I breathed a huge sigh of relief after going thru these Readings. They build on the earlier Econ material but most of this should be common sense if you follow the capital markets at all, especially in the past year. This section was infinitely more interesting than the others, especially since you can easily see how this is working in current events.

Reading 24 basically goes over how money is created and the functions of banks and the Fed. If you have any degree in finance, this material is probably not new to you and it wasn't to me. I found this link to be helpful also

Monetary Policy of the Fed

Reading 25 reviews the demand for money and how interest rates get determined.

Reading 26 speaks on inflation.

Study Notes

Reading 24

Reading 25

Reading 26


I didn't get to finish Readings 27 and 28 to finish off the SS which I'll do tomorrow. I also want to take a progress test and close off Econ before I dive into the most important section of the exam, FSA.

Wow, this SS kicked my rear end. I read that Econ was the hardest part of the exam for most people and I now know why. I probably spent way too much time studying this for the % on the exam but I freaked out on how bad my first pass at the quizzes were. I was completely lost in certain parts. Going back and re-reading the material and rewatching the lecture helped a bit and I slowly increased my scores but wow, this SS made my head hurt. I definitely plan on reviewing this in more detail later on.

I did tweak my approach a little. Now when I take notes, I also go back and add little things I learned from the questions. It's amazing how in this topic you may think you get it but then when faced with a real question you're lost.

One interesting thing I noticed is that Stalla quizzes you more on the calculations from this topic. A lot of questions dealt with finding out the true equilibirum level of employment, etc. I don't know if that was to reinforce the concepts because the CFAI material doesn't seem to focus in on that as much.

I fell behind on the schedule due to this SS taking longer than I anticipated. Will be starting SS6 today with the goal of finishing it and doing a Progress Test for SS's 1-6 tomorrow.


My Study Notes

Reading 18

Reading 19

Reading 20

Reading 21

Reading 22

Reading 23

Time Started: 2008-08-27 19:52:51

Time Ended: 2008-08-27 20:26:32

Total Time: 00:32:08

Questions: 33

Points Possible: 36

Points Correct: 26

Score: 72%

Same results. Looks like Stalla has a bug in their software since I had the same score but the %'s were wrong. Unfortunately they don't save the Progress Test results(big head scratcher there).

Schweser does not break down the results by SS which is weak too. Sure you can do it on your own but the results page should break this down for you. Would also be nice if they showed you the breakdown on question difficulty. Would help to see how you fared with respect to the difficulty of the questions. Schweser does allow you to choose the difficulty of progress test
questions and I should probably choose only intermediate and advanced
questions just to really test myself. Stalla does not allow you to
choose the difficulty. Per Stalla the real exam contains about 40%
basic difficulty, 50% moderate difficulty and 10% extremely difficulty.

So far I'm feeling pretty good about where I stand with the studies. Some of the questions I got wrong were due to stupid mistakes(not seeing least accurate vs most accurate) I should have ironed out by test time or as before forgetting a formula that I'll have memorized by gametime.

Now off to read SS5 before Stalla lecture tomorrow night which covers the 2nd half of SS5 and all of SS6.

Overall Result

# Q's - 36
# Q's Answered - 36
# Correct - 24
% Correct - 66%

Ethics - 13 out of 18
Quant 1 - 5 out of 7
Quant 2 - 5 out of 7
Econ 1 - 3 out of 4

Got over 70% in each section but overall only a 66%. One more question right would have brought me over the 70% mark but with more questions I'm confident I'll pass that.

I noticed some of the Progress Test q's were directly from the PassMaster quizzes I had taken earlier. While I had forgotten the answers to most of them, there were a 1-2 I remembered which kind of skews the results. A good chunk of the answers I got wrong were simple mistakes such as not reading the entire answer, or forgetting a key formula.

Overall, I'm pleased with the first progress test. I finished the first run thru the questions with 20 minutes to spare(had 54 total minutes to answer 36 Q's) which gave me time to go back and review my answers. This is encouraging since if I can maintain that pace, it means I'll have time to go back thru the test again and re-examine any tough questions I identify. I also learned that it pays to jot down Q's you are unsure about so that when you go back and review your answers you do directly to the Q's you have issues with.

Later on today I'll be taking the Schweser Progress Test for the same SS's and will post the results.

