Overfitting occurs when the machine learns the input and output data too exactly, treats noise as true parameters, and identifies false or unsubstantiated patterns and relationships.
Overfitting is a common problem in machine learning when a model is trained to fit the training data too closely and therefore, it performs poorly on unseen data. This occurs when a model has too many parameters and is able to memorize the training data instead of generalizing to new data. As a result, the model has high accuracy on the training set but low accuracy on out-of-sample data set.
Overfitting can be prevented by complexity reduction, where a penalty value is imposed for every feature used by the model. This forces the model to only include features that reduce the out-of-sample error.
https://youtu.be/rDtrrmjvPWU
Welcome to PrepNuggets
Hey Future CFA Charterholder,
Many years ago, I was exactly where you are today—a CFA Level I candidate juggling a demanding full-time career with the daunting CFA curriculum. Coming from a Computer Engineering background, finance was entirely new territory for me. And yes, it was tough!
I struggled with dense textbooks, late-night cramming, and the frustration of concepts that seemed impossible after a long workday. But after passing Level I (barely), I realized something had to change.
Studying Smarter, Not Harder
Using the Pareto Principle (80/20 rule), I distilled the vast CFA syllabus into essential, easy-to-understand nuggets. I leaned into visual summaries and bite-sized learning sessions that worked around my busy schedule. This smarter approach helped me clear Levels II and III on my first attempts with significantly less stress.
Why PrepNuggets?
I founded PrepNuggets to share the streamlined strategies and innovative learning methods that transformed my CFA journey. Our mission is simple: leverage technology to make CFA prep more effective, accessible, and enjoyable.
Join the PrepNuggets community today—sign up for your free account, and let our thoughtfully crafted materials propel you toward CFA success without unnecessary overwhelm.
Here’s to your CFA journey!
Keith Tan, CFA
Founder & Chief Instructor, PrepNuggets
About the Author
PrepNuggets
Keith is the founder and chief instructor of PrepNuggets. He has a wide range of interests in all things related to tech, from web development to e-learning, gadgets to apps. Keith loves exploring different cultures and the untouched gems around the world. He currently lives in Singapore but frequently travels to share his knowledge and expertise with others.