CFA Level 2 Exam Weights, Study Plan, Tips, Pass Rates, Fees

CFA Level 2

If you’re looking at CFA level 2 exam prep tips, it can be assumed that you have already completed your CFA Level 1 course. First of all, congratulations, and good luck for CFA Level 2! Now, let’s look at CFA Level 2 and attempt to pass it out with a similar intensity or even more. CFA Level 2 exam is considered to be the toughest of the three levels of CFA examination.

This is a comprehensive guide that will help you know the foundation of what you can expect from the CFA Level 2 exam. We will cover the syllabus, study plan/tips, pass rates, and results to get you started. Read slowly, understand everything as you go along, and let this article be your first step of preparation.

CFA Level 2 Exam

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Without any ado, let’s begin.

Also, Complete the checkout Guide to CFA ExamCFA ExamThe Chartered Financial Analyst (CFA®) Program offers a graduate-level curriculum and examination program designed to expand your working knowledge and practical skills related to investment decision-making. read more.

About CFA Level 2 Exam

ExamCFA Level 2 Exam
FeesStandard registration fee
US$930 (ends 15 February 2017)
Core AreasEthics, Quantitative Methods, Economics, Financial Reporting, and Analysis, Corporate Finance, Equity Investments, Fixed Income, Derivatives, Alternative InvestmentsAlternative InvestmentsA financial asset that is different from the conventional investment categories such as stocks and cash is referred to as an alternative investment. Private equity, hedge funds, venture capital, real estate/commodities, and tangibles such as wine/art/stamps are all examples of alternative more, Portfolio Management and Wealth Planning
CFA® Exam DatesCFA® Level 2 is conducted once a year (1st Week of June)
The DealCFA Level 2 is a full-day six-hour examination. Candidates must pass CFA Level 1 before advancing to CFA Level 2 level, but are permitted to repeat a test if they fail to pass.
FormatItem Set / Mini Case Studies
Number of Questions120 Questions.
20 Item Sets with 6 Multiple Choice Questions  Each
Morning Session – 10 Item Sets
Afternoon Session – 10 Item Sets
Pass Rate46% in June 2016
Recommended Study HoursA minimum of 300 hours of preparation for CFA Level 2 is recommended.
What next?After you pass CFA Level 2, you can appear for the final CFA Level 3. Once you clear CFA Level 3, you are entitled to the CFA Charter (provided you have the requisite professional work experience)
Eligibility for CFA CharterYou must have one of the following:
Bachelor’s (or equivalent) degree
Be in the final year of bachelor’s degree program
Have four years of professional work experience
Have a combination of professional work and university experience that totals at least four years

CFA Level 2 Exam Weights / Syllabus

The syllabus of CFA Level 2 is quite comprehensive. In this section, we will look at each subject, their CFA Level 2 exam weights, and how you should approach each subject as you start your preparation.


source: CFA Institute

If you observe, you would see that in CFA Level 2, the weightage is given to each subject in almost similar propensity (not precisely). In Level 1 and Level 3, the intensity differs according to subjects (even a few subjects you can skip), but in CFA Level 2, you need to study all the subjects.

Ethics and Professional Standards – 10 – 15% weight

Ethics, for me, was one of the most challenging topics. Since I did not score well in CFA Level 1 in the ethics section, I was determined to spend more time on this section. My take would be to check how your score was in CFA Level 1. If you have scored more than 70%, then you already have an excellent foundation. However, if you score lower, please do spend a fair amount of time on this section. Please do not forget that the Ethics section comes again in CFA level 3.

Quantitative Methods – 5-10%

Do not neglect Quantitative Methods. You may get 1 to 2 vignettes from this section. For me, quantitative methods were again one of the most substantial areas, and I preferred to complete these sets of questions before attempting other complicated sections. Quantitative methods are both formulae as well as concept-oriented. If you are from an engineering/maths background, then you should not face many issues here. Others, please do take the time to practice this section.

