CFA

CFA Level 2: How To Prepare & Pass CFA In 18 Months

Want to pass the CFA exam? Start preparing the right way.

CFA Level 2 is often cited as the most difficult CFA level to handle, although the debate rages on.

I somehow managed to pass Level 2 exam years go whilst working full time.

So here’s my CFA Level 2 study guide with some useful tips and insights for your CFA Level 2 preparation.

It answers frequently asked questions about the Level 2 exam, an example of my 4 month study plan, with specific CFA Level 2 tips that I hope you find useful.

Let’s check it out!

Contents
  1. CFA Level 2: a quick overview, plus some Q&A
  2. ​Here’s my CFA Level 2 study plan in 4 months & how to create yours
  3. CFA Level 2 tips, from my experience

CFA Level 2: a quick overview, plus some Q&A

CFA exams are computer-based, and held 3 times a year in May, August and November.

While similar to Level 1 in covering 10 broad topics of investment analysis and ethics, the real challenge in Level 2 is to be able to apply those knowledge more thoroughly and accurately under time pressure.

We need to understand what CFA Level 2 is about to beat it.

Let’s go through some common questions I’ve received from candidates recently (and my answers):

What is the CFA Level 2 exam format like?

CFA Level 2 format consists of vignettes (mini case studies or item sets) covering 88 multiple-choice questions in total. These are split into two 2 hour 15 minutes exam with 44 questions each.

On average, each vignette consists of 4-6 questions. Therefore, you should allocate 12-18 minutes per vignette depending on number of questions per vignette (3 minutes per question), which includes reading time as well.

There are 3 answer choices for each multiple choice question.

All the 10 Level 2 topics are tested in the both morning and afternoon exam sessions. ​

All questions are equally weighted and there are no penalties/negative marking for wrong answers.​

Although not tested as part of the exam, there is also a mandatory requirement to complete one Practical Skills Module (PSM) prior to results announcement. A PSM consists of a combination of videos, multiple-choice questions, guided practice, and case studies to develop candidates’ practical skills. It takes about 10-20 hours per module to complete.

How difficult is CFA Level 2 vs Level 1?

Having experienced all 3 Level of the CFA exams, Level 2 is certainly much harder compared to Level 1. I think it would be rare to find a charterholder that tells you otherwise!

Although both Level 1 and Level 2 have similar number of pages in the curriculum across the same 10 topics, the amount of depth and detail Level 2 goes into (and tested on) is significantly more. 

Candidates also have to get used to answering the vignettes (mini case studies) multiple choice questions introduced in Level 2. They need to know to answer vignettes efficiently when the vignettes itself can be up to 2 pages long.

That said, passing Level 2 is certainly an achievable goal, as long as you allocated more study time to it vs. Level 1, accompanied with a solid study plan and consistent practice.

What are Level 2 historical pass rates like?

The latest pass rates for CFA Level 2 is 59% (May 2024), with an average of 45% for 2014-2024.

For more details on CFA exam pass rates, check out these articles:
– CFA exam historical pass rates since 2010
– CFA exams in 2023: A beginner’s guide
– CFA passing score: our latest estimates

How much does CFA Level 2 cost?

The total exam fees for CFA Level 2 are US$940-1,250, depending on how early you register.
​
There are other optional additional fees to consider, such as physical copies of the CFA curriculum (if preferred), rescheduling fee and third party study materials.

For a full detailed breakdown of total cost, check out our CFA exam cost article.

What are the latest CFA Level 2 weights and topics?

The current CFA Level 2 topic weights are as follows: Ethics (10-15%​), Quantitative Methods (5-10%), Economics (5-10%), Financial Statement Analysis (10-15%), Corporate Finance (5-10%), Equity (10-15%), Fixed Income (10-15%), Derivatives (5-10%), Alternative Investments (5-10%) and Portfolio Management (10-15%).

​What is interesting about the CFA Level 2 topic weights is that it is actually possible for the 10 topics to be tested evenly at 10% weighting each, probably done as a move to discourage candidates from dropping topics.

For those considering using previous year’s books to study, it’s worth referring to the latest CFA curriculum changes article to check how much the curriculum has changed over the year.

How many hours do I need to study for CFA Level 2?

Based on CFA Institute’s June 2019 Candidate Survey, the average Level 2 candidate studied for 328 hours. However, based on our experience to increase chances of passing, studying for a minimum of 350 hours over 4-6 months is more common.

I would recommend having a look at the CFA Fast Track Plan as a guide (for students, working professionals and parents), then use our latest updated Free CFA Study Planner to customize your study plan to get going!

