants are also notified by email. – LOS 18j: explain the effects of exchange rates on countries’ international trade and capital flows. According to the CFA Institute Standards of Professional Conduct, these actions are: Timothy Hooper, CFA, is a security analyst at an investment firm. For example, when … Derivatives are complex financial instruments, and this section deals with them specifically, including the fundamentals of futures, forwards, options, swaps, and hedging techniques usually employed. 58.7k. What is the format of Level I of the CFA exam? In 2020, Level I of the exam is composed of 240 multiple-choice questions, covered in two 3-hour exam sessions. Level 1 "Prerequisite Economics Material. Our candidates can bring what they’ve learned through the CFA Program to real-world scenarios. LOS 12a: calculate and interpret price, income, and cross-price elasticities of demand and describe factors that affect each measure, LOS 12b: compare substitution and income effects, LOS 12c: distinguish between normal goods and inferior goods, LOS 12d: describe the phenomenon of diminishing marginal returns, LOS 12e: determine and describe breakeven and shutdown points of production, LOS 12f: describe how economies of scale and diseconomies of scale affect costs, LOS 13a: describe characteristics of perfect competition, monopolistic competition, oligopoly, and pure monopoly, LOS 13b: explain relationships between price, marginal revenue, marginal cost, economic profit, and the elasticity of demand under each market structure, LOS 13c: describe a firm’s supply function under each market structure, LOS 13d: describe and determine the optimal price and output for firms under each market structure, LOS 13e: explain factors affecting long-run equilibrium under each market structure, LOS 13f: describe pricing strategy under each market structure, LOS 13g: describe the use and limitations of concentration measures in identifying market structure, LOS 13h: identify the type of market structure within which a firm operates, LOS 14a: calculate and explain gross domestic product (GDP) using expenditure and income approaches, LOS 14b: compare the sum-of-value-added and value-of-final-output methods of calculating GDP, LOS 14c: compare nominal and real GDP and calculate and interpret the GDP deflator, LOS 14d: compare GDP, national income, personal income, and personal disposable income, LOS 14e: explain the fundamental relationship among saving, investment, the fiscal balance, and the trade balance, LOS 14f: explain the IS and LM curves and how they combine to generate the aggregate demand curve, LOS 14g: explain the aggregate supply curve in the short run and long run, LOS 14h: explain causes of movements along and shifts in aggregate demand and supply curves, LOS 14i: describe how fluctuations in aggregate demand and aggregate supply cause short-run changes in the economy and the business cycle, LOS 14j: distinguish between the following types of macroeconomic equilibria: long-run full employment, short-run recessionary gap, short-run inflationary gap, and short-run stagflation, LOS 14k: explain how a short-run macroeconomic equilibrium may occur at a level above or below full employment, LOS 14l: analyze the effect of combined changes in aggregate supply and demand on the economy, LOS 14m: describe sources, measurement, and sustainability of economic growth, LOS 14n: describe the production function approach to analyzing the sources of economic growth, LOS 14o: distinguish between input growth and growth of total factor productivity as components of economic growth, LOS 15a: describe the business cycle and its phases, LOS 15b: describe how resource use, housing sector activity, and external trade sector activity vary as an economy moves through the business cycle, LOS 15c: describe theories of the business cycle, LOS 15d: describe types of unemployment and compare measures of unemployment, LOS 15e: explain inflation, hyperinflation, disinflation, and deflation, LOS 15f: explain the construction of indices used to measure inflation, LOS 15g: compare inflation measures, including their uses and limitations, LOS 15h: distinguish between cost-push and demand-pull inflation, LOS 15i: interpret a set of economic indicators and describe their uses and limitations, LOS 16a: compare monetary and fiscal policy, LOS 16b: describe functions and definitions of money, LOS 16c: explain the money creation process, LOS 16d: describe theories of the demand for and supply of money, LOS 16f: describe roles and objectives of central banks, LOS 16g: contrast the costs of expected and unexpected inflation, LOS 16h: describe tools used to implement monetary policy, LOS 16i: describe the monetary transmission mechanism, LOS 16j: describe qualities of effective central banks, LOS 16k: explain the relationships between monetary policy and economic growth, inflation, interest, and exchange rates, LOS 16l: contrast the use of inflation, interest rate, and exchange rate targeting by central banks, LOS 16m: determine whether a monetary