I'm running on fumes right now due to my Red Bull fiasco last night and a long workday. I don't want my fatigue to skew my Progress Test results so I'm going to pick that up tomorrow. I did go thru the Stalla lecture notes for SS's 1-3 as well as the Flashcards. I've identified a few areas of weakness already

Ethics - Nothing so far. I'm pretty solid on the material. I've gone thru this 4 times now and will be reviewing again before exam.
Quant 1 - Money Weighted Returns, Frequency Distributions, Probability(Bayes Theorem, Tree Diagrams) Most of these I didn't spend much time on which is why they're giving me problems
Quant 2 - Pretty good here but would like to practice more on the Hypothesis tests.

Plan for tomorrow is to review SS4 and then go thru progress test in Stalla and Schweser. I think I'll have to shift the SS5 and SS6 review to Wed and catch up on the SS3 notes another time.

So new plan is:

Tonight - Review SS1-3
Tomorrow - Progress Test(Stalla and Schweser) SS1-4
Wednesday - Review SS 5 and 6 if possible
Thursday - Stalla Lecture SS 5 and 6
Friday - Quizzing on SS5 and 6
Saturday - Progress Test SS1-6

Sunday is a rest day. Maybe the beach or pool. I'd like to work in some leisure time if possible once a week just to keep my sanity. Maybe I'll use this to update the SS3 notes.

After missing the past 2 weekends, I was worrying that I was falling behind in the studying. Well this past weekend I caught up and now I'm back on schedule. Last week in the Stalla class we reviewed SS4 and part of SS5. Well, let me tell you, I haven't taken Econ since freshman year of college 15 years ago and my head was hurting bad!! I had to leave early since I was not understanding anything that was being covered.

The good news is that after hitting the material hard over the weekend, I now feel comfortable with it. I had enough time to go back and review SS3 in Quant which I didn't get a chance to really quiz myself on. I focused on the hypothesis testing section mostly. The plan for this week is:

Tonight - Progress Test on SS1-4
Tomorrow - Review SS 5 and 6 if possible
Wednesday - Go back and update notes for SS3 since I didn't get a chance to do them.
Thursday - Stalla Lecture SS 5 and 6
Friday - Quizzing on SS5 and 6
Saturday - Progress Test SS1-6

Some notes from this past weekend:

1. Red Bull Sugar Free works wonders. I picked up two cases from BJ's and it's helping me stay alert and my concentration is much better. I'm hurting today cause I made the mistake of drinking one at 10pm last night and stayed up till 2:30AM.
   
2. I skipped the CFAI readings on Econ and just used the Stalla material. I plan on going back and doing the questions there and if I have time skimming thru the material during my final review.
3. SS17 is all about knowing those graphs and the relationships.
4. I started using the Stalla flashcards to help me take notes and review a section after I was done with it. Very helpful. I brought the ones for SS1-4 to work with me and I plan on blowing thru them and the Stalla lecture notes(not study guide) before I start the progress test.
5. Progress Test for SS1-4 consists of 36 questions, broken down as follows Ethics(18), Quant 1(7), Quant 2(7), Econ 1(4). Total of 54 minutes alloted for the test.
6. Biggest tip is to keep in mind that this is only 10% of the test. 24 questions, 12 in each session(morn and afternoon). There is lots of material but don't overdo it studying for this. Law of diminishing returns LOL...
   

My notes for SS4 below.

Reading 13

Reading 14

Reading 15

Reading 16

Reading 17

Ughh, as I predicted, this past weekend was horrible from a study point. With my kids birthday's and family in town, I didn't even crack a book. I'm behind currently which is not good. The only silver lining is that I've seen this material before so it shouldn't take much to catch up. I will be building some time after I finish Stalla to make sure I go thru this material again since it didn't get the proper attention the first time. I'll be taking today and Friday to try to review SS3 and do problems. Tomorrow night's Stalla class covers Economics.

Into Our Fifth Decade

Overview how the CFA program developed and how the passing rates are determined. Some real good information here, I suggest every candidate read it.

Check on the right. I'll be adding some sites I use not only for the CFA but also for my personal financial reading.

Enjoy

As promised here is a link to my study plan. I ripped this off from Stalla so I take no credit for it. I just made an excel worksheet to log my time and dates I spent covering each section. This may not display correctly in Scribd so download it and open locally.

My Study Plan

I got a little off track this past weekend and will also be a little further off track this upcoming weekend due to my kids birthday. Here is how I try to structure my studies. I'm sure I will refine this as my schedule dictates.

