How to Pass the CFA^® Exam

Your CFA exam score is graded by machines and charterholders. CFA Institute then uses a methodology to determine a minimum passing score that is applied to each exam. In this article, we break down how the whole grading process works and share some tips to increase your likelihood of getting a passing score.

Key Takeaways

1. The CFA exam is graded by machines for the multiple choice sections and human graders for the essay sections. CFA exam graders go through a multi-step process to ensure consistency and fairness.
   
2. The MPS (Minimum Passing Score) is set after each exam administration to determine whether a candidate has passed or failed. The MPS is 1600 for Level I, 2600 for Level II, and 3600 for Level III.
   
3. Candidates receive a "Pass" or "Did not Pass" result along with a scaled score and a breakdown of their performance by topic area. A candidate with a score above the MPS for their level will pass the exam and a candidate with a score below the MPS will not pass the exam.
   

TABLE OF CONTENTS

• Step-By-Step Exam Grading Process
• Minimum Passing Score Explained
• Final Grades
• How To Pass
• Perfect Score

CFA Exam Score Grading

The multiple-choice sections in all three levels of the CFA exam are graded by a machine, although 10 percent are checked by humans. The essay portion of CFA Level III—known as constructed response—is hand-graded by CFA charterholders. The graders are divided into teams, and each team grades one question, using guideline answers and grading keys provided by CFA Institute. The graders do not know the names of any of the candidates or even their testing centers.

Junior graders, senior graders, and a grader of graders not only grade the exams but also check the work of others to ensure consistency and quality. The middle 50 percent of the distribution of scores are graded again by someone else to ensure that marginal cases get another pass.

Then, for those exams with questions where the scores of the first and second rounds of grading are different, there is a third round of grading. This thoroughness from the CFA Institute is why it can take so long to get your results, but is critical to ensuring that the grading rubric is being applied fairly.

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CFA Exam Grading Process: Step-by-step

If you’re wondering why it takes so long to receive your results for these computer-based exams, this comprehensive, step-by-step breakdown of the grading process helps explain the timeline:

1. Testing centers send exam data to Prometric after your test day. Once the results are received, it is consolidated and made available to CFA Institute. Due to the high volume of CFA candidates, this first part of the process can take several days after the exam window has closed.
   
2. CFA Institute reviews the exam day experience. It’s during the days waiting for the results from Prometric that the CFA Institute reviews candidate comments and statistics on a question-by-question basis. This helps them flag any questions that were confusing or did not do a good job of evaluating candidates’ understanding of the content.
   
3. CFA Institute validates that they have received all test results for all candidates correctly.
   
4. CFA Institute begins its official analysis. They validate that each version of the exam performs as expected. Due to the collaborative nature of the grading process—mostly for the Level III essay portion—it takes a few weeks to complete.
   
5. Standard Setting grading takes place over the next few days. This is when the CFA Institute’s pool of diverse graders (“Standard Setters”) review each question on the exam to determine the likelihood of a ‘Just Qualified Candidate’ will or will not answer that question correctly (in theory). This process essentially weighs the difficulty of questions on the exam to help determine what can be deemed as a fair passing score.
   
6. CFA Institute recommends their Minimum Passing Score. This is the aggregate of the question-by-question judgments made by graders during the Standard Setting grading process.
   
7. An automated process generates the score report that candidates receive.
   
8. Quality assurance double checks those reports for accuracy.
   
9. Results release is scheduled. The scheduled CFA Exam results release is always scheduled in advance with bandwidth in mind, given the high demand of candidates rightfully wanting to access their scores immediately upon release.
   

What Exactly is the CFA Minimum Passing Score?

The Minimum Passing Score (MPS) is the benchmark used to determine whether a candidate has passed or failed the exam. The MPS varies for each level and is determined after each exam administration.

To get the MPS, CFA Institute conducts workshops for each level of the exam. Workshop participants go through the entire exam several times, looking at each question to make independent judgments on the expected performance of a “just-qualified candidate” on each question.

After they correlate the judgments and review them, they issue a report that provides a score range for the exam. CFA charterholder members on the Board of Governors of CFA Institute use this report as the foundation for setting the MPS for each level.

