Most Frequently Asked Questions About Level III of the CFA® Exam
By this point, you’re a CFA® exam veteran. After passing the Level I and Level II exams, your confidence is strong. That confidence is an asset, but don’t take your foot off the gas just yet. Passing Level III is going to take some work.
In this article we answer commonly asked questions we hear every day from candidates preparing to sit for Level III of the CFA exam.
What To Expect on the CFA Level III Exam?
Candidates will have 4 hours and 24 minutes to finish the exam and should expect to demonstrate advanced portfolio management and wealth planning knowledge. A new question format called constructed response questions or essay questions will be introduced which will require candidates to justify or explain their answers.
What Makes Level III of the CFA® Exam Different?
The Level III exam is markedly different from the previous two levels. The most significant difference is that you have to write. It’s no longer just multiple-choice questions. If you learn and can recall the appropriate factoids, you’re going to pass the exam. But CFA Institute really throws you for a loop on Level III by changing the format of the test.
Level III CFA exam questions are more like case studies. There’s math involved, but it often can’t be reduced to a single equation. Level III essentially tests your ability to effectively do what employers will expect of you as a CFA charterholder.
Because the exam is so different, you also need to drastically adapt your preparation strategy in order to pass. Not adopting a Level III-specific preparation strategy is a primary reason candidates who did well on the previous two levels struggle when they get to Level III.
What is the Format of Level III of the CFA Exam?
The Level III exam is computer-based and includes two exam sessions. Each session is a mix of either 5 constructed response (essay) sets and 6 item sets or 6 essay sets and 5 item sets for a total of 11 sets of questions per exam session.
All question sets are worth 12 points. Each essay sets test your real-world application of the curriculum by presenting you with a scenario that you must solve or advise on. Each multiple-choice item set begins with a case statement and then asks four multiple-choice questions related to the statement.
When is Level III of the CFA Exam Offered?
The Level III exam is offered twice a year. Find out when Level III exam dates are coming up and when they have occurred in the past.
Before you choose your CFA exam date, download this free Before You Decide to Sit for the CFA Exam eBook.
Can I Postpone My CFA Exam After I’ve Registered?
You can only postpone your CFA exam after you’ve registered in specific circumstances, mostly related to medical reasons. It’s easier to withdraw, but unless you withdraw within three days of registering, you will have to pay the registration fees again and re-register.
What Subjects are Tested on Level III?
Candidates preparing for the Level III exam are not tested on all the topics that were part of the Level I and Level II syllabus. Here’s the curriculum you will be tested on:
- Asset Allocation
- Portfolio Construction
- Performance Measurement
- Derivatives and Risk Management
- Ethical and Professional Standards
- Specialized Pathways
The topics that are most tested on the Level III CFA exam is Asset Allocation and Portfolio Construction.
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What Are the Topic Weights for the Level III Exam?
Each year, Level III exam topic weights are subject to change at the discretion of CFA Institute. Here are the current syllabus topic weights for the Level III exam:
Topic | Exam Weight |
| Asset Allocation | 15–20% |
| Portfolio Construction | 15–20% |
| Performance Measurement | 5–10% |
| Derivatives and Risk Management | 10–15% |
| Ethical and Professional Standards | 10–15% |
| Pathway (Portfolio Management, Private Markets, or Private Wealth) | 30–35% |
How Much Time Should I Spend Studying for Level III of the CFA Exam?
While CFA Institute recommends candidates spend a minimum of 300 hours preparing for each level of the CFA exam, in a recent Kaplan Schweser CFA Program Survey, we saw 62% of those who recently passed the CFA Level III exam spent over 300 hours preparing.
7 Tips for Effectively Using Your 300 Hours >>
How Difficult is the Level III Exam?
The Level III CFA exam is challenging because, as detailed previously, the exam format is quite a bit different than the Level II and Level I formats.
Explore Fellow Candidate's Views On CFA Level III Exam Difficulty
What Score Should I Aim for in My Level III Mock Exams?
Level III candidates should strive for a target mock exam score of 65% or higher. If you find yourself scoring below 65%, assess your performance in each topic area to identify where improvements are needed and adjust your study plan accordingly.
What is the Level III CFA Exam Pass Rate?
The pass rate for Level III of the CFA Exam usually falls within the 50-57% range but some recent CFA pass rates have been lower. It’s important to remember that everyone sitting for Level III has already passed the first two levels. So these are the best of the brightest candidates, and still only slightly more than half passed.
How is the Level III Exam Graded?
CFA® exam grading is done by machines and charterholders. CFA Institute then uses a methodology to determine a minimum passing score that is applied to each exam.
How Much Does it Cost to Sit for Level III?
What you’ll pay to sit for Level III of the CFA exam varies depending on when you register. If you register early, there is a smaller fee, which will give you extra money to invest in CFA Level III exam prep materials. Expect to pay around $1,000 - 2,500 USD for the Level III exam, including prep materials.
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