Those who have taken the CFA exams and failed, communicate the impression that the actual exam is harder than most practice exams available from review services. There are several reasons for this perception. The chief among them is the context of the actual exam. The exam is held under a strictly controlled environment which is nearly impossible to replicate outside. Candidates are under a time crunch and the environmental conditions may not be too friendly. Given the stress, mind may easily go blank on some concepts. Last but not the least, the CFA Institute never reveals its mutliple choice questions, unlike when the exam was held in an essay format.

There are over 700 LOSs at Level 1. There are only 240 questions on the exam. The number of combinations is vast. If one has to put together a test with a question testing only one LOS, there are ⁷⁰⁰C₂₄₀ tests possible. We tried to do this calculation in a spreadsheet and it would not let us compute a factorial of a number greater than 170! To give you an idea of the vastness, we scaled back the LOSs to 170 and proportionately scaled back the test to 57 questions and computed the result for ¹⁷⁰C₅₇. The answer was a staggering 8.03 x 10⁴⁵ unique test combinations! Imagine what the result would be for the original problem with 700 LOSs! This experiment does not even consider the possibility of multiple LOSs being tested in the same question which is not unusual on the exam.

The purpose of this exercise is not to scare you but to illustrate the futility of trying to predict the actual exam. The focus, instead, should be on understanding the concepts and how they come together in the CFA curriculum. There are good practice tests and then there are bad practice tests. Our approach to creating such tests is that they should help you clearly understand the LOSs and how they are related to other concepts throughout the entire curriculum. Once you understand the basics, you have nothing to fear. Irrespective of what the CFAI throws at you on the exam, you will be prepared for the worst. Most of all, the gigantic combinatorial potential number of unique tests would be no threat at all. A practice exam should bring together important LOSs and present questions in a way that not only test your knowledge but also make you think outside the box for alternate ways in which concepts can be tested on the actual exam.

Compare the CFA exam with a football or a soccer championship game. Both sides study the films of what the other side is capable of doing in different situations - offensively and defensively. Each play of the opponent can be dissected and a response can be planned before the game begins. All of this requires hard work, but of a different kind - foused on the immediate opponent. The CFA exam is very different - there are no training films, and there are no known plays the opposition can throw at you. You are essentially playing against a very well hidden opponent. The only solution is to study hard and master each element of the game, and then go to the championship game with a positive instinct to win the battle! Good luck.