Because the CFA Institute uses multiple versions of each exam, they need to make sure the MPS is set fairly across different versions. To do this they use the process of equating, which is a statistical process to maintain comparable scores on different test versions both within and across administrations. With this method, the CFA Institute can be confident the MPS was set fairly across two or more different versions of the exam.

The Final Grade

After the MPS is set, it is applied to each graded exam, and candidates get their results. They receive either “Pass” for a score at or above the MPS or a “Did not pass” result for a score below it as well as their numerical scaled score to compare against the MPS.

With their grade, candidates also get a summary of how they did by each topic area covered on the exam and the maximum amount of points that candidates can earn in each topic area. The score for each topic area is expressed in three ranges: less than 50 percent, between 50 and 70 percent, and more than 70 percent.

CFA Exam Grading Interpretation Guide >>

How to Get a “Pass” Result after CFA Exam Grading

If you would like to increase your chances of getting the “Pass” grade, here are some steps to follow for each level of the CFA exam:

1. Develop your study plan 6–9 months before the exam.
2. Allot 90–120 hours to reading and coursework, 120–150 hours to answering practice questions, and 60 hours to taking practice and mock exams.
3. Make all Learning Outcome Statements part of your plan.
4. Use study groups and CFA exam prep courses to stick to your plan.
5. Know the exam weights.
6. For each concept you learn, ask yourself how it applies in the real world.
7. In the last weeks, before the exam, instead of panicking or ramping up your study intensity, space your practice sessions further apart, and get plenty of rest.

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Feeling Ready For The Exam?

• CFA Exam Window Dates
• How CFA Exam Results Are Released
• How To Find Your CFA Exam Results
• Do CFA Exam Results Expire
• What Time Do CFA Exam Results Come Out
• How The CFA Exam Is Graded
• How To Interpret CFA Exam Results
• Can You Share CFA Exam Results
• CFA Exam Pass Rates

When Will February 2025 CFA Exam Results Be Released?

CFA exam results are estimated to be released on the following dates for the February 2025 CFA exam windows:

• Level I: April 3, 2025
  
• Level II: April 22, 2025

Latest CFA Exam Pass Rates >>

When are CFA Exam Windows?

CFA Exam Level I Window Example

CFA Exam Level II Window Example

CFA Exam Level Ill Window Example

CFA Exam Dates

How CFA Exam Results are Released

The CFA Institute will notify you via email if you passed or failed.  If you are interested in seeing the detailed breakdown of your performance in each section, you can log in to your account with the CFA Institute and find that information.

CFA Exam Tip >> Starting with the February 2024 Level I cohort and the May 2024 Level II cohort, Practical Skill Modules (PSMs) need to be completed in order to receive exam results. They can be found in CFAI's Learning Ecosystem and need to be finished before the exam results are released.

If you do not complete a PSM by the time results are released, your exam result will be voided, and you will not be provided with a pass or fail result. To continue your journey in the CFA Program, you will be required to retest at the same exam level.

CFA Program Practical Skills Modules Guide >>

How to Find Your CFA Exam Results

CFA exam results will be emailed directly to you and will be immediately available to view for approximately one year after the test date in your CFA Institute account profile. If you need to find your CFA exam results after this date, you will need to generate and download a verification letter from your CFA Institute account profile.

Do CFA Exam Results Expire?

No, CFA exam results do not expire and will be available to you for as long as you have your CFA Institute profile active.  The CFA designation is not a licensing program and hence it does not have an expiration date.

What Time Do CFA Exam Results Come Out?

The CFA Institute does not usually set an exact time for emailing out results to test-takers, but you can expect to receive your results sometime after 8 AM CDT.  Below are some local times in other regions of the world that take the CFA exam:

• São Paulo: 10 AM
• London: 2 PM
• Berlin: 3 PM
• Cape Town: 3 PM
• New Dehli: 6:30 PM
• Singapore: 9 PM
• Shanghai: 9 PM
• Tokyo: 10 PM
• Sydney: 12 AM

How is the CFA Exam Graded?

Can You Share CFA Exam Results?

There are no rules against sharing your CFA exam results with others. Letting your community know how you performed may even be beneficial by gaining encouragement and helpful insights whether you are preparing to retake the exam or move on to the next level. Reviewing your lower scored areas with fellow candidates or an instructor can also contribute to better understanding the CFA curriculum throughout the study process. 