Economics – 10%

Expect two vignettes from this economics section. The topics included here are Exchange rate determination and forecast, economic growth and regulation, Macro vs. MicroeconomicsMacro Vs. MicroeconomicsMacroeconomics examines the elements that influence the local, regional, national, or global economy, as well as the overall economy's averages and aggregates. Microeconomics, on the other hand, is a narrower concept concerned with the decision-making of single economic variables and only interprets the economy's tiniest more. Unfortunately, this section was one of my weaker areas. I read this section twice and practiced as many questions as I could

Financial Reporting and Analysis – 15-20%

I loved this Financial Statement Analysis section. By far, for me, it was the easiest and most interesting one. I must say that this section is the hardest as well, mainly if you are from a non-accounting background. CFA Level 2 financial reporting goes deep into individual concepts, so please do take time to practice as many questions as possible. For me, it was the end of the chapter questions from CFA Institute Books that did the trick.

Corporate Finance – 5-15%

Here you can expect 1-2 vignettes. Topics include  Capital Budgeting, Capital Structure, Dividends, and Share BuybackShare BuybackShare buyback refers to the repurchase of the company’s own outstanding shares from the open market using the accumulated funds of the company to decrease the outstanding shares in the company’s balance sheet. This is done either to increase the value of the existing shares or to prevent various shareholders from controlling the more Repurchase, Corporate Governance, Mergers and Acquisitions, and Corporate Performance. I found this section closely aligned with the Financial Reporting and Analysis. My take is that this is a low hanging fruit. You should master this concept to score well in the CFA Level 2 exam.

Equity Investments – 15-25%

This, along with Financial Reporting and Analysis, are one of the foundation level sections of CFA level 2. Topics include Industry Analysis and Company Analysis, Dividend Discount Valuation Model, Free Cash Flow to Firm, Free Cash Flow to EquityFree Cash Flow To EquityFCFE (Free Cash Flow to Equity) determines the remaining cash with the company's investors or equity shareholders after extending funds for debt repayment, interest payment and reinvestment. It is an indicator of the company's equity capital managementread more, Market-based Equity Multiple and Enterprise Valuation Multiples, and Residual Income MethodResidual Income MethodResidual income refers to the net earnings an organization possess after paying off the cost of capital. It is acquired by deducting the equity charges from the company's net profit or more. You must master this one! Trust me; this one is easy too! 

Fixed Income – 10-20%

You can expect 2-3 vignettes from the Fixed IncomeFixed IncomeFixed Income refers to those investments that pay fixed interests and dividends to the investors until maturity. Government and corporate bonds are examples of fixed income more section. This one is the favorite of those who are good at Quantitative Analysis. Topics include term structureTerm StructureThe term structure is the graphical representation that depicts the relationship between interest rates and various maturities. The graph itself is called a “yield curve.” The term structure of interest rates plays an essential part in any economy by predicting the future trajectory of more, future-forward, yields, swaps, an arbitrage-free valuation framework, valuation of bonds, embedded options, credit analysis modelsCredit Analysis ModelsCredit analysis is the process of drawing conclusions about an entity's creditworthiness based on available data (both quantitative and qualitative) and making recommendations about perceived needs and risks. Credit analysis also involves identifying, assessing, and mitigating risks associated with an entity's failure to meet financial more, credit default swaps, etc. Many candidates find this part of being difficult. Please start with the necessary foundation of the topic and practice the questions as much as possible.

Derivatives 5-15%

Expect 1-2 vignettes from the Derivatives Section. Topics here include pricing of forwards commitments, contingent claims, options trading strategiesOptions Trading StrategiesOptions Trading refers to a situation where the trader can purchase or sell a security at a particular rate within a specific period. Its strategies include Long Call Options, Short Call Options, Long Put Options, Short Put Options, Long Straddle Options, & Short Straddle Options etc. read more, etc.  This one again is the favorite topic of Quant oriented guys. There are various formulas here; however, you need to get through the necessary foundations first. Also, make sure to practice these questions using your CFA Calculator.

Alternative Investments – 5-10%

Expect 1-2 vignettes during your CFA level 2 exam. Here the important topics include Real Estate Investments, Private Equity Valuations, Commodities, and Commodity derivatives. This topic is more conceptual with some numerical. Do not avoid this section as it may become a deal-breaker.

Portfolio Management and Wealth Planning 5-10%

Expect 1-2 vignettes from Portfolio and Wealth management. This one can be very easy or difficult at the same time. Do you read the topics very carefully? It includes portfolio management, investment policy statements, multifactor models, VAR, Economic analysis, Active management, and trading. Do spend time learning the Investment Policy Statements as this is the very foundation of the most important topic found in CFA level 3.

