I’m a big time believer in the 80/20 principle and strongly believe that it applies as much if not more to the CFA exam than anything else. If you are not familiar with the Pareto principle, it simple states that 80% of the results originate from 20% of the effort and that the remainder of the effort will only yield 20% more in terms of results. That is very true in terms of the CFA exam. Why?
Quantity of Material
The amount of material included in the CFA curriculum is amazingly big and to know every single part of it, you would need to spend an insane amount of time. One of the keys to passing the exam is recognizing the critical parts of the exam. The most important parts of the exam will come up 80% of the time in the exams and those are the parts that candidates need to focus on. You must admit to yourself that you will not know all of the material for the exam. You will know most of the important parts of the material and, that is what I personally always applied myself to do. Trying to learn all of the material will result in:
-Losing time (do I need to remind you it’s your most valuable resource)
-Not spending enough time on the critical material
When you are correcting practice exams, give yourself an amount of time. It should not take you 8 hours to correct a practice exam. If you answered 120 questions, you likely got between 50 and 70 right, depending on where you are in your studies. That leaves 50-70 questions that you got wrong and did not understand. You should probably focus on at most half because you see that they are concepts that are being tested over and over. That means the probability of facing similar questions in the exam is strong and you need to know this material. I would prefer spending 3 hours on 20-30 questions than on the entire questions that you missed. As your study moves along, you will get an increasingly clear picture of what is critical material and what isn’t.
It’s the same reason why some sections of the exam need to be mastered but others not as much. While derivatives is important and you should know it, I would put more time into making sure that you are ready in a “critical subject” than making absolutely sure that you will not fail derivatives. I think it’s very important to know which sections you are at risk of failing and then deciding if that would be acceptable or not. Of course, failing no sections is the ideal but I think it’s important to always be strategic in how you spend your studying time.