Level II prep advise - help

[sarita]

I just passed the Level I exam and moving on to Level II. Would any of the Level II candidates who passed but still check this forum--- would you be able to give me some advise as to what to concentrate on for prepping. I am using BT materials. Or what worked well for you guys??

Many thanks.
S

 

[braxxus]

The Basel related stuff is what drove me crazy. I would suggest going over the questions, they weren't all out before i took the exam, so I did poorly on current events as I did not read any of the source material. Going over the questions for everything is what helps the most.

 

[sarita]

Cheers. Thanks

 

[Harel]

First of all, congrats on Level 1, you are half way through the race....

2nd, Level II is more qualitative than Level I in a sense that the exam reviews the Basel II/III accords to a great extent, as well as current issues (May exam even had questions re May-2010 flash crash and european sovereign debt crisis), So this needs to be kept in mind when preparing to Level II.

If math is your game (I know that this was the case for me), I would recommand thorough reading of operational risk (i.e., Basel II/III, Liquidity risk, Model risk, RAROC, etc....) and current issues (although the suggested reading are sometimes long, they are recent topics so you can relate to these issues, and grasp the essence of the papers). L2 exam this year tested Basel II/III (even that B3 paper was only released about 6 months ago) to a large extent, as well as current issues such as May 2010's flash-crash and european soveriegn debt crisis. Many candidates were caught off-guard, as the belief was that GARP will not test Basel III accord in May's exam (which I believe had at least 2-3 question).
Regarding the market-risk, credit-risk and investment-risk, I would say that given a sufficient quantitative background, you can easily get through these topics with the excel sheets of BT and the summarized presentations.
The exam doesn't test (as far as I know) the math in great details (however it does impose some tricky questions and traps, so be aware....). A lot of the quantitative methods and readings are not even testable (as the time that it would take to solve a quant question in some case will "cost" you around 10-20 min to calc without an excel sheet). Also, there are repeating AIMs, especially securitization/CDS related topics, that appear both in the market-risk and credit-risk parts (This issue was dicussed here in the forum, and I know that David raised this issue to GARP).
Regarding the investment-risk, your main concern should be a solid knowledge of CAPM, Markowitz portfolio theory (beta, alpha, sharpe ratio, information ratio,...). If you have good knowledge of these topics, you should be fine. Nonetheless, a decent part of the section is related to Hedge-Fund business and strategies (again, fully qualitative).

Lastly, I averaged 200 hour of studying to Level II exam, with the last three weeks devoted to solving exams and going through weak topics. My take is that 150-200 hours should make it (again it vary from one cadidate to another) as long as you prepare according to a pre-defined scheme with enough time left to solve sample exams (Level II questions are significantly longer than the question you encountered in Level I). Don't base your assesment of the difficulty level on GARP sample exams (This year the sample exam was at least 3 notches below the actual exam). For this you have BT questions and past years exams.

Good Luck and hope the above information helped.

Harel.

 

[braxxus]

Level II is definitely much more qualitative, but I thought the exam questions seemed a lot quicker and there was a lot less of a time crunch. 20 less questions and very few if any long calculations. Finished the exam very quickly, just stayed around to check over and over. Basel and current events are the key points. Best of luck.

 

[sarita]

Many thanks to all of you guys for your feedback. Much appreciate it and very helpful.

Harel, many thanks for the detailed feedback.

Cheers,
Sara

 

[David Harper CFA FRM]

Harel,

Thank you for the detailed report on Level 2 (I am linking to your post in today's newsletter, as your guidance seems to me to be spot-on and consistent with other reports). With regard to "A lot of the quantitative methods and readings are not even testable," I agree 100%, btw.

David

 

[sarita]

Hi David,

Hope you are well. With respect to current issues, is it enough to just read your study notes? Do you have the actual articles posted somewhere?

Many thanks,
S

 

[David Harper CFA FRM]

Hi saray,

I hope you are well too! "Is it enough to just read you study notes?" Honestly, I do not know how to confidently answer that. Just for myself? No, I need multiple exposures ....

Actual articles? Do you mean the assigned source? If so, no, we don't sell/publish the core/source readings assigned by GARP

As you know, what I am doing is writing fresh practice questions; I just finished the set for Reinhart & Rogoff
http://forum.bionicturtle.com/viewforum/57/
The PDF of R&R will be available later today
(maybe the toughest questions I've had to write ... yikes, the R&R is dense ... i find all of 9. Current Issues challenging because it's potentially a lot of material and it's almost impossible to know what will be quizzed)

Thanks, David