Chartered Alternative Investment Analyst – CAIA® Exam Guide

Chartered Alternative Investment Analyst

Are you considering pursuing CAIA? Here are the reasons why the CAIA exam could be one if you are keen on learning Alternative InvestmentsLearning Alternative InvestmentsA financial asset that is different from the conventional investment categories such as stocks and cash is referred to as an alternative investment. Private equity, hedge funds, venture capital, real estate/commodities, and tangibles such as wine/art/stamps are all examples of alternative investments.read more.

  • The CAIA Association is an independent and non-profit organization with a commitment to train and acquire professionals in alternative investments since the year 2002.
  • The Chartered Alternative Investment Analyst that is the CAIA program, is an extremely deep level of knowledge and demonstrated expertise in alternative investments. This course is recognized globally as best in its class.
  • Risk managers, analysts, portfolio managers, traders, consultants, etc. can benefit from this program and become members of the CAIA Association.
  • This program gives you relevant industry knowledge as the course material is updated regularly.
  • This degree adheres to the professional and ethical standards of alternative investments and has more than 11,000 members across 100 countries.

The CAIA Association has gathered a good number of members in a short span for alternative investments. With the help of a two-tire examination, you can become a member of this association. Taking advantage of the knowledge, the expertise demonstrated, and alternative global credibility adds value to your profile and your knowledge. A few notes given below can help you make your decision.

CAIA® Exam

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The post covers the following;

  1. About CAIA® Exam
  2. CAIA Program Completion Criteria
  3. Why Pursue the CAIA Program?
  4. CAIA Exam Format
  5. CAIA Exam Weight
  6. CAIA Fee Structure
  7. Pass Percentage for CAIA Exam
  8. CAIA Exam Strategy

About CAIA® Exam

If you aspire to work in the finance industry, CFA® Chartered Alternative Investment Analyst (CAIA) is an option that you can consider. The alternative investment industry deals in the asset class and other investment options besides just the fixed income and the equity products. It includes products such as private equities, hedge funds, real estate, structured products, and also commodities.

CAIA® Program Completion Criteria

  • CFA® CAIA is divided into two levels; to become a part of the CAIA association, you need to get through both these levels.
  • Level I consists of 200 multiple choice questions, and it covers topics such as Professional Standards and Ethics, Introduction to Alternative Investments, Real Assets, Hedge Funds, Commodities, Private Equity, Structured Products, Risk Management and Portfolio Management.
  • Level II consists of 100 multiple choice questions along with 3 sets of essay type of questions that are also known as constructed response questions. This part is divided into two parts the 1st one is the main topic, the alternative investments, and the 2nd one is core and integrated topics. To have a deeper and better understanding of level II, the candidate must apply knowledge from level I examination.
  • Level II covers topics such as Professional Standards and Ethics, Private Equity, Real AssetsReal AssetsReal Assets are tangible assets that have an inherent value due to their physical attributes. These assets include metals, commodities, land, and factory, building, and infrastructure assets. read more, Commodities, Hedge Funds, and Managed Futures Strategy, Structured Products, Asset Allocation and Portfolio Management, Risk, and Risk Management, Manager Selection, Due Diligence, and Regulation.
  • Devote 200 and more hours of studies to clear this course for a better understanding and clearing.
  • The candidate needs more than 70% marks to clear both levels I and II of the CAIA examination. For 70% is set as the initial benchmark for clearing the level by the examiners.

Why Pursue the CAIA® Program?

If you like alternative investments (investments except for the regular equity and fixed income investmentsFixed Income InvestmentsFixed income investment is a type of investment in which the investor receives a fixed and relatively stable stream of income in the form of dividends or interest over a period of time. Companies and governments typically issue fixed investments in the form of debt securities.read more), then this is the course for you. Let’s see a few reasons why you should pursue the CAIA program.

  • CAIA provides deep knowledge and displayed expertise and credibility in alternative investments by professionals recognized globally as best in class.
  • Within a year that is after completion of two levels of examinations, you can be a member of the CAIA Association.
  • To update students or candidates and members regularly, the curriculum is updated regularly.
  • It is a complete self-study program with curriculum books, study guides, and preparation material created by the CAIA association alone. The course material is revised regularly based on the changes and developments in the industry, along with the latest academic research. These books and the study material are available to be purchased online.
  • If you really believe in alternative investments and you know you can ethically guide your customers through successful investment planning, then you must pursue the CFA® CAIA program to add value to your career and make the most of this course.
  • Go through the syllabus and the course structures you will understand that both the levels include ethical and professional conduct lessons.