Can I self study Level 2?

Yes, it is definitely feasible. I self-studied for all 3 levels of my CFA exams, with a basic study notes package from Kaplan Schweser and tons of practice papers.

You’ll need to spend time with Level 2 to understand the materials and make time for practice tests.

Discipline is definitely an important factor for those who self study as Level 2 candidates need to do this very consistently to increase chances of passing.

Is there a maximum time gap between CFA Level 1 and Level 2?

Unlike FRM, the CFA program doesn’t impose any time limit between levels, nor impose any time limit to complete all 3 levels. I’ve even heard of one candidate having a 7 year gap between Level 1 and Level 2 due to life events – it is certainly helpful to have such flexibility.

However, candidates may lose momentum and motivation if they take a too long a break between exam levels.​

​Here’s my CFA Level 2 study plan in 4 months & how to create yours

Many years ago, back when CFA exams were still held only in Decembers and Junes, I thankfully found out that I passed my Level 1 December in January.

I registered for Level 2 right away, as well as purchasing the necessary study materials needed, as I didn’t use CFA curriculum as my main reference. Chop chop, only 4 months left till Level 2 June exams! 

So I passed my Level 2 exam with a crazy full time investment banking job in 4 months (18 weeks to be precise). Here are the details of my study plan, which you can easily use as a reference to tailor your study plan:

  • Target 350 hours study time for Level 2 preparation:​ With 18 weeks remaining, that implied nearly 20 hours a week of study hours. To make things worse, I had long hours during the work week in banking and simply didn’t have the focus to absorb anything after work. So I only could study on weekends, and made time for 10 hours per day on weekends to cover my required time. Of course, my case may be a little extreme, if you can dedicate 1-2 hours on weekdays, that could make things more manageable depending on your life commitments.
  • Do not skip topics: As mentioned in the FAQ above, the new topic weights for Level 2 mean that it is possible for all 10 topics to be tested equally. However, there are the ‘big 4’ topics that requires your attention: Ethics, FRA, Equity and Fixed Income.
  • Don’t read Ethics first: I didn’t start with Ethics, nor did it last, just in case I ran out of time. Instead I slotted it in between my studies in contrast with a heavier topic and just read through the topics in chronological order (see further below for details). Alternatively, feel free to follow the recommendations on best study order for Level 2 Topics.​
  • Save the last 4-6 weeks for practice exams & revision: Make sure you have covered the study material roughly once before attempting practice papers. Remember, don’t skip topics if you can help it.
  • Study the ‘easier’ and ‘tougher’ topics together: This helps motivation and absorption. For example, it would be unwise to study FRA, Equity and Fixed Income consecutively without slotting in ‘lighter’ topics like Economics, Ethics for a change of scenery.
  • Track your study and time progress: I’m not one for detailed study plans, but to ensure I don’t lose track of time, I have allocated 5 weeks out of my 18 weeks for practice and last minute revision. This means I have to cover 48 readings of Level 2 in 13 weeks, i.e. 4 readings per week (I like to round up to be conservative). Here’s a quick breakdown of my timetable to the CFA Level 2 exam, and what I targeted to achieve each month (you can customize yours with the new CFA exam cycle):
    • 4 months before exam – First half of the month is focused on Quantitative Methods and Economics, which are relatively ‘lighter’ topics. Second half of the month is allocated for FRA exclusively.
    • 3 months before exam –  First 1-1.5 weeks were for Corporate Finance, then 2-2.5 weeks for Equity, with the remaining time for Ethics.
    • 2 months before exam – First half of the month is for Fixed Income and Derivatives. Another week with the remaining time allocated for Alternative Investments and Portfolio Management.
    • 5 weeks before exam – I reserved the last 5 weeks for question practice and last minute material studies on areas that I needed more work on. It is these 5 weeks that I learnt the most, after I started to try out practice questions. Remember practice makes perfect, and I recommend trying at least 6 full papers timed in your overall studies to get the feel of the speed required for exam. I did 3-4 papers in this month, with scores and timing improving gently over the month (first one was an epic fail, as expected).
    • 5 days before exam – I took a 1 week holiday to fully focus on nailing the rest of your practice exams and rereading materials on weaker areas. I also woke up at 630/7am daily to mimic exam conditions whilst taking timed practice exams.

CFA Level 2 tips, from my experience

Unlike Level 1, CFA Level 2’s format is based entirely on item sets – i.e. “mini cases”. Each item set has a short vignette accompanied by up to 6 multiple-choice questions that relate to it. 