Monday - Read CFAI study session that's covered in the Thursday Stalla lecture. Watch Schweser videos and take notes. (3-4 hours)
Tuesday - Do problems from CFAI text and Schweser QBank. From the CFAI text I try to focus on computational problems not "describe what such and such term means" ones. I definitely do the questions from previous CFA exams. (3-4 hours)
Wednesday - Read Stalla Study Guide and finish any questions from Tuesday I couldn't finish. (3-4 hours)
Thursday - Stalla Video Lecture (3 hours)
Friday - Review annotated Lecture Notes from Stalla and Flashcards (2 hours)
Saturday - Quiz using PassMaster HW. Try to wrap up all questions with 90% completion. Update notes with new gotchas and things to watch out for based on results of quizzing. (4-5 hours)
Sunday - Same as Saturday. Based on schedule, I'll use one or both days to make sure I do my review and note updating. When I have to do a Progress Test, I'll probably use Sundays.

Rinse, wash, repeat starting on Monday all over again.

Total Time : 15-18 hours.

This is less than what's recommended based on how much time I have left until test but since a lot of the upcoming material and the Quant stuff has been seen before in my Masters programs I think I'll be OK. I also have a month to review and catch up on any material I didn't cover thoroughly the first time.

After this weekend, I have no plans in place until after the test so I expect that I'll be able to stick to this plan. Watching the kids is a wild card though and football is starting up soon which is why I hope to wrap up everything by Saturday and use Sunday to do quick reviews and note updating.

I hope this helps.

I left work and went to my local library to quiz myself on the Quant 1 material again using Stalla PassMaster this time. A few things I noticed

1. The Stalla study guides are great to review before you quiz yourself. You won't get a ton of theory here(that's what the CFAI texts are for) but they do give lots of examples to work thru for each LOS with the solutions and calculator instructions right in front of you.
2. Having the LOS in front of each section helps a ton in making sure you're comfortable enough to say you know the material.
   
3. I found it's better to know the answer after each question. Helps with the confidence when you get it right but you're also able to catch the issues that would trip you up on future questions. This helped me tremendously with the annuity problems where I discounted by one period too many. After screwing up the first one, I got the remainder.
   
4. Stalla asked some bond questions here that I found easy just because I have taken Fixed Income before. Some of the questions I could answer without even calculating.
5. I like how Stalla broke up the annuity questions so you're forced to switch back between BEG and END modes. It really got me into the habit of double checking and also clearing my TVM registers.
6. Some of the questions are a little unfair in that you haven't seen the material presented in such a way that would make answering them easy. Not a problem though as in most cases I was one step away from having the answer correct. I liked that these questions pushed me a little bit further than otherwise.
   

Some gotchas I need to watch out for and stuff to review.

1. Knowing how many periods to discount an annuity problem.
   
2. If given a bond TVM question, use the YTM given as the I/Y not the coupon rate.
3. Alternately, if given a perpetual bond question, use the coupon rate to find the payment, then divide by current interest rate to find PV.
4. I found myself reading the questions too fast at times. For example, they'd ask for PV for amounts received in year 1 2 and 10.Blowing thru the question, I think it's years 1-3 and of course there's an answer that assumes you make that mistake.
   
5. Gotta review the time weighted and money weighted material and do questions over. For some reason I'm finding this very hard to wrap my head around.
6. Review quartiles, deciles, etc.
   

My results

TVM - 32 out of 44 - 72%
Discounted Cash Flow Applications - 20 out of 24 - 83% - I had to skip the time and money weighted questions.
Statistical Concepts - 14 out of 17 82% - I had to end early since the libary was closing.

I'm realizing how much this past weekend messed me up. I haven't even done the sections on probability nor finished some of the PassMaster questions. I have tomorrow and then I'm already into Quant 2. This upcoming weekend is kinda shot cause of my kids birthday party so I need to figure out how to catch up.

I've mentioned this before but after watching the lecture for Quant 1 it's important to reiterate that they skip over major points in the video lectures to focus on the core concepts. It's important to either read the CFAI material first and/or the Stalla study guides, preferably before you watch the lecture.

I have found that the lecture notes, properly annotated with the suggestions from the professor are a great way to review the core concepts before you sit down and quiz yourself.

I started Quant 1 last week. Most of this is stuff I covered in my Masters program but I didn't want to take it lightly. It's 12% of the exam so you can expect 28-30 questions on it.

