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How to Pass the CAIA Level 2 Exam in 5 Steps

Tips and Tricks to passing the CAIA level 2 exam

Are you signed up for the CAIA Level 2 exam and wondering how to pass the final level to earn your charter in alternative investments?

I recently took and passed the CAIA Level 2 exam. I must say - the materials are quite deep and challenging, especially if you do not have a solid background in finance and alternative investments. However, one thing is for sure—alternative investments are a super interesting topic to learn.

Here are my top 5 tips for passing the CAIA level 2 exam!

1. Study with an approved provider

The CAIA Association will provide you with books and readings to prepare for the exam, but they are not enough. You will need supplementary materials to study. My suggestion is to buy additional materials from either UpperMark or Edge Designations.

I used both of them to balance each other's strengths and weaknesses. While neither is perfect, combined with the CAIA readings, they provide sufficient preparation for the exam. Unfortunately, the CAIA Association doesn't offer enough practice problems, but UpperMark and Edge Designations will give you solid practice.

2. Start Early

The CAIA Association will open the registration window 5-6 months prior to the exam date. As soon as registration opens, sign up and start studying.

Don't wait until the last few months to start studying even if you have a good knowledge base. While you may skip 1-2 days occasionally, you will have enough time to make up for the missed hours. The CAIA Association suggests a total of 250 hours of study. To guarantee success, focus not on the number of hours but on the quality and consistency of your study sessions. As long as you study every day and put in the effort, you will pass.

3. Practice

The CAIA curriculum has a ton of materials to learn from, concepts to memorize, and formulas to apply.

Some concepts will be familiar and easier if you have a bachelor's degree in finance or even the CFA designation, but for other topics, you need to take the time to understand them thoroughly.

Like the CFA program, you need to practice consistently. The CAIA Level 2 exam includes both multiple-choice questions and essay questions. The multiple-choice questions can be detailed, so pay close attention to keywords and key concepts in the book. For the essay questions, follow the command words carefully. If the question asks you to identify, only identify. Adding more information won't earn you extra points and will likely waste your time.

4. Join WhatsApp Study Group

If you buy the Edge Designation materials to prepare for your exam, you will be able to join the WhatsApp group with other candidates as well as the head of the Edge Designation program for questions related to the materials.

The group is a great tool for exchanging information, asking questions, and motivating each other. Since studying for the CAIA exam is largely a self-directed process, having people to rely on can be very helpful.

5. Revise Everyday

You will have 5 months to study for the CAIA Level 2 exam. Given the depth of the materials and the hours required to study, my suggestion is to revise every day. Take 1 hour a day to review previously studied materials, practice what you have learned in prior study sessions, and use cue cards to test your memory of terminologies, key concepts, and definitions.

Consistent revision will be fundamental especially because the CAIA Level 2 exam requires a lot of memorization.

Good Luck!



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