Exam strategy - 3 Ethics

Thank you guys for viewing my blog and thank you for all the comments. I was carried away at work for a few days, finally had sometime tonight to finish this post on ethics, which I believe is one of the first few things you need to understand for any exams. So today’s strategy is on ethics.

Passing the ethics section is absolutely critical for all 3 levels.

CFAI has made it clear the Code of Ethics and Standards of Professional Conduct ("Code and Standards") are the ethical benchmark for investment professionals around the globe, regardless of job title, cultural differences, or local laws. As a CFA Institute member or CFA Program candidate, you are required to follow the Code and Standards. The Code and the Standards are fundamental values of the CFAI and are a significant portion of all 3 exams. Passing the ethics section is absolutely critical for all 3 levels.

Why you need to treat ethics seriously

“Rumor” on the street says performance on the ethics section can mean the difference between passing and failing the exam. Even thought there’s no way to verify this statement, I have heard many CFA tutors mention that ethics will help you make the cut if you land right on the pass rate percentile.

If you master ethics, it may kick the tires in your favor if you do not perform as well as you expected on exam day. Another benefit of mastering ethics is that since much of the study material is similar across all three levels, a good grasp of it in l1 will give you a head start in preparing for l2 and 3.

More importantly, ethics is easy mark. There is no formulas to memorize, no calculations required, and nothing in this section is mentally challenging to comprehend. It’s one of those things that a 5% worth of your time will get you a 15% return, plus this is the thinnest chapter in the entire curriculum, so make it work for you.

In a professional setting, learning the CFA ethics will also help you recognize and avoid violations of the code and standards.

Study techniques

The following techniques helped me pass this section.

a.     I focused on CFA text only. To start, I recommend reviewing the ethics section briefly at the beginning of the preparation, then go on to study the rest of the curriculum.  While I prepared l1 exam, I always had the one pager Ethics Standards and Codes of Conduct with me so whenever I had time, I can pull it out and review the key points. This helped me reinforce the key concepts of the codes and standards.

Closer to the exam, I started to spend more significant amount of time on ethics reading.  Thoroughly read required ethic sections, read the case examples very carefully, I can’t emphasis more on the examples they give in the text, these will help you grasp the exam questions quickly given a time constraint during the exam.  I went through the ethics section thoroughly at least twice, and reviewed the examples for each standard and marked key points afterwards.  

b.     One last note, I removed the ethics section from the book and made a separate binder for it.  This was a good practice so I don’t have to carry the entire book around and I could read the section anywhere I go. 

To conclude, I would urge all candidates to study this section with appropriate allocation of your time, treat it seriously and review the section at least twice. Anyone who’s serious about this exam should pass this section per reason listed above.