4 Reasons Why I Think the CFA Level II Exam is the Hardest One, and How You Can Prepare

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By Zee

Mirror mirror on the wall, which is the hardest CFA Level of them all?

While opinions differ among us, I think quite a lot of charterholders (if not the majority) believe that Level II is the most challenging CFA Level among all three. I certainly agree. Level II is where many CFA candidates fall the most, and with good reason. And in this article, I’ll address four important points why Level II is so challenging to pass. 

Read on, and you’ll be well prepared compared to the rest of the other first-timers!

Many candidates assume the same routine that worked for them in Level I, not knowing they need to double their efforts

Level II in the CFA program isn’t like Year 2 in university. Simply put, the same approach, routine, or degree of effort that got you through Level I is not going to be enough. I made that mistake in Level II myself and paid the price.

Candidates get thrown off by the fact that Level II has half the questions of Level I, but in fact it can be even more of a time rush

In Level I, all questions are independent of each other, and are often a lot shorter and more direct compared to Level II and III. In Level II, each of the two exam sessions are comprised of ten vignettes, which is a passage describing a certain scenario, followed by six questions about that scenario. 

Vignette-style questions are significantly more time consuming than Level I style questions. Before answering a single question, candidates have to read a passage often longer than a full page, understanding the scenario and digesting important points. When answering questions, you often have to refer back to the passage and reread certain areas. This takes up and incredible amount of time that can only be countered by practice.

Candidates can sometimes make the mistake of thinking Level II will be easier from a time management perspective. Due to the vignette format, this isn’t true, and for some candidates it can be even more of a time challenge.

Vignette questions are a lot more challenging than Level I independent questions

Because of the vignette format, Level II questions go into a lot more detail than Level I. Exam writers now have a full page (and then some) to explain their scenario, and the questions therefore can test multiple concepts and require a lot more thinking or calculation.

Having less questions (and even less vignettes) also makes the exam less ‘topic diverse’. What I mean by that is that one vignette can concentrate heavily on a certain topic, and if a candidate is caught out, they stand to lose up to 6 questions worth of points (i.e. 5% of the total exam score). This makes ditching topics a lot more risky compared to Level I.

Knowing which key topics to focus on is more important than ever in Level II

I personally found Level II to contain a lot more material than Level I, focusing a lot on Financial Reporting and Analysis. In fact, we know from CFA Exam Insights that about 60% of the exam focuses on just 4 topics: Corporate Finance, Equity Investments, Ethics and FRA. The material contained within these heavyweight topics is a lot, and if candidates aren’t aware of which are key, they can mismanage their study time by spending too little effort on the key topics.

Remember you can get even more tips on how to approach all 3 CFA Levels by getting our CFA Exam Insights book, available online, or in physical copy through Amazon.

Over to you

If you’re taking the CFA Level II this year, keep in mind the above points and you’ll avoid the pitfalls that threaten all other first-time Level II candidates. Good luck, and if you have any thoughts or questions just drop them in the comments below!


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