Test Prep CFA Level 3 Certification Practice Test Questions, Test Prep CFA Level 3 Exam Dumps
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The CFA Level 3 test is the third step of the program that you need to make in order to become a Chartered Financial Analyst. Although in the previous two exams you were asked to analyze and describe, in this one, you have to justify your thinking by applying solutions and synthesizing information.
The CFA Institute offers this test to allow you to get the CFA designation and enhance your career. This last step is as important as the other two, so you need to make sure that you prepare well for it and deal with the previous exams like a pro.
CFA Level 3: Requirements
If you plan to sit for this third test of the CFA program, this means that you have already met all the needed requirements at the beginning of your journey. You now have a bachelor’s degree and have completed your bachelor’s program or your working experience of at least 4 years has helped you clear the CFA Level 1 and Level 2 exams. In any case, these two tests should be successfully passed by the time you apply for CFA Level 3. Also, don’t forget that your international travel passport needs to be valid and your knowledge of the English language should not let you down during the exam.
CFA Level 3: Test Details
CFA Level 3 consists of two sections with different tasks to complete. The allocated time that will be given to you to clear this test will be 4 hours and 30 minutes in total. Please note that you can take an optional break between these two sections.
The first part of the exam includes 8-11 constructed response questions or essays. Each of the questions consists of a vignette that is followed by several related items, which require a written response. Also, you can face with several multiple-choice questions. In the second section, you will need to deal with 44 multiple-choice questions. Each of them contains a vignette, which is followed by 4-6 items. The resulting pass rate of the test is 56%, and this is the highest one out of all three CFA exams.
CFA Level 3: Test Content
Each of the CFA exams covers the certain curriculum of the program, but every topic has a different weight depending on the test. Also, it is important to note that some of the domains are not covered at all by CFA Level 3. They include Quantitative Methods, Corporate Finance, as well as Financial Reporting & Analysis. The other areas are covered the following way:
- Portfolio Management & Wealth Planning
This section has the most impact on the exam content, which is 35-40%. Therefore, you must be ready that about a half of all the questions will be from this topic. They will include the details of the behavioral finance perspective, investment processes and behavioral finance processes, asset allocation, as well as asset allocation with the real-world constraints. You should also know about private wealth management, concentrated single-asset positions, and investment manager selection. The Investment Policy Statement is something you also need to be aware of.
- Fixed Income
As for this domain, you should be ready for 15-20% of the questions during the test. The information included in it is about the credit strategies of fixed-income portfolio management and fixed-income active management, yield curve strategies, as well as liability-driven and index-based strategies.
- Professional Standards & Ethical Standards
About 10-15% of the CFA Level 3 test covers the application of standards & code, professionalism in investment management, as well as asset manager code of the professional conduct. Therefore, you need to pay close attention to these details.
- Equity Investments
This is another part with 10-15% that you need to study to be able to answer the questions from it. Here you need to know about the strategies for the active equity investing, portfolio construction process, equity portfolio management, and passive equity investing.
- Economics
The subject area covers only 5-10% of the exam content and is all about the capital market expectations. The subtopics include the details of the framework and macro considerations as well as the forecasting asset class returns.
- Alternative Investments
This topic is not so big and has 5-10% as well. It is required to learn about the asset allocation to alternative investments and hedge fund strategies.
- Derivatives
This is the last domain that also represents 5-10% of the whole content. To answer the questions successfully, a potential candidate needs to know about the swaps, forwards, and futures strategies, option strategies, as well as the details of the currency management.
All in all, you need to be ready that the CFA Level 3 test can be much more difficult than the previous two exams that you needed to take. Therefore, you have to prepare for it with great deliberation to be able to deal with it on the first try.
CFA Level 3: Career Opportunities
After you have fully completed the whole CFA program, the pleasant changes will be not so long in coming. A prestigious job role, high income, and respect from your peers and colleagues are some of the benefits that you can get after obtaining the CFA charter.
The charter holders can apply the skills they gained in a wide range of positions throughout the global finance industry. A lot of companies are looking for these specialists to offer them such options as a Chief Investment Officer, a Consultant, an Analyst, or a Treasury Manager. The individuals can also reckon on landing a job as a Portfolio Manager, a Financial Analyst, a Finance Controller, a Defined Contribution Consultant, or a Relationship Executive. The sectors that you can also pursue include brokerage, asset ownership, and consulting.
As for your potential income, it all depends on the job functions you need to perform and your skill set. Thus, depending on whether your tasks are connected with the credit analysis, trading, wealth management, or, for example, financial planning, your average total compensation can be approximately $300,000 per year. The average base salary without cash bonus and equity can be as high as $180,000 per annum. If you ask for more responsibilities, take the cross-functional roles, or ready to mentor the junior team members, you will be able to earn even more.
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