policy is expansionary or contractionary, LOS 16n: describe limitations of monetary policy, LOS 16o: describe roles and objectives of fiscal policy, LOS 16p: describe tools of fiscal policy, including their advantages and disadvantages, LOS 16q: describe the arguments about whether the size of a national debt relative to GDP matters, LOS 16r: explain the implementation of fiscal policy and difficulties of implementation, LOS 16s: determine whether a fiscal policy is expansionary or contractionary, LOS 16t: explain the interaction of monetary and fiscal policy, LOS 17a: compare gross domestic product and gross national product, LOS 17b: describe benefits and costs of international trade, LOS 17c: distinguish between comparative advantage and absolute advantage, LOS 17d: explain the Ricardian and Heckscher–Ohlin models of trade and the source(s) of comparative advantage in each model, LOS 17e: compare types of trade and capital restrictions and their economic implications, LOS 17f: explain motivations for and advantages of trading blocs, common markets, and economic unions, LOS 17g: describe common objectives of capital restrictions imposed by governments, LOS 17h: describe the balance of payments accounts including their components, LOS 17i: explain how decisions by consumers, firms, and governments affect the balance of payments, LOS 17j: describe functions and objectives of the international organizations that facilitate trade, including the World Bank, the International Monetary Fund, and the World Trade Organization, LOS 18a: define an exchange rate and distinguish between nominal and real exchange rates and spot and forward exchange rates, LOS 18b: describe functions of and participants in the foreign exchange market, LOS 18c: calculate and interpret the percentage change in a currency relative to another currency, LOS 18d: calculate and interpret currency cross-rates, LOS 18e: convert forward quotations expressed on a points basis or in percentage terms into an outright forward quotation, LOS 18f: explain the arbitrage relationship between spot rates, forward rates, and interest rates, LOS 18g: calculate and interpret a forward discount or premium, LOS 18h: calculate and interpret the forward rate consistent with the spot rate and the interest rate in each currency, LOS 18j: explain the effects of exchange rates on countries’ international trade and capital flows. One logical way would be to focus on quantitative methods that might find wider applications in other areas before moving on to financial reporting and analysis and leave more complex and advanced topics like macroeconomics and ethics for later. CFA Level 1 – Economics; CFA Level 1 – Economics. Please note that this does not guarantee for your pass which requires dedication hardwork and consistency. A study of these concepts provides some highly useful tools and techniques for the knowledge areas of fixed income, equities, and portfolio management. There are 20 questions in this test from the Economics section of the CFA Level 1 syllabus. Posted by 3 years ago. This may take a max of 40-50 hours, and these are a good starting point to prepare yourself for the exam. Spot Exchange Rates It is possible to back out the cross rates given... A central bank is a national institution granted prerogative to control the printing... 3,000 CFA® Exam Practice Questions offered by AnalystPrep – QBank, Mock Exams, Study Notes, and Video Lessons, 3,000 FRM Practice Questions – QBank, Mock Exams, and Study Notes. In June 2016, pass rates for CFA Level I exam were at 43%. In the month-long curriculum review period before the exam, it is generally recommended to practice more questions and appear for a mock exam offered by CFA Institute. This certification is awarded by CFA Institute, USA, and is globally acknowledged by top finan… Both sessions cover all of the Level I topics. – LOS 13e: explain factors affecting long-run equilibrium under each market structure It is meant for people already working in finance with a good amount of knowledge in a specific domain and willing to develop their expertise and professional skills and capabilities for career advancement. It would be important to gain an understanding of the subject-wise organization of the exam. CFA Institute offers several sample questions to help students understand the kind of questions that might be asked and the format in which they are presented, which would help avoid any confusion while tackling questions in the actual exam. Derivative Investments (DI), 3. – LOS 16l: contrast the use of inflation, interest rate, and exchange rate targeting by central banks This can create confusion and a lack of clarity, and it is recommended to continuously refer to the curriculum to stay on the right track for your exam. You know that this you are short of time; however, I think it just enough gives your one best shot. Each study session should be reviewed independently to ascertain the level of familiarity with the topics covered therein. 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