Well, I got my test results back for the C.A.I.A. level 1 exam. There is an article at Wikipedia for a little more background. Chartered Alternative Investment Analyst

I think the exam will be harder starting next September ( 2007 ), as they are removing the Investments part. But as for now, here are my impressions.

[1] Easy if you study enough

That is the whole point about this kind of test. It tests you on an understanding of concepts and applications, not minutiae. The questions on the test are not hard IF you understand what is going on with the concept. and by enough a mean a long enough time to get used to the concepts that you didn’t get on the job so that you can apply them. Actually, any test can be easy if you study enough.

[2] Work on the things you don’t know

If you , like me, are coming from a particular field, you will have to study some in the other areas. For me the derivatives parts were easy as well as the regulations.

The part that was not so easy was the fixed income and real estate. I never worked in either of those two area, so I was a little out of sorts.

[3] If you have a CFA, the test is easier FOR NOW

Note that the exam is changing for the Sep 2007 exam. Right now there is a lot of overlap between the CFA. The CAIA uses the CFA ethics book, so you already have that part and the Investment book is pretty standard for the CFA ( and MBA’s use it a lot also ). After Sep 2007 , only the ethics book will remain, with the rest becoming just alternative investments.

[4] Take a prep course

It will save you a bunch of time. If nothing else, it will help you organize the study materials. Schweser is finally coming out with a prep course , so I expect them to become the ‘big dog’ in the CAIA test prep area like they are for the CFA. If you have the time, EDHEC and INSEAD have three day programs. You will still have to study some after these intensive classes, so don’t think you can spend three days and then pass.

Prep packages

Schweser They have their first study guides just coming out now, but if they are as good as their CFA guides, it should be nice.

Uppermark Highly recommended. Great self study course.

KalmAI - Better to say nothing …

[5] Practice with your calculator

For me, I had practice test software that was the most help. The concepts were cool and I didn’t have a problem with them using the software, the test software did help me point out my weak spots in test taking. My main problem was making manual mistakes with my calculator. I sit in front of a computer all day with R and Gnumeric around for anytime I need to calculate anything. Doing things the old fashioned way took some time.

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