This slight tweak in format requires an updated approach. In addition to my Level 1 guide and the 10 key CFA Level 2 tips, here are 7 ways to cope with Level 2 that I found extremely useful:  

  • Balance breadth vs. depth – Level 2’s materials are vast and more intense, in the sense that there are more calculations-based questions which require application of a concept. On the flip side, this will work in your favour if you focus your energy in grasping key concepts, and test your understanding with practice questions in that topic. Set a fixed time to do this for each concept, and move on to the next one once time is up as there are lots to cover. You need to make sure you’ve at least understood 70% of all the materials, rather than 100% of half the syllabus.
  • Make summary notes –  While studying for each concept, I summarized my learnings for that concept on paper as well. Do this especially for topics that you find difficulty understanding. It aids memory and you’d be thankful for concise revision notes nearer to the exams.
  • Save time by skimming questions first –  With item sets, a technique that works well in the exam is to have a quick read of the questions in a vignette first. That way, you can then proceed to read the vignette with more purpose and focus in searching for the answer. I found that this significantly reduced the back-and-forth checking between vignette and questions –  a super time-saver.
  • Emphasise keywords – Done in conjunction with the point above, always highlight keywords in your reading of questions and vignettes. With more to read in this Level, you can spot and remind yourself of tricky wordings used and minimize costly mistakes. Some examples include “except”, “is not”, “most/least likely”, “closest to” etc.
  • Time management – It may seem more relaxing now that there are only 10-15 vignettes with 4-6 questions per vignette in each paper, but believe me the pressure is the same! You don’t really have 3 minutes per question, as you need to take into account timing to read the vignette, and they are on average 1-2 pages long. So allot yourself a maximum of 18 minutes per item set, and when time’s up, shoot and go.
  • Take the last 1-2 weeks off work – It’s key for all levels to take a week off prior to the exam for last minute drilling. However, this time I added on an additional week of personal holidays for an extra boost. You will learn loads in a short space of time doing practice questions, reading your summarized notes and reviewing formulae. Get additional materials if you find yourself idle. Now is the time to really work for it and not regret.
  • Plan your celebration – The most fun tip of all. You need to set up a plan to celebrate after your exams, right now. Whether it’s a party, nice dinner out, or bungee jumping, it is important to have something to look forward to on days where motivation is lacking. The more outrageous and fun, the better.  For me, my vice was having a couch potato evening (yes, wild, I know) with junk food dinner. It became a post CFA exam tradition for me ever since.

Long story short, that was my Level 2 experience and some recommended strategies to pass it. Hope you guys found these useful, don’t forget to leave a comment below!
​
Meanwhile, you may find my Level 1 and 3 experiences below, along with some other useful articles:

Sophie Macon

View Comments

  • Hi Sophie. Great article! So I just had my L2 exam and I am not feeling too great about it. I found the difference btw L1 and L2 to be huge and I may have to give it a second go in Nov. Any advise on how I should reapproach it?

  • Hi Sophie,

    Will the exam format for CFA Level2 May 2021 cover 10 Level 2 topics in the both morning and afternoon exam sessions? I heard CFA Level1 February 2021 was splitting topics into AM and PM. I was wondering whether the new CBT 2021 for CFA Level2 still keeps the same format. Thanks.

  • Hi all, I just passed the December 2018 level 1 exam at first attempt with the following strategy - used 250 hours from early September to day before the exam: Step 1 - September - read all Schweser notes and do concept checkers - 100 hours Step 2 - October - Schweser Qbank - 75 hours Step 3 - November - Secret sauce - read through - 20 hours - Schweser practice exams - 20 hours - Qbank and formula repition - 35 hours In total I did around 2000 Qbank questions. I am thinking about this strategy for Level 2: Step 1 - Feb/March - 100 hours Read all Schweser notes and do concept checkers Step 2 - April Qbank - 100 hours Step 3 - May Qbank, Practice exams (6x) and formula memorizing - 100 hours My qbank strategy is that I always try to solve the problem myself, or with the books, before looking at the answer. If I anyway dont get the answer - I really try to understand it using the books, before moving on to next question. Do you think this strategy (that worked for L1) also works for L2? Regards Rick

    • Hi Rick, Congrats on the recent pass and sharing your thoughts with the 300 Hours community. For a better discussion and feedback amongst members, may I suggest you set this as a new topic in our forum? Will be there to chip in with my thoughts on this too!