CFA Exam Pass Rates

The CFA Institute has been keeping a record of pass rates for each level of the CFA exam since 1963.  In 2021, the pass rate for each level did not exceed 45%.  The CFA exam pass rates change after every exam window and vary based on the exam level. To find the most current pass rates for each CFA level visit our CFA exam pass rate guide for more information.  

Ready To Get Started?

As you strive for a positive outcome from CFA exam grading, consider making a Kaplan Schweser CFA study materials—complete with classes, practice exams, and mock exams—the centerpiece of your mission to earn a passing grade on all levels of the CFA exam.

Starting to study Economics early is smart, especially if you have no prior experience because it covers a wide range of material and is present at all three exam levels. Therefore, it is crucial to gain a strong foundational knowledge in Economics during your CFA Level I exam prep to ensure a successful CFA candidacy.

• Topics in Demand and Supply Analysis
• The Firm and Market Structures
• Aggregate Output, Prices, and Economic Growth
• Understanding Business Cycles
• Monetary and Fiscal Policy
• Introduction to Geopolitics
• International Trade and Capital Flows
• Currency Exchange Rates

How To Study for CFA Level I Economics Topic

After covering the previous curriculum topics, take each Economics reading in turn and focus on the terminology given, paying particular attention to what the Learning Outcome Statement requires of you. 

Remember this is Level I - several of these topics will be covered in more detail at later levels, so try not to get too bogged down in the minutiae and keep moving through the material. 

Once you have covered the whole topic you will be better equipped to go back and understand which readings you need to spend more time focusing on. 

CFA Level I 6-Month Study Plan

What is a Learning Outcome Statement (LOS) for the CFA Exam?

Learning Outcome Statements while studying for a CFA exam refer to specific skills and concepts you should possess within an exam topic whereas exam topics describe the broader body of knowledge you should have. For example, the Economics exam topic at Level I has many LOSs that you’ll need to learn. 

An example of a CFA Economics LOS is “describe how economies of scale and diseconomies of scale affect costs.”

Why CFA Candidates Need To Learn Economics

The Economics topic helps to put so many other topics into the context of what is happening in the wider business world. There are many topics that are introduced across the readings which set the scene for the fictional businesses we face in the CFAI questions. Although only one topic in each question in the CFAI examinations, the content covered here undoubtedly affects the day-to-day life of a business in the real world. 

Assess your baseline knowledge of the Level I CFA Program curriculum with a free CFA diagnostic exam

How Much of the CFA Exam Tests Economics?

The Economics topic represents 6%-9% of the Level I exam, which is approximately 10-16 questions.  This topic is tested in the morning session, within the Tools Functional Area, alongside Quantitative Methods and Financial Statement Analysis.

Is the CFA Level I Economics Topic Hard?

Economics is one of the most divisive topics from this perspective. Candidates who have never studied Economics before can find this a tough area as it covers a wide range of concepts (with varying levels of depth). 

However, successful candidates will focus on each reading in turn. It’s likely you’ll find one or two of the readings more challenging to master, rather than all of them. 

If you have prior knowledge of Economics, you are likely to find this an easier topic, however, it is crucially important to focus on what is covered in the CFAI Level I syllabus rather than trying to bring in any other knowledge you have, which will not be tested.

Try Today’s Featured Level I Practice Question

CFA Prerequisites for Level I Economics

The Level I Economics curriculum assumes candidates are familiar with concepts such as:

• Supply and demand
• Utility-maximizing consumers
• The product and cost curves of firms 

CFAI has posted three assigned readings to its website as prerequisites for Level I, so ensure you review these before you delve into the assigned readings. 

When Should CFA Level I Candidates Study Economics?

Economics can be covered at any point during your Level I CFA exam studies. If you have a background in Economics you might like to study this early on to check any crossover with prior knowledge, or any further studying required. 

This topic has a wide breadth so it is worth starting on it early on, whether you have prior knowledge or not, to ensure you’re aware of the task at hand.

Best CFA Level I Study Order >>

Economics Prerequisite Readings

Economics readings will be one volume of readings. Volume 2 from 2023 will move to “pre-requisite” status, which means it will not be tested but available for you as needed.