Reading 5

This is the TVM(Time Value of Money) reading and this was just like riding a bike again. Biggest gotchas are knowing how to properly use your calculator, the difference between a ordinary annuity and annuity due. Do lots and lots of problems and this becomes second nature. My first time thru I focused on solving the problems but on my 2nd go round it was all about solving them faster. Some of these can be solved numerous ways but you want the quick points so you can use the extra time on the harder questions

Ordinary Annuity - payments come at end of period(most loan payments)
Annuity Due - payments come at beg of period(rent or lease payments)
Set calculator to BGN mode for all annuity due questions [2ndPMT; 2ndENTER].
Tip off is when payment is due
• 3 gotchas with Calculator
○ Pmts per year stuff
○ Begin – end mode stuff
○ Not clearing their calculator


Reading 6
This is the NPV and IRR material. Again, second nature to me. Had to read up on the t-bill return metrics but once you memorize the formulas and understand how the Holding Period Yield is common to all formulas you can easily solve most problems. It was new to me to hear about Money weighted returns being equal to IRR as I saw that material in my Portfolio Management class.

My notes for this reading

Reading 6


Reading 7

Statistical concepts. Nothing new for me but a good refresher. Know Chebyshev's equation for sure and review some of the distribution(frequencY, histogram) stuff good. I skipped over this thinking it wasn't important and had a few questions on it.

My notes

Reading 7


Reading 8

This is where I had the most trouble just because I haven't seen probability theory since undergrad over 10 years ago. I'm still a little rusty with it and have made notes to make sure I review this more thoroughly once again. Bayes' Theorem took a little while to get the hang of and I still don't seem to have my mind completely comfortable with some of the probability material. The counting stuff was easy, especially once I found the TI BAII Plus keystrokes for it.

My notes

Reading 8

This past weekend and upcoming weekend have thrown the first monkeywrenches into my study plan. I lost all of this past weekend due to a weekend trip for my kids birthday party and this coming weekend is the local party here in Miami. I have family flying down so I'll be swamped pretty much. I plan on wrapping up this material tomorrow by taking the remainder of the PassMaster and QBank questions and try to pre-read as much as I can before Thursday's class. I know the next Study Session is a little more complex and some of it is also new so I have to make sure I don't fall too behind.

I've been using both Schweser QBank and Stalla PassMaster when quizzing myself. This is of course in addition to answering the questions in the CFAI readings. I'm not going to make a recommendation as I feel candidates should be quizzing themselves using all possible methods out there as much as possible. Here's my review of each.

Schweser QBank
- the software allows you to review each LOS individually. You can take notes against each LOS and also mark it complete to help yourself keep track of where you are in your studies.
- you can quiz yourself on specific LOS. I found this useful if I wanted to drill on a specific LOS I was having issues with.
- you can create individual exams by taking individual study sessions or combining several. For example, you can quiz yourself on Ethics and Fixed Income together if you want.
- When you create new exams, you have the following options

1. # of questions(max of 120)
2. How do you want the distribution of questions(equal vs using CFA distribution, i.e 15% for Ethics)
3. Difficulty of questions(Advanced, Intermediate, Easy)
4. Whether to include previously answered questions or previously incorrectly answered questions
5. Score as you go
6. Display Answer and Explanation after every question
7. Take it electronically or print out exam.
   

- You can also update the software with new questions downloaded from the Net.
- It times how long you take to answer each question. If it gets past a minute the timer turns yellow and then turns red when it gets past 90 seconds. This is agood way to see if you're taking too long or how fast you blow thru certain questions.
- I found the questions to be pretty good and challenging although in come cases a little unfair. There were cases where the answer is obvious but the way the question was phrased made it misleading.

Stalla PassMaster
- Similar to Qbank in that it allows you to drill down on a specific Study Session and topic and quiz yourself.
- You cannot select the difficulty of questions. Your only options are to answer all questions, previously unanswered or incorrectly answered questions, and marked questions. Marked questions are those you want to review at a later time.
- You can take progress tests. What I like about this is that it weights the # of questions based on the CFAI %'s. For example, if you choose Ethics and Quant 1, you'll get 25 questions which is equal to the CFAI weightings.
- The best feature is the import/export feature which allows you to keep your progress in sync across multiple computers.
- Questions were challenging and varied from easy to difficult.

Both products are essentially identical and I'm glad I have both. I highly recommend purchasing both. The ability to sync your progress is a big advantage for Stalla though and I recommend that Schweser implement this in future releases.

I purchased their Enhanced System which includes the flash cards and the mock exam and review. Here is what you get in the package.



You get a bunch of study guides for each study session as well as Lecture Notes. The study guides are broken down as follows:


6 books total
- Study Sessions 1 - 3 - Ethics and Professional Standards, Quantitative Methods
- Study Sessions 4 - 6 - Economics
- Study Sessions 7 - 10 - Financial Statement Analysis
- Study Sessions 11-14 - Corporate Finance, Portfolio Management, Equity Analysis
- Study Sessions 15-16 - Fixed Income, Derivatives, Alternative Investments
- Practice Exams Workbook - 3 practice exams.