  • Hi Sophie, It's great to read your post now right before my registration of Level 2. As i never put too much hope on clearing my level 1, it's a difficult decision on whether to commit on Level 2 right now as i believe I'll have to sacrifice much on other personal / working related decision. As i have merely 4 months more to go, would need your advise that if after-all I can commit around 16 - 22 hours per week ( i would commit more than that if i'm able to) , should i committed to Level 2 exam this coming June? I definitely would not think that forfeited this chance and rather wait for another year is a good choice but i'm not confidence if i can conquer level 2 with 4 months...Could you provide some suggestion on this? I appreciate much on this..Thanks!

    • Hi Hami Ko, Well you did clear Level 1, so congratulations! I hope that is a big boost to your confidence, only 2 more to go! If you can commit 16-22 hours a week it's sufficient. Using an average of 18 hours study time a week, starting Feb to give you 4 whole months (that's 17 weeks), you'd have clocked 306 hours, more than the average candidate. So in terms of time, you'd have enough time for June Level II straightaway. Taking the CFA is a sacrifice of course - but also an investment. Since you are committed to finish this exam to gain your 'return on investment', delaying it for a year (when you are able to dedicate sufficient study time) is just lowering your return on investment, and prolonging the pain of these exams. All in all, I'd say go for it this coming June! It may seem daunting as the time is short, but there is not better time to start than NOW. The 300 Hours community are here to support each other through this tough period, so join us at the Q&A board section if you have more questions.

  • Hi Sophie Just cleared L1 and have registered for L2 today. I am working 6 days a week, so I'm short on time. It would be extremely helpful if you could guide me about which subjects to study from Schweser and which subjects from the institute material. Also whats your opinion on studying from videos vs studying from text. Cheers

    • Hi SJ, Congrats on the recent pass! As mentioned in my posts, I used external reference materials only (Schweser was available only in my time) as I was short on time too. I studied everything in there, and did 6 sets of practice questions, and all questions at the end of the chapters. Of course, the CFA mock exam papers as well. Studying from videos vs. text depends on your personal study style. Only you know which medium works better for your understanding/grasp of materials. For me it was text as I'm not really a classroom person, but it would vary from person to person. Experiment for yourself and see which is more productive for you. Hope this helps!

  • Hi Sophie, I read your this article too, quite interesting one. One thing noted, if i didnt attempt my level 2 in this June and waited till next june & if i dont clear would be a dicy and low on morale. So thinking to register for this june itself and give it a shot at the exam. Please wish me luck, i think you are my lucky mascot. Last article on Level one i posted and you wished & i cleared. So i hope at this one too the winning streak continues. tc

    • Hey Ritz! I had the same thought of postponing Level II at that time, but then realised it was all procrastination and excuses. I wanted in fact to "get it over with" ASAP, and since Level I should be fresher in my mind, I just went with it. It's gonna be tough, but do give it a shot for this June if you can. You are totally capable of clearing it in 18 months too with some hard work! Not trying = no chance :) By the way, we also testing a new forum for readers under "Ask a Question" section. This is where you can share your Level I experience with others, ask questions, or discuss topics with the 300 Hours community. Check it out!

  • Hi Sophie, Thanks for your insight! It's nice to read/hear about others that have done what you are planning on doing. Jan 22 can't come fast enough. Ryan

    • Hi Ryan, How did it go? I have my big fingers crossed for you and hope it's good news! Sophie

  • Hi Jared, First off, try not to feel anxious, you did your best and it should reflect your hard work. Try to enjoy your well-deserved time off to maintain stamina for the next Level (especially), as mentioned in my post above. I used Schweser text all the way back then as others didn't have full study notes at that time. I only used Schweser notes, Schweser's end of chapter questions, CFA mock and 6 sets of Schweser's practice exams for my Level II prep. I didn't have much time then with a full time hectic role and studied full time on weekends only (too tired on weekdays). It was sufficient coverage for me as I found the notes concise and to the point, with chapter questions and practice exams highlighting my weak areas for me to note down for further revision. Hope this helps Jared and do let me know how it went for you. Meanwhile, enjoy the holidays! Sophie

  • Hi Sophie, I wrote the level 1 exam on Dec 1, anxiously awaiting my results. I used CFAI texts and Schweser Qbank only for level 1 (plus mocks). I was thinking of going with Schweser texts and Qbank for level 2, assuming I pass. Plan to only do CFAI text blue-box and EOC questions. Since you mentioned buying the Schweser texts in your Level 1 experience article, I was wondering if you stuck with Schweser for Level 2 as well, and what your experience was. Thanks.

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Sophie Macon

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