CFA prerequisite readings are meant to help you meet the prerequisite knowledge requirements for the CFA Program.

2024 CFA Level I Economics Prerequisite Readings

Below are overviews of each Level I Economics reading and what you are expected to learn.

Topics in Demand and Supply Analysis

The first reading covers elasticity, normal and inferior goods, as well as economies and diseconomies of scale. It also looks at breakeven and shutdown points of production, considering what choice a business would make depending on its marginal cost, average total cost, and average variable cost.

The Firm and Market Structures

There are four market structures covered in this reading: 

1. Perfect competition
2. Monopolistic competition
3. Oligopoly
4. Monopoly

After studying this area, you will be able to compare and contrast these structures as well as use concentration measures to determine market power.

Aggregate Output, Prices, and Economic Growth

The focus here is on macroeconomics and the measurement of aggregate economic output using GDP. The fundamental relationship is introduced as well as the aggregate demand and aggregate supply curves, before considering what factors would cause shifts in these curves (such as changes in consumers’ wealth and exchange rates. 

The reading finishes by looking at the production function and growth in potential GDP.

Understanding Business Cycles

The business cycle has four phases:

1. Expansion
2. Peak
3. Contraction or recession
4. Trough

These are the starting point for top-down financial analysis and this reading covers how to interpret economic indicators to understand which phase an economy is in. 

Indicators of unemployment and inflation are looked at in more detail in the second half of this reading.

Monetary and Fiscal Policy

Monetary policy refers to the central bank’s actions that affect the quantity of money and credit in an economy, while fiscal policy refers to a government’s use of spending and taxation to influence economic activity. 

This reading looks at the tools used in each of these and their expansionary or contractionary impacts. This reading has a lot of content but can be broken down into smaller sections.

Introduction to Geopolitics

This reading focuses on terminology, an explanation of what geopolitics is, its relationship with globalization, the tools used within geopolitics, and what impact geopolitical risk has on investments. 

International Trade and Capital Flows

You will first compare gross domestic product and gross national product, before moving on to calculations of comparative and absolute advantage. 

Examples of trade restrictions include tariffs and quotas, as well as agreements including trading blocs and common markets. 

Balance of payments accounts is explained before ending with the functions and objectives of international organizations such as the World Bank.

Currency Exchange Rates

It is important to understand spot exchange rates, and forward exchange rates, to be able to calculate exchange rates based on currency appreciation and depreciation as well as cross rates. 

Towards the end of the reading, there is a discussion regarding exchange rate regimes, as well as the impact exchange rates have on trade deficits.

Review CFA level I Economics with Free Flashcards

CFA Level I Exam Practice Questions

Answer these 5 questions to test your readiness for the Level I Exam.

Is Economics the Same for CFA Level I and Level II?

Economics is weighted less at Level II than at Level I. At Level II, the syllabus has one reading on exchange rates, one on economic growth, and one on economic regulation. To a certain extent, Level II has a smaller breadth of topics covered than Level I, but of course Level I is assumed knowledge. 

What Are the Best Books for CFA Level I Economics?

We would recommend starting off by reading the Schweser CFA Level I SchweserNotes for Alternative Investments, which also provide illustrative examples and Module Quizzes for you to test your understanding. Once you have covered the material, you should cover as many other questions as possible from our range of resources such as the Schweser CFA Level I QBank.

Ready To Start Preparing For Economics?

Looking for more guidance on how to prepare for Economics? Enroll in one of our CFA Level I Premium study packages to receive expert instruction, CFA Program study materials, and more. Give yourself the best chance to prepare, practice, and perform on the CFA exam.

Keep Reading For More CFA Level I Topic Overviews

• Quantitative Methods
• Corporate Issuers
• Financial Statement Analysis
• Equity Investments
• Fixed Income
• Derivatives
• Alternative Investments
• Portfolio Management
• Ethical and Professional Standards

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Feeling Ready For The Exam?

The CFA exam pass rate is low because it is a challenging exam with three levels. The percentage of people who pass all the levels is small, especially when you consider that the passing rate for Level 1 is less than half. Let’s look at the data, and discuss what you can do to increase your chances of passing.