CFA Level 2 Pass Rates

It’s important to study well. However, knowing the pass rates beforehand will help you intensify your preparation. In this section, we will look at huge data. From 1963 to 2016, we will investigate all the data and determine how easy CFA Level 2 is.

CFA Level 2 Passing Rates between 1964-1981

The passing rates for CFA Level 2 were very high in the initial years. Between 1964-1981, the average passing rate for CFA Level 2 was at 78%.

CFA Level 2 Results 1964 - 1981

source: CFA Institute

CFA Level 2 Passing Rates between 1982-2000

Between 1982-2000, the average passing rate for CFA Level 2 dropped from 78% from the earlier period to 64%.

However, do not the rise in the total number of CFA Level 2 candidates. The number of candidates appearing for CFA Level 2 increased dramatically during this level 2 results 1982 2000

source: CFA Institute

CFA Level 2 Passing Rates between 2001-2016

  • Between 2000-2016, the average passing rate for CFA Level 2 dropped further from earlier periods to 44%.
  • In June 2016, the passing rate for CFA level 2 was at 46%.
  • Also, you may note that the total number of candidates appearing for CFA Level 2 steadily increased during these 15 years.
cfa level 2 results 2001-2016

source: CFA Institute

As you can see, the intensity of CFA Level 2 requires studying hard. Buckle up and start preparing.

CFA Level 2 Exam Format Key Highlights

Before we go ahead and talk about study tips, have a look at the format of the exam so that you can prepare yourself accordingly.

Unlike the CFA Level 1 exam, in CFA Level 2, you need to understand each concept in depth so that you can answer vignettes (mini-cases) easily.

ExamCFA Level 2
Number of questions (total)120
Type of questionVignettes (Mini-cases)
Time allotted360 minutes
Full marks360 points
Every correct answer3 points
Every incorrect answerNo penalty
Sessions2 (Morning & Afternoon)
Set of questions in each session10
In each question, the numbers of vignettes6

source: CFA Institute

  • In the morning session, there would be 10 item set questions, each set containing six vignettes.
  • In the afternoon session, you need to answer 10 item set questions containing the same 6 vignettes.
  • There will be a total of 360 points for the whole exam. You would be given 3 points for each correct answer, and there is no penalty for any incorrect answer. The period is of 360 minutes (6 hours) for the whole exam.
  • The major change in the pattern is that there is a 10 item set (each around 400-800 words) with six multiple-choice questions in each session (Morning & Afternoon Session). These six questions may be dependent or independent of each other.
  • Each item set question covers only one study session (FSA, Ethics, Portfolio), making it a bit easier to solve the vignette.

CFA Level 2 Study Plan / Prep Tips

If you have just passed CFA Level 1 and are thinking that you will crack CFA Level 2 exam in one go, then you may have judged the difficulty level of the CFA Level 2 exam by the number of questions. While the number of questions in the CFA Level 2 exam is certainly lesser, but the difficulty level of the exam is much more than CFA Level 1.

Here are the few things you need to keep in mind if you want to crack the CFA Level 2 exam in one go

CFA Level 2 exam is the hardest of all level

  • No, it’s not what we’re saying. Rather it’s being said by the professionals who have already passed CFA. They said that by any means, the CFA Level 2 exam is the toughest compared to its other two counterparts.
  • There are a few reasons for that. First of all, CFA Level 1 is way too easy for people who are good in finance and have a background in economics and maths.
  • Secondly, when the students are transitioning from Level 1 to Level 2, they’re unable to understand the difficulty level of the CFA Level 2 exam until they face the questions in the examination hall.
  • Of course, these are generalized statements and don’t include everybody, but still, there is truth in these statements. So don’t take the CFA Level 2 exam lightly.
  • Also note that now with CFA Level 2, the competition is between serious candidates who have passed the Level 1 examination.

You need to double your preparation time:

  • If you have studied 2-3 hours a day for the CFA Level 1 exam, you need to double that amount every day to pass the CFA Level 2 exam.
  • And you need much more depth in comprehending the concepts than you did in the CFA Level 1 exam. Often the vignettes are too direct, and you need to answer only one thing without having any chance to elaborate.
  • Plan and have ample time to study the whole curriculum at least 3 times, and then you need to practice sample questions so that you don’t feel a certain burst of shock while attempting the vignettes in the examination hall.