The study guides are pretty much copies of the CFAI readings, condensed slightly. There are questions at the end of each section.

The lecture notes are broken down into individual Study Sessions. This is what you bring to class with you every week and add notes to. I want to clarify a statement I made before. Stalla prints the LOS's in the Study Guides, but not in the Lecture Notes

You also get a Startup CD which is a tutorial about the CFA program and Stalla's approach to it(worth watching in my opinion) as well as the PassMaster software. I'll be comparing this to Schweser's Qbank in a separate post. You also get the Lecture CD's which is what you watch in class every week.

If you purchase the Enhanced System you also get the Flashcards. I'll review those separately too. Lots of material. I need a new bookcase just to store all of this and the CFAI books. Add in my textbooks for school and I have a little library.

As a father myself of about to be 2 year old boy girl twin toddlers, coming across this video of Peter Olinto with his son brought a smile to my face.



Peter Olinto & his son

This one about Puff Daddy is also a classic, not only is this a great anecdote, he went to Cardinal Spelman in The Bronx which is a local Catholic high school. I didn't go too deep into my own background but I was born and raised in The Bronx and attended two Catholic high schools, Cardinal Hayes and St. Raymonds. One more plus in the Peter Olinto column for me....




Peter Olinto talks about Puff Daddy

I recommend using a RSS reader like Google Reader(what I use) if you'd like to know when I make posts. There is a link on the left where you can subscribe to the feed.

I began the Stalla prep course last night. Showed up late since it conflicted with my last class for Credit Analysis but my team presented our case study early and I left right after. Luckily the prep course was just a few short blocks away in downtown so I didn't miss much.

The Stalla system(classroom version):
Study Guides - you get a booklet for each Study Session that has the slides with key notes. You bring these to class and are expected to annotate them by watching the videos. These ARE NOT SUBSTITUTES FOR READING THE ACTUAL STUDY SESSIONS. I had to make that clear since I am afraid people will think you can appropriately study for the exam simply by reading the cliff notes versions. Some may be smart enough to do so, but most will fail. In my case since a lot of this is reviewing material I studied in my Masters program I could get away with it but I'm still acting as if I've never seen the material before and making sure to read the CFAI material first.
Classroom - Here's how the class works. It doesn't consist of someone lecturing although a professor from a local university will typically moderate it. They simply show the video lecture off the CD's you receive when you purchase the system. The professor then jumps in from time to time to add a key point or two and to walk thru the sample problems. It reviews CORE CONCEPTS and you get to work thru exam type problems.
PassMaster Database - tons of questions to help you retain the knowledge.

A few observations:

1. Peter Olinto who did the Ethics lecture is an EXCELLENT instructor and I wish I had him for some of my master's classes. He's really concise and to the point and uses relevant examples to help drive the key concepts home. I understand he does the Ethics and Financial Statement sections, I'm not sure what other topics he covers. I read somewhere that he started as a CPA then got a law degree and then the CFA charter. That's impressive.
   
2. Peter enhances the Stalla material by suggesting we add notes to the margins and below the bullet points. I found that most of the notes he asks you to take are very important to know since some of the ethics questions have little twists.
   
3. The "exam type questions" are pretty easy and can mislead you since I suspect the actual exam questions will be much harder. I do like that they break up the lecture to do a sample problem right after you review a key concept. Makes it a little easier to drill on the topic vs at the end of a long study session.
   
4. Stalla does not list the LOS in the Study Guides(at least the Ethics one). Not a big deal but I think this would be helpful.
5. Class time was about 2 1/2 hours. I'm sure this will vary for each session.
6. There were about 12 people in my class. This is also helpful because not only do I have potential study partners going forward, these people may also wind up being colleagues in the future and at the bare minimum, I'll be expanding my network which is never a bad thing.

I'm glad I chose Stalla over Schweser. I've seen the Schweser video lectures and while they're good, they're missing those extra notes I mentioned before that help you on the exam questions. I compared the Ethics versions of Schweser and Stalla and I felt that Schweser covered the material well but Stalla seemed to add that little bit extra. I just felt a little more confident after the Stalla lecture. Just my 2 cents.

Since this was the 3rd time I went thru the Ethics material I feel really comfortable with it. I'll be updating my notes with the extra points I got from Stalla also. Tonight I will be reviewing the Stalla notes and then taking tons of questions before putting this to bed for a few weeks.