CFA Level 2

Written by: Nik Ventouris

Last updated:

CFA Level 2

The Chartered Financial Analyst (CFA) designation is a prestigious global certification provided by the CFA Institute for finance professionals worldwide. Earning this title can go a long way in enhancing your career prospects and setting you apart in the competitive field of finance.

The second step of this journey involves passing the Level 2 exam, which is a prerequisite for passing the third and final level of the CFA program.

This guide focuses on the CFA Level 2 exam in order to provide you with an in-depth look at its layout and impart useful tips and techniques to help during your preparation.

CFA Level 2 Exam Structure

The CFA Level 2 exam is a challenging test of your understanding and ability to apply different investment methodologies and principles.

In the Level 2 test, you’ll face 88 multiple-choice questions, organized into 22 sets of vignettes. Each of the exam’s two sessions spans roughly 2 hours and 12 minutes, with an optional short break in between to let you catch your breath and recenter your concentration.

First Session

The exam’s first session contains 44 questions, with a focus on the following topics:

  • Ethical and Professional Standards
  • Quantitative Methods
  • Economics
  • Financial Statement Analysis

These subjects evaluate your grasp of fundamental investment ethics and your capacity to scrutinize and make sense of all relevant information.

Second Session

The exam’s second session is also composed of 44 questions. However, its questions usually explore subjects with a more complicated nature, such as:

  • Corporate issuers
  • Equity Investments
  • Fixed Income
  • Derivatives
  • Alternative Investments
  • Portfolio Management and Wealth Planning

These topics have been carefully selected to evaluate your knowledge of different asset classes and skill at effectively crafting investment portfolios.

Time management is key to success in the CFA Level 2 exam. As a rule of thumb, it’s generally a good idea to spend around 90 seconds on each question to ensure you have enough time to answer them all.


For all of your CFA Level 2 exam needs, StateRequirement recommends Kaplan’s preparation materials. 

4.7 out of 5 starsKaplan Schweser

Multiple-Choice Exam Question Format

The Level II exam consists of 11 item sets per session, with a total of 22 across the entire exam. Out of these, 20 are evaluated, and 2 are experimental questions that won’t count towards the score.

Unlike the free-standing questions in the CFA Level I exam, the Level II’s multiple-choice questions require you to refer to a specific vignette to answer each item within that set. The information in the vignette will be essential to respond to the corresponding questions accurately.

The topic areas from the CFA® Program curriculum for Level II will be distributed randomly throughout the test, appearing in either the first or second sessions, or possibly both. The vignette for each item set will kick off with a declaration of the subject and the total points that can be earned.

Interested in having a more in-depth look at the format? Have a look at our CFA Level 2 Mock Exam article.

Exam Topics

The Level 2 CFA exam covers ten key areas. We have provided a breakdown of these below:

Session 1

  • Ethical and Professional Standards (10-15%): This section lays the groundwork for ethical behavior and professional standards that are fundamental in the finance profession
  • Quantitative Methods (5-10%): Quantitative methods provide candidates with the tools for analyzing and interpreting financial data so that they are able to make informed investment decisions
  • Economics (5-10%): This section of the CFA’s curriculum covers the main principles that govern markets and economies and the impacts of these factors on investment decisions in real-life scenarios
  • Financial Statement Analysis (10-15%): This section focuses on the principles used to assess a company’s financial health by analyzing income statements, balance sheets, and cash flow statements

Session 2

  • Corporate Issuers (5-10%): This topic delves into how corporations operate and make financial decisions by examining business strategies, risk management, and corporate actions, combinations, and restructuring
  • Equity Investments (10-15%): Focuses on how to effectively evaluate and manage equity investments with an understanding of portfolio management and equity market valuation.
  • Fixed Income (10-15%): This section will help candidates understand the characteristics, valuation, and management of fixed income securities (i.e. bonds)
  • Derivatives (5-10%): This topic delves into the purposes of derivatives in portfolio management (such as hedging and generating returns) through real-life case studies
  • Alternative Investments (5-10%): Covers a variety of non-traditional investment options (e.g., real estate, private capital, and hedge funds) as well as their role in within a diversified portfolio
  • Portfolio Management and Wealth Planning (10-15%): Candidates should learn how to construct and manage investment portfolios to meet specific objectives while bearing in mind an individual’s or family’s needs

Some introductory financial concepts and essential building blocks for later learnings, such as the time-value of money, basic statistics, microeconomics, and introduction to company accounts, have been moved to the pre-read section.