Know the weights of the subject (according to item sets):

  • You need to be a know-it-all wizard, yes, we don’t have any doubt about that.
  • But still, you need to prioritize and give more weight to the subjects that will act mightier in the item set questions. So you need to know what to expect from which subjects.
  • Four topics – Ethics, Financial Reporting & Analysis, Equity Investment, and Fixed Income represent approx. 50%-80% of the weightage.

cfa-level-2-exam-tips-focus-areaBasics of CFA Level 1 would be required.

  • CFA is a dynamic course, and every level is intertwined with each other.
  • So if you want to make your mark in the CFA Level 2 exam, then you need to thorough with the foundation concepts of CFA Level 1.
  • You may also need to go back and understand a few concepts in the CFA Level 1 exam.

Give special attention on distribution of time:

  • Vignette type questions take more time to answer than any multiple-choice type questions.
  • Thus, you need to practice a lot more before you ever get to answer everything in the examination hall perfectly. In the final section, we will discuss sample questions to get an idea about what to expect in the question paper.
  • Practicing sample questions is a must; otherwise, it would be difficult for you to clear the CFA Level 2 exam in one go. 

Should you read the vignette first or read the questions first?

  • Many candidates prefer to read the questions first to understand the kind of questions expected from the vignette (numerical, conceptual, factual), and then they read the case study. I have personally never tried this approach.
  • My approach was straight forward. I used to read the vignette quickly and then the question. For answering the questions, anyways, you will have to refer back to vignettes time and again.

Try to Score more than 70% in each section.

  • CFA does not provide individual section passing scores.
  • However, it is safe to assume that if you get more than 70% in each section, you will not fail.
  • As a strategy, I used to pick sections where I was the strongest section. My best section was the Financial Reporting and Analysis.
  • Picking the strongest helps you build confidence during the exam and also helps you save valuable time that can be used for attempting the weaker sections.

CFA Level 2 Exam Fees

It’s important to know how much you need to pay for the CFA Level 2 exam. Let’s have a look at that first. As you have passed out from the CFA Level 1 exam, you have already paid the enrollment fees. Here are the details of the June 2017 exam if you want to sit for the CFA Level 2 exam.


source: CFA Institute

When you pay the exam registration fees, you would be receiving the following things –

  • The eBook contains everything you need to study for the exam (the complete curriculum, to be precise).
  • You will receive a study planner that will help you track your exam preparation and guide you to be ahead of time.
  • You will also get topic-based practice tests.
  • You will also get mock exams.
  • And finally, you would receive a mobile app that will help you access everything else mentioned above.

If you want to purchase a print version of the complete curriculum, you can do so by simply paying the non-refundable US $150 plus shipping.

Over to You!

CFA Level 2 exam is hard. And it’s considered the toughest exam in finance by comparing all the courses in the finance domain. From the above examples, stats, tips, and sample questions, you now know why the CFA Level 2 exam needs all your effort, time, and hard work.

And if you’re working professional, you need to prioritize your schedule in such a way that you get to study every day at least for a few hours. It would often be hard, and you won’t feel like doing it. But for a year, if you can pursue this schedule, you will certainly see it in your results. I hope this guide has helped you shape your idea of how to start preparing for the CFA Level 2 exam. Get started right away. The clock is ticking.

Good Luck :-)

Reader Interactions


  1. Edwin Fernandes says

    Great work Sir. I have become a big fan of your blog. You explain everything in such a brilliant way which can be easily understand as specially it is very useful for beginners. Thanks and keep posting such good work. Although I have wanted to tell you that you have not mentioned much about CFA salary information? Are preparing some other guide for this or you have already done?

  2. Shane Thomas says

    Thanks for providing this informative article. I was actually searching for some online tips for CFA level 1 and CFA level 2. I found the study detail regarding the CFA Level 2 but I didn’t found the study plan related to CFA Level 1. I want to know if you have any study plan on CFA Level 1 then please share it to me. Thanks in advance

    • Dheeraj Vaidya says

      Thanks for your note Shane. If you want to study about CFA Level 1, then refer to this CFA Level 1 study plan, topics, pass rates and the essential tips to map your study progress. Happy learning