Key Takeaways

1. CFA exam pass rates are on the rise, especially Level I.
2. No level of the CFA exam is easy. Each level is progressively harder.
3. You should be prepared to allocate at least 300 hours to studying for each level.

TABLE OF CONTENTS

• Level I Pass Rates
• Level II Pass Rates
• Level III Pass Rates
• CFA Exam Difficulty
• Study Tips

CFA^® Exams Passing Rate

CFA^® exam grading is done yearly by machines and charterholders. CFA Institute then uses a methodology to determine a minimum passing score that is applied to each level of the exam. That score is not made public. Pass rates for CFA Level I and Levels II and III are given out for each exam window.

For those who passed, congratulations. For those who did not, we will help you take the next best step forward and are dedicated to helping you achieve your professional goals.

Whatever your exam result, the obvious question now is, “What do I do now?” If you received your results and failed the CFA Exam, we lay a tactical plan for what your next steps should be.

Recent CFA Level I Exam Pass Rates

The CFA Level I pass rate for November 2024 was 43%, which is above the historical average of 41%. This continues the trend of above-average pass rates for all Level I exams in 2024, a change from the below-average rates of recent years.

Recent CFA Level II Exam Pass Rates

The Level II all-time average pass rate is 46%. Recent results have varied, however the November 2024 pass rate is well below the all-time average for Level II.

Recent CFA Level III Exam Pass Rates

The August 2024 Level III exam pass rate was 48%, which is below the all-time average pass rate but basically aligned with post-pandemic averages.

Why are Recent CFA Exam Pass Rates So Low?

You probably noticed 2023 and 2024 pass rates beginning to get closer to all-time averages and even exceed them in some cases. In 2022 and late 2021, there were all sorts of speculation about the reasons for the low scoring. As expected, scores are beginning to normalize but continue to remind candidates to take exam prep seriously.

If you haven’t taken the exam yet and these scores concern you, this is a good time for you to consider a CFA exam prep package, which can increase your odds of being in the passing statistics.

Considering taking the CFA exam? Download our free eBook, Before You Decide to Sit for the CFA^® Exam, to get advice and tips from past exam-takers.

How Hard is the CFA Exam?

Be prepared for a challenge at any level. As you can tell based on the recent passing rates, the CFA Exams are widely considered to be difficult exams. For Levels I and II, you are expected to know the major concepts related to these topics and how they are applied:

• Ethical and Professional Standards
• Quantitative Methods
• Economics
• Financial Statement Analysis
• Corporate Issuers
• Equity Investments
• Fixed Income
• Derivatives
• Alternative Investments
• Portfolio Management

CFA Level Difficulty: Which CFA Exam is the Hardest?

No level of the CFA exam is easy. Each level is progressively harder. In the end, the number of candidates who pass all three levels is a small percentage of those who register for Level I and stick with it. That said, the general consensus of those who have taken all three levels of the CFA exam is that Level III is the most difficult because of the constructed response questions, which are in the format of essay questions.

For those who have gotten used to the multiple-choice format, writing answers can be difficult. Also, there is a tendency for some candidates to think that constructed response questions should be treated like essay questions on a college or graduate school exam, but they are completely different.  

Study Tips: How to Increase Your Odds of Passing the CFA Exam

You should be prepared to allocate at least 300 hours to studying for each level. These tips will help you develop the knowledge and confidence necessary to increase your odds of passing:

• Create your CFA study plan, and start studying early. 
• Focus on the Learning Outcome Statements (LOS) from CFA Institute because they detail exactly what you are expected to do on exam day. 
• Sign up for a CFA exam preparation class.
• Develop a steady, regular study routine. 
• Balance your studying between reading and practicing with breaks in between to enable concepts (and their application) to percolate.
• Build your confidence daily by signing up for a CFA question of the day. Take at least one CFA mock exam. The best mock exams simulate the actual Prometric computer-based exam. They help you assess your mastery of everything you’ll be expected to know and do when you sit for the actual CFA exam, along with how well you handle the pressure of a timed exam.

6-Month Study Guide for Level I

Next Steps for CFA Candidates

Learn more about the CFA Exam if you are interested in becoming a Chartered Financial Analyst. If you are interested in taking (or re-taking) the exam, check out our CFA study materials.