This measure is designed to provide more exam time for advanced practice concepts and practical skills modules. However, candidates can access this pre-read material at no additional charge to fill knowledge gaps and assess their readiness for the Program.

Interested in getting started? We recommend Kaplan’s CFA level 2 learning materials and study resources.

4.7 out of 5 starsKaplan Schweser

Alternatively, you can have a look at our CFA Level 2 Notes article.

How to Prepare for Your CFA Level 2 Exam

Successfully passing the CFA Level 2 exam will require you to have a solid grip on a variety of diverse and intricate subjects.

We suggest incorporating some of the following tools into your study regimen in order to improve your chances of acing your CFA level 2 exam on your first attempt:

  • CFA Program Curriculum: A great starting point for your studies, this comprehensive guide outlines all the testable areas, helping you nail down the fundamental concepts and ensuring you cover everything you need to know
  • CFA Institute Learning Ecosystem (LES): As part of the CFA Institute’s digital offerings, the LES offers you many valuable study tools, such as adjustable study plans, practice questions, and mock exams to replicate the atmosphere of the real test
  • CFA Program Approved Prep Providers: To enhance your study materials, it’s worth thinking about investing in a course or study package from an approved provider. These often include in-depth study guides, video tutorials, and additional practice questions — all of which give you an extra edge to pass on your first try

Beyond these resources, you can further bolster your chances of success by:

  • Drafting a Study Plan: Designing a study timeline that assigns sufficient time to each section is pivotal. Bear in mind, candidates who passed on their first attempt typically reported over 300 hours of study per CFA Exam level
  • Participating in Study Groups: Never overlook the value of group learning. Study groups foster engaging dialogues, clear up confusion, and present different angles on various topics
  • Utilizing Mock Exams: Make use of at least one mock exam to assess where you stand. They not only acquaint you with the exam’s layout but sharpen your time-management abilities and pinpoint where you need to focus more

Armed with the right materials and a well-thought-out approach, you can tread the path to the CFA Level 2 exam with greater assurance and less stress.

Is the CFA Level 2 Exam Right for You?

Navigating the world of finance and investment credentials can undoubtedly be daunting.

Taking the CFA level 2 exam demands considerable commitment, both in terms of time and effort; having said that, it’s a significant stride towards the covered CFA Charter, and can go a long way in ensuring that you stand out in the world of finance.

All in all, we recommend considering your time-availability, career aspirations, and budget before deciding whether this eminent designation is the right choice for you.

If you decide to move forward with the CFA program, make sure to hold your ambitions high, adhere to your study plan, and stay dedicated.

Good luck with your CFA journey!

CFA Level 2 FAQ

Is CFA Level 2 the hardest?

The difficulty of the CFA Level II exam is often considered higher than Level 1 since it delves deeper into complex analysis and requires a greater understanding of investment tools and principles. To find out how you can get started with your exam preparation today, check out our CFA Level 2 article for an overview.

What is the pass rate of the CFA Level 2 exam?

The pass rate for test takers of the CFA Level 2 exam has historically fluctuated, though it generally ranges between 40% and 55%. The annual variations in pass rates are primarily influenced by the preparedness of the candidates, as the exam’s difficulty doesn’t change too much each year.

What is CFA Level 2?

CFA Level 2 is the second of three exams in the Chartered Financial Analyst (CFA) Program. It emphasizes the application of investment tools and concepts with a focus on the valuation of various types of assets. For more information on the CFA exams, such as exam dates or the exam cost, be sure to see our What is a CFA article.

Is the CPA or CFA harder?

The Certified Public Accountant (CPA) and Chartered Financial Analyst (CFA) target different career paths — the CPA focuses on accounting, auditing, and taxation, while the CFA is geared towards investment and financial analysis. The two exams have similar pass rates, though the CFA certification is generally considered more prestigious because it takes several more years to obtain.

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For all related articles, have a look at our Financial Advisor Resources page.