CAIA® Exam Format

CAIA ExamCAIA Level I ExamCAIA Level II exam
Focuses on Professional Standards and Ethics, Introduction to Alternative Investments, Real Assets, Hedge Funds, Commodities, Private Equity, Structured Products, Risk Management and Portfolio ManagementProfessional Standards and Ethics, Private Equity, Real Assets, Commodities, Hedge FundsHedge FundsA hedge fund is an aggressively invested portfolio made through pooling of various investors and institutional investor’s fund. It supports various assets providing high returns in exchange for higher risk through multiple risk management and hedging techniques.read more, and Managed Futures, Structured Products, Asset Allocation and Portfolio Management, Risk and Risk Management, Manager Selection, Due Diligence, and Regulation
CAIA Exam Format Online examOnline exam
CAIA Pass percentage 70% as initial benchmarks70% as initial benchmarks
Duration Exam duration here is for 4 hours with an optional 30 min breakTwo hours for multiple-choice questions and 2 hours for constructed response questions.
CAIA Exam Dates The exam is held in March and SeptemberThe exam is held in March and September

CAIA® Level 1 Exam

  • In the Level, I examination the candidate is assumed to have an elementary and undergraduate understanding of basic concepts of quantitative analysis and traditional finance.
  • It focuses on Professional Standards and Ethics, Introduction to Alternative Investments, Real Assets, Hedge Funds, Commodities, Private Equity, Structured Products, Risk Management, and Portfolio Management.
  • This examination is an online examination; however, the results are not declared immediately. They are declared 3 weeks after the final examination date of the term.
  • The examiners have their initial benchmark set as 70% for this level examination of 4 hours.

CAIA® Level 2 Exam

CAIA® Exam Weight 

CAIA® Level I

Level I TopicExam weight (approximately)
Professional Standards and Ethics15-25%
Introduction to Alternative Investments20-28%
Real Assets (including Commodities)11-17%
Hedge Funds12-20%
Private Equity11-17%
Structured Products10-14%

CAIA® Level II

Level II TopicExam weight (approximately)
 Multiple ChoiceConstructed Response
Ethics, Regulation, and ESG0%10%
Models8-12%0-10%
Institutional Asset Owners and Investment Policies8-12%0-10%
Risk and Risk Management8-12%0-10%
Accessing Alternative Investments8-12%0-10%
Methods for Alternative Investing8-12%0-10%
Due Diligence and Selecting Strategies8-12%0-10%
Volatility and Complex Strategies8-12%0-10%
Current and Integrated Topics0%10%

CAIA® Fee Structure

CAIA fee structure is extremely simple, and we have got the information for you below. The table is self-explanatory.

CAIA Exam 2020 Fee Structure

Pass Percentage for CAIA Exam

CAIA Pass percentage

CAIA® Exam Strategy 

CAIA can be completed in one year’s time if you work around it correctly. The CFA® CAIA course has a more than 40% passing rate at the 1st attempt, which means you stand a high chance of becoming a member of CAIA within a year. As we said, you need to simply do it right. A few tips given below can help you achieve your aim.

  1. To start with, know what you are doing. Take up a course if it is worth it because the fee of the course and its examination fee is quite high. Only if you feel this course suits your requirement and is going to add value to your profile choose it.
  2. Now that you are sure about the course being apt for you to know the curriculum and the topics that the course will cover properly before you start. Knowing the course material well will help you plan further.
  3. Because this is a self-study program, you will have no guidance except for a study guide that is available for you online. Get this guide for your reference and study as per the guide.
  4. The study material is edited and updated regularly as per the latest industry trends and market changes in order to get the latest industry updates to the candidates. Study only from the material provided online. You can download and buy the material online as it is available on the website of CAIA.
  5. What is the examiner’s expectation, which means what the examiner expects from you and your answers? It is extremely important to understand the examiner’s point of view before you start studying.
  6. It is said that you must understand and not memorize what you study. Memorizing does not give you the knack of analyzing and thinking. Understanding helps you dig into the matter better. To understand the material instead of memorizing it.
  7. As kids, we always revised whatever we learned throughout the year. Of course, revision is very important. However, you must revise more than just once before the examination. The experts say that a dedicated 200 hours of study is important before appearing for this examination.
  8. Solve ample of model question papers. Model question papers or sample question papers are a very good trick of remembering what you learn. Model question papers consist of different questions and also tricky ones that will help you think better.
  9. Keep stress at a distance. As exams are too stressful, they can drain your energy out. Try to relax once in a while by practicing some meditation or relaxation exercises. Along with working hard for your examination, also concentrate on your health and make sure you are healthy enough before your exams.
  10. Sleep well to give your body and brain goo rest so that you can study well and also fair well in your examination.

This has been a guide to CAIA Exam. Here we discuss what the CAIA exam is, why you should pursue it, it’s fees, exam structure, passing rate, etc. You may also have a look at the following articles –

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