Level 1 Topic Order • Level 2 Topic Order • Level 3 Topic Order
There are 45 Learning Modules in CFA Level 2’s 2025 curriculum across 10 topics. But should you study the topics chronologically? Or is there an optimal CFA Level 2 study order?
We often get these questions in the 300Hours forum (which, by the way, you can join for free CFA advice).
There’s no right or wrong answer here. Studying the topics chronologically as outlined in the curriculum is fine too.
However, we thought there may be something better to improve your odds of success, given the amount of materials to go through in this level.
This article outlines our view on the optimal sequence of topics to study (and why) for CFA Level 2’s 2025 curriculum which should help your CFA Level 2 study plan.
Let’s go!
For CFA Level 2, the flow of topics is arranged as:
The good news is, CFA Institute has confirmed that the design of the readings in each study topic do not assume that the candidate approaches the study sessions in any particular order.
CFA Level 2 can often be viewed as the toughest amongst the 3 levels, simply because:
With these in mind, we have developed our own study plan to ensure candidates have sufficient time to master the difficult and high-weighted topics, and benefit from the linkages between certain topics.
Here’s our thought process and strategy for the optimal CFA Level 2 study order:
In short, this led me to the following suggested CFA Level 2 study order for 2025’s curriculum (LM references as per our free CFA study planner):
CFA Level 2 Topic Study Order | 2025’s Curriculum (45 Learning Modules in total) |
---|---|
1) Financial Statement Analysis (FSA) | Topic 3: LM 10-15 |
2) Fixed Income | Topic 6: LM 26-30 |
3) Quantitative Methods | Topic 1: LM 1-7 |
4) Equity | Topic 5: LM 20-25 |
5) Portfolio Management | Topic 9: LM 37-42 |
6) Derivatives | Topic 7: LM 31-32 |
7) Alternative Investments | Topic 8: LM 33-36 |
8) Corporate Issuers | Topic 4: LM 16-19 |
9) Economics | Topic 2: LM 8-9 |
10) Ethics | Topic 10: LM 43-45 |
This is a highly-weighted topic area and for those candidates that are not trained in accounting, it is usually one of the most difficult.
For these reasons we believe it is imperative this is the first topic studied. The focus at Level 2 is much narrower than at Level 1.
The exam primarily focuses on a small range of topics but candidates are required to know these topics in detail.
One of the hardest of these topics is the accounting treatment for pension liabilities. Given the depth required and the technical difficulty, you need to allow plenty of time in order to master this area.
There is considerable overlap between Levels 1 and 2 here, with the main focus of the readings being the valuation of bonds.
It starts with simple bonds and gradually builds up to valuing bonds with embedded options. This latter group requires you to master the binomial tree approach to valuation.
The binomial tree approach is also included within the Derivative Investments study session and so it is important you master this topic within Fixed Income before you tackle Derivatives.
Although not a particularly highly weighted exam topic (5-10%) this area does contain technically difficult aspects of regression and time series analysis.
Elements from this study session are need to fully appreciate certain aspects of the Equity readings and also the Portfolio Management readings.
This is the largest topic area, both in terms of exam weighting (10-15%) and content.
A key element is the valuation of stocks using both discounted dividends and also free cash flow.
The latter requires you to be confident using the “Indirect method” for deriving cash flow from operations. This builds on your Level 1 knowledge and to a certain extent the Level 2 FSA knowledge.
As noted above, it is important to have studied the Multiple Regression reading within Quantitative Methods to appreciate elements of the Portfolio Concepts reading. For this reason we suggest studying this topic shortly after the completion of Quantitative Methods.
Part of this topic builds on from Level 1, such as the Markowitz Minimum Variance model (often known as the efficient frontier model) and the calculation of portfolio risk using two and also three assets.
This familiarity helps you get into this topic, making the jump from CFA Level 1 to Level 2 more manageable. This area represents 5-15% of the exam.
This area breaks down into three main areas: Forwards and Futures; Options; and finally Swaps.
Throughout, the focus is on understanding the pricing and valuing of these derivatives. The option readings, as noted above, include the Binomial Tree model which is also covered within Fixed Income.
In our opinion, the Fixed Income readings cover this aspect in a clearer and more thorough manner which is why we recommend studying Fixed Income before Derivatives.
This topic area accounts for 5-10% of the exam and is likely to be one of the most technically challenging areas of the Level 2 curriculum – you’ve been warned!
Focus on identifying the “low-hanging fruit” and you should stand a good chance of scoring reasonably well here.
This topic is often overlooked and yet it has the same exam weighting as most of the other topics (5-10%) and the content is not that technical.
The main focus here is understanding the valuation of real estate and analyzing the performance of private equity funds.
Builds on from Level 1 in the areas of Capital Budgeting (NPV and IRR) and also a new topic of Corporate Restructuring.
There are other readings that were not addressed in the Level 1 curriculum but these tend to be relatively accessible for most candidates.
This means you ought to be able to cover this 5-10% topic relatively quickly.
The main focus here is on foreign exchange rates and the various economic theories that purport to explain movements in foreign exchange rates.
There is overlap here with Level 1 which will help you cover this study session.
This topic accounts for 5-10% of the exam.
There are two very different approaches used by candidates to tackle Ethics (10-15%).
Most of Ethics at Level 2 is exactly the same as Level 1 except there is no coverage of the GIPS and there is an additional reading covering Research Objectivity Standards.
Remember, for candidates that are deemed to be marginal, CFA Institute will refer to the candidate score on Ethics, so it is imperative this topic is given the priority it deserves.
If you have any questions about the CFA Level 2 study order, just post a comment below!
P.S – these resources may be helpful:
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View Comments
Level 1 has cheat sheets for all the subjects. Do you guys have that for level 2?
I was referring to the 2022 exam version of this page. Please let me know where I can find that list. Quite urgent please
Hi Aimaan, same as 2023's recommended order since there are overall minor changes between 2022 and 2023.
I'm looking for this Study Order article but for Level III. Does that exist?
Hey Zach, yes our Level 3 study order will be out next week. Meanwhile, don't start with Ethics/GIPS, leave that last!