From 2022 FRM Part I is offered 3 times per year while Part II is offered 2 times. Both parts are organized as CBT – computer based tests. You can register for the upcoming FRM exam here. Please follow our blog for regular updates on FRM exam 2023 deadlines.
Depending on when you enroll, the total cost can vary. For that reason, it is beneficial to enroll well in advance to get a discount. To demonstrate, the financial benefits associated with early registrations we have prepared a detailed comparison of What is the cost of financial certification programs.
FRM exam 2023 deadlines
Part I
May 2023
06 – 19 May 2023– EXAM DATE
01 December 2022 – Open for registration and schedule an exam
01 February 2023 – Registration deadline
November 2022
5-18 November 2022– EXAM DATE
01 May 2022 – Open for registration and schedule an exam
31 July 2022– Early registration deadline
30 September 2022– Registration deadline
21 October 2022 – Exam schedule deadline
Part II
May 2023
20 – 26 May 2023– EXAM DATE
01 December 2022 – Open for registration and schedule an exam
01 February 2023 – Registration deadline
November 2022
19-25 November 2022– EXAM DATE
01 May 2022– Open for registration and schedule an exam
In the following post, we`ll present this concepts in a form of study note as a part of preparation for CFA Level 1 exam. The demand and supply analysis is part of CFA Curriculum. It can be found in Reading 8 as part of the topic no. 2 called Economics. You can find the complete CFA Curriculum by following this link.
CFA Level I is offered 4 times per year while Level II & Level III exams are offered 2 times per year. You can register for the upcoming CFA exam here. You can find all the important information regarding CFA exams deadlines 2022 – 2023 in our blog and by following us on social media.
The law of supply and demand is one of the key concepts in economics, or more precisely microeconomics. While economics is the study of production, distribution, and consumption, microeconomics focus on behavior of individual market participants and their decision making regarding the allocation of scarce resources.
DEMAND
Demandis an economic principle describing consumers’ willingness and ability to purchase certain quantity of goods at various prices. Relationship between quantity and price is known as the law of demand. It is inverse relationship described by demand curve: as price increase, consumers demand less of a good or service.
Main factors influencing the quantity demanded, apart from price, are income and prices of related products. Elasticity is the measure of change in quantity demanded as a result of percentage change in one of these main factors. Therefore, we can distinguish:
PRICE ELASTICITY
Price elasticity – with the change in price, demand moves along the demand curve. There are also two extreme cases. First where quantity demanded is very responsive (perfectly elastic demand) or not responsive at all (perfectly inelastic demand).
INCOME ELASTICITY
Income elasticity – with the change in income demand curve shifts inward or outwards. There are several factors that can influence the shift in demand and they can be remembered by acronym B.I.T.E.R.(Buyers, Income, Tastes and preferences, Expectations, Related goods).
Normal goods have positive income elasticity, meaning that increase in income leads to an increase in quantity demanded. For inferior goods, opposite is true, meaning that increase in income actually leads to a decrease in quantity demanded. Most common examples are junk food, public transport, cheap clothes, supermarket own brand goods etc. This is determined by consumer behavior. With higher income, some consumers will shift to more expensive products because of higher quality, socio-economic status, extra features of products etc.
CROSS PRICE ELASTICITY
Cross price elasticity tries to identify relations between goods. Substitute goods may be used instead of another good. It means that increase in price of one good will lead to decrease in quantity demanded of that good and eventually increase the demand for substitute good. For example if price of apple juice increases, consumers can easily substituted it by orange juice. Same case is for cigarettes and e-cigarettes, tea and coffee, butter and margarine etc.
Complementary goods, on the other hand, are goods that are used or consumed jointly with another product. Therefore, if price of one good increases and quantity decreases, this will also lead to decrease in demand of complementary good.
For example, cars and petrol are complementary goods. If price of one goes up, the demand for both the goods will fall. Other examples are printers and ink cartridges, computer hardware and software, gaming consoles and video games etc.
INCOME EFFECT
When faced with a budget constraint, optimal choice that maximizes consumer`s utility is when an indifference curve is tangential to the budget line. Budget line consists of all bundles that are affordable at given prices and income.
Figure shows several indifference curves for consumers. Obviously, I1 is preferred to I0 and I2 is preferred to I1 but this is not affordable due to budget constraint. Therefore, if consumer behave rationally, most preferred affordable combination is achieved at point E(tangent point between indifference curve and budget line). Optimum quantities of Good A and Good B are achieved showing us how much of each good will be demanded by consumer.
SUBSTITUTION EFFECT
Now let`s assume a change in price of Good B. If price decreases, demand for Good B will increase and as a result, Good A is now relatively more expensive in terms of Good B and Good B is now relatively less expensive in terms of Good B. Change in consumption such that the consumer’s level of utility does not change is measured by the substitution effect. It is therefore shown as a movement along the same indifference curve and results in a change in consumption from Q0 to Q1. Due to the price decrease of Good B there is a part of income left over and consumers will typically respond by buying more of the cheaper product. This is called income effect.
