Eight Days to Go
May 30, 2008 in CFA
The exam is a week from tomorrow. I’ll be taking it at the Hamptons location.  Hope I can find the admission ticket. They only let you print it out once, and I’d stored it safely away, I thought, but just remembered the day I lost my backpack on the train with my Schweser Secret Sauce in it and hoping I didn’t have that ticket in there too. The amount of material we have to cover is massive, even on areas where I think I have some expertise. One thing is for certain, arrogance will get a testtaker nowhere. I find that I have to review the most basic stuff as new material that I have not encountered before is in the curriculum. (Franchise P/E ratio anyone? Clean surplus for residual income?) Â
The Schweser instructor had some interesting comments in the final review weekend. He mentioned that many people want to get every question right, and sometimes, you just have to move on. No one has ever gotten a perfect score. Also, sometimes we just don’t have time to understand every underlying detail (I am guilty of this).  One of the instructors kept saying to just save that for the second week in June. I thought that was a good perspective.   We just need to make sure we can do well enough to safely pass, and there are no bonus points for a perfect score. That takes some stress off. Â
Even this close to the exam, I was struggling with a way to remember the difference between when you’d use the all-current method vs. the temporal method for translating the financial statements of a subsidiary operating in another country. Also, when you compute currency exposure, is it on the basis of net asset value (shareholder’s equity) or net monetary assets? It all depends on the functional currency, and that depends on whether the sub can be considered stand-alone or fully integrated with its parent. I kept getting this mixed up in the practice problems and finally found a way to remember that you use the all-current method for a stand-alone sub, and the exposure is the equity.
 The way I remember it is this: I love Quiznos subs. I go there a lot lately. So imagine a huge Quiznos Sub by itself in the middle of the Hudson River. The current is flowing all around it. Stand-alone sub, all-current! And, I know the exposure is equity since “equity” has QUI in it (Quiznos=Equity.) By the way, intense studying for the CFA makes you think ridiculous things like this, but if it works, no one need know how I remembered it.