Extent of Formulas Needed remember, question, complex, example, needed

hinsafdar

My question is in regard to the extent of formula memorization needed for the Lvl 1 exam. As an example, I've been working on the formula for sample kurtosis and its fairly complex to remember if I have to remember 100+ other formulas as well. Am I wasting time memorizing these formulas extensively? Or will I likely need them all?

Beatnik

You really have to use selective judgement. Pay attention to which formulas are used heavily in the EOC questions. When I did L1 I used a combination of how complicated the formula was plus how many time it was mentioned in the EOC questions and whether or not it is specifically mentioned in any of the LOS. Extremely complex formulas are unlikely to be on the exam, as the exam tests more concept than execution (although there is a lot of execution). It's more important to know what it means for distribution to have a kurtosis of 3.5 then it is to know how exactly to calculate kurtosis.

There are 240 questions over 360 minutes of the exam, leaving you about 1.5 minutes per question. Keep this in mind when you think about which formulas to memorize. Is the formula so long and complex that you couldn't be able to write and calculate it in 90 seconds? This is not a perfect litmus test, but it is a starting point. For something like kurtosis you're talking about summing, cubing, and dividing the differences of several pairs of numbers. These are things to keep in mind.

draz

i looked up the PDF of all the LOS's online and copied and pasted all the ones that said "calculate", "compute", "estimate", "determine" etc. into one MS Word document and then wrote out and learned those formula. I didn't need to calc Kurtosis or Skewness on the exam for L1 and the LOS backs that up. On the other hand, variance of a two stock portfolio formula is a bit of a bear and i learned it and on the CFA mock test they asked me to calculate it but gave me the formula in the question which was odd.

ogoluwa

When the difference between a pass or fail is a few marks, why take the risk? However, I know where you're coming from, NYLS - I wouldn't plead complete ignorance.