This is valid when Good A and B are normal goods. However, income effect can also decrease in case of inferior or Giffen goods and cause following total effects:
Special case are Veblen goods where higher price could actually lead to higher demand and upward slopping demand curve. Some examples of Veblen goods are designer handbags, jewelry, luxury cars etc.
Presented by graph, income effect in case of inferior effect would lead to decrease in demand but this effect is weaker then substitution effect:
quantity demanded of Good B will decrease. Good with such a properties are called Giffen goods. It should be noted that every Giffen good is an inferior good but every inferior good is not necessarily a Giffen good. Graphically, this case can be presented as:
PREPARATION FOR CFA
After finishing the Reading, CFA candidates should master the following Learning outcomes:
Learning outcomes
a) calculate and interpret price, income, and cross-price elasticities of demand and describe factors that affect each measure;
b) compare substitution and income effects;
d) describe the phenomenon of diminishing marginal returns;
e) determine and interpret breakeven and shutdown points of production;
f) describe how economies of scale and diseconomies of scale affect costs
It is advisable to start learning as early as possible and devote enough time before sitting the Level I exam. As part of the preparation for CFA exam, candidates should practice by using real life questions. For that reason, we have prepared for you the most comprehensive question base available with more than 6,000 question. These questions are structured in exams in multiple ways. From topic-based, reading-based to real exam-like mock exams. Check our offer here Examary.com
We have already written about Top 5 certification programs in finances such as CFA, FRM, CPA, CAIA, CFA etc. In the following chapters, we bring you quick guide of the costs of financial certification programs.
Chartered Financial Analyst (CFA)
Let`s start with the most known, globally-recognized designation – Chartered Financial Analyst (CFA),
First, to enroll to CFA program, one-time enrollment fee needs to be paid. For many years, it was set at USD 450, but from 2023, CFA Institute decided to lower the price to USD 350. On the other hand, prices of individual exam registrations will increase. From USD 700 to USD 900 for early registration and from USD 1,000 to USD 1,200 for standard registration. There is no difference in price of Level I, II and III exams. Therefore, the minimum cost to complete the program is currently USD 2,950 but will increase to USD 3,050 in 2023 – assuming that you pass all three exams from first try and that you always register well in advance catching the early registration discount. In case you fail to pass the exam from first try, returning candidate pays the full price of exam.
After successfully passing exams, and in order to become a member (either regular of affiliated one), there is additional annual cost of USD 275.
Second on our list is, Financial Risk Manager (FRM), organized by GARP.
Similar to CFA, there is one-time enrollment fee of USD 400. FRM certification process for risk managers is divided in Part I and Part II. Early registration fee is USD 600 for each exam while standard fee is USD 800. Prices are the same for returning candidates. For most successful candidates who pass both exams from first attempt and register early, minimum cost of FRM certification is USD 2000.
Once passing the exams, access to GAARP Membership is offered at rate of USD 195 annually. Find more information about the deadlines to apply for FRM exam in 2023 here.
Chartered Alternative Investment Analyst (CAIA)
is next on our list. With USD 400 program enrollment fee, it is very similar to previous two certification programs. However, its exam fees are slightly more expensive, ranging between USD 1,150 for early registration and USD 1,250 for standard registration. And the price is the same for both of the two exams. Good news is that candidates who fail can retake the exam at reduced price of USD 450. The minimum cost of gaining the CAIA charter is USD 2,700. Furthermore, membership in the CAIA Association cost USD 350 for one year or USD 650 for two years. More info about the deadlines to apply find here.
Certified Management Accountant, or CMA
Next on our list is the certification program with long tradition, being around for more than 50 years and with global recognition. Although, the cheapest on our list, Certified Management Accountant, or CMA is certainly not less valued. Program makes distinction between Professional Members and Student/Academic Members. Nonrefundable entrance fee of USD 280 is charged to Professional Members for enrolling to the program. For Student/Academic Members, enrollment fee is slightly cheaper costing USD 210. In addition, IMA membership is also required. The price to join IMA® (Institute of Management Accountants), worldwide association of accountants and financial professionals in business, is between USD 45 for Student Membership up to USD 275 for Professional Membership. Afterwards, enrollment to each of the two exams cost additional USD 460 per part for Professional Members or USD 345 per part for Student/Academic Members.
To sum up, the total cost of CMA certification for Professional Members is USD 1,475 while for Student Members it is only USD 945. Follow our blog to keep informed about the CMA exam deadlines in 2023.
Certified Financial Planner
Last but not the least on our list is CFP, or Certified Financial Planner. Early bird rate to enroll to an exam is USD 825, standard rate is USD 925 while late registration costs USD 1,025. There is no enrollment fee but there are special education requirements before candidate can register for the exam. This includes completing coursework on financial planning through a CFP Board Registered Program and holding a bachelor’s degree or higher (in any discipline) from an accredited college or university. If a candidate already holds CFA, CPA or similar certification, this requirement can be bypassed.
Final word
As we`ve seen the costs of financial certification programs can vary significantly. And there is no one fit all rule. Each person interested in pursuing its career in financial industry should try to choose for him/herself the best option.
If you decided to pursue in one of the programs mentioned above, here are the links for starting the application process:
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