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• Rules For Postponement
• Emergency Deferral Policy
• Paid Deferral Policy
• Deferral Policy Processing Time
• Withdrawing From The Exam
• Exam Rescheduling Fee

CFA Program Deferrals Cost Increased in 2025

Starting with the February 2025 exam window, the price of paid deferrals increased from $399 to $449 USD.

There is also a new $100 USD processing fee for all approved emergency deferral requests. This fee is to cover the administrative costs associated with canceling your registration.

2026 CFA Program Cost Updates >>

Rules of CFA Exam Postponement for Individual Candidates

If the CFA institute does not announce a postponement for all candidates, that means people can only reschedule in specific circumstances or pay a fee to postpone their exam date. They call this a deferral, and they decide whether to offer deferrals case-by-case. 

To be considered for the emergency deferral, you must notify CFA Institute using the CFA Institute Deferral Form. CFA Institute has a self-assessment tool you can use to determine whether you should request this deferral.

After reviewing your case, CFA Institute will determine whether you can postpone your scheduled exam to the next sitting. If your case meets the criteria, you will be offered a qualified deferral, and your enrollment and registration status will be deferred until the next sitting. However, you will forfeit any fees you paid.

The reasoning behind this policy is that the number of paid registrations determines the number of testing centers, computers, furniture, and other equipment to reserve in the testing centers. Paid registrations also determine the support services needed. In addition, CFA Institute says, a deferral creates an empty space that can’t be filled.

If you don’t qualify for a deferral and you are not able to take the exam on the scheduled date, you have the option of withdrawing from the CFA exam or purchasing a voluntary deferral.

Sign up for our CFA question of the day and get a CFA question sent directly to your inbox every day to help prepare for the next sitting.

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CFA Exam Deferral Policies

CFA Institute Emergency Deferral Policy Qualifications

• You or your immediate family member (parent, sibling, spouse/domestic partner, or child) are suffering from a life-threatening illness.
• A member of your immediate family (parent, sibling, spouse/domestic partner, or child) has recently died.
• You have been ordered to mandatory military deployment in the testing window.
• You are pregnant.
• Your exam has been rescheduled by Prometric within 30 days of your exam window and after contacting Prometric, you are unable to find a new acceptable appointment date.

CFA Institute Paid Deferral Policy

CFA Deferral Policy Processing Time

Withdrawing From the CFA Exam

Paid Deferral Deadline

Candidates have up until 3 days following the close of the exam window to purchase a deferral.

Emergency Deferral Deadline

If You Miss the Deferral Deadline

Rescheduling the CFA Exam: How to Avoid It

No one can predict the future and certainly not medical and other emergencies. However, it’s best if you can avoid postponing or withdrawing from the exam. This is especially true for Levels II and III since they are offered less often than Level I exams. Here are some tips that can help you be prepared for your scheduled exam:

• If you have a full-time job, before you register, look at your weekly schedule and think about what blocks of time you could realistically set aside to prepare for the exam. Err on the side of caution, and if the exam is six months away or less, consider a later sitting.
• If you are still in college, before you register, consider the implications of having conflicting priorities, such as an internship or looking for a job.
• If you have decided to sit for the exam, register during the early registration period.  Early registration for the CFA exams usually opens about nine months before the exam date, so start studying as soon as you register. If you get stuck on a topic and need extra time, you have a few more months to prepare.
• Treat 300 hours as the minimum you should study, and plan to study more. Successful charterholders often say that it took 350 hours or more to study, especially for Level III. An effective CFA study plan can help.
• If you have already registered, and you think you are falling behind, reassess your study plan. Think about your problem areas or the topics that have the higher weights, and focus your study on them.
• Know when the CFA exam is being offered.

Want to Feel Confident About Taking the Exam on the Scheduled Date?

Our CFA study materials offer live instruction, practice questions, and more. They can help you stick to your study plan and show up on your scheduled exam day, feeling confident about your odds of passing.

While everyone hears about the difficulty of Level I of the CFA® I exam, very few believe it until they experience it for themselves. To pass the exam, you will need to achieve at least the minimum passing score (MPS) set by the Board of Governors of CFA Institute after each exam. The all-time average CFA Level I pass rate is only 42%, and some pass rates have been even lower. People who are studying for the CFA exam are smart, driven, and want to pass just as much as you do. That means it is crucial that you have a study plan and adhere to it.

TABLE OF CONTENTS:

• Start Your CFA Exam Level I Prep Early
• How Much to Study for CFA Exam Level I 
• Review CFA Institute's Learning Outcome Statements
• Know CFA Level I Exam Topic Weights & Curriculum
• CFA Level I Exam Quiz
• Recommended CFA Level I Prep Breakdown
• Learn How to Take the CFA Level I Exam
• Apply CFA Level I Exam Concepts to Real Life
• Can You pass CFA Level I with Self Study

Develop and Begin Your CFA Level I Exam Prep Routine Early On

Ideally, your Level I CFA exam prep should begin about six-to-nine months before your exam day, and be finished three months out from your exam date. Many successful CFA charterholders credit their study routine for their success in taking the CFA exams. Not only do you need to study the material, but you also need to be able to apply what you learned to scenarios on the exam. This level of understanding and practical application takes time to develop. Therefore, it is crucial that you get into a study routine early and stick to it.

Begin your journey to becoming a successful CFA candidate by downloading our free CFA Program fundamentals eBook

How Long To Study for the Level I CFA Exam

CFA Level I candidates should spend at least 6 months studying for the Level I exam. 6 months is the industry standard and is actually why CFA Institute implemented the requirement that candidates cannot sit for an exam within 6 months of a previous attempt. CFA candidates can certainly try to study in less time, but the best way to prepare for the Level I exam comes down to giving yourself ample time to study.

How to Study for the CFA Level I Exam in 6 Months >>

According to the results of a recent Kaplan Schweser CFA Study, we see the number of hours spent preparing for exams increase after the CFA Level I exam. While 50% of those who most recently passed the CFA Level I exam spent 300 or more hours preparing, this increased to 73% for those who most recently passed the CFA Level II and 62% for those who most recently passed the CFA Level III exam.

Is 1,2,3,4, or 5 Months Long Enough To Study For Level I?

No, studying for any CFA exam in less than 6 months will not give you enough time to adequately prepare unless you have a relevant background in the curriculum.  According to CFA Institute, candidates study on average 348 hours for the Level I exam, 364 hours for the Level II exam, and 365 hours for the Level III exam. 

How Many Study Sessions Do You Need for CFA Level I Exam Prep?

You should engage in 80-100 study sessions across your six-to-nine months preparing for the Level I CFA Exam. We arrived at this range because most CFA Candidates prefer to prep for a few hours, almost every day of the week. If your preference is to take more frequent days off from your prep, you can engage in fewer study sessions than that. However, keep in mind that if you were to only engage in 60 study sessions, then you will need to average 5 hours per study session in order to meet the minimum suggestion of 300 total hours studying. The more often you sit down for a study session, the less demanding each individual study session will be.

CFA Level I Study Progress Tracker >>

Review CFA Institute's Learning Outcome Statements (LOS)

Your focus should be on the Learning Outcome Statements from CFA Institute because they detail exactly what you are expected to do on exam day.

The Learning Outcome Statements (LOS) and core concepts are built from the Candidate Body of Knowledge, developed by the CFA Institute. They have devised study sessions and LOS to help candidates figure what should be gained from each reading. Be sure to develop your prep plan around these, as they will help you focus on the right topics for the exam.

Focus on the CFA Level I Exam Topic Weights and Curriculum

You should have a solid understanding of the CFA Program curriculum and how each topic is weighted for the Level I exam. The curriculum is updated every exam cycle, and all three levels of the exam focus on the same core topic areas. Exam weights vary by level and can change slightly from year to year, so it is good to be clear on what the weights are for the exam you are taking.

The curriculum for Level I of the CFA exam covers 10 topics, each of which is weighted. The topics and weights change regularly, but these are the most recent topics and weights:

• CFA Level I Quantitative methods: 6-9%
• CFA Level I Economics: 6-9%
• CFA Level I Corporate issuers: 6-9%
• CFA Level I Financial statement analysis: 11-14%
  
• CFA Level I Equity investments: 11-14%
• CFA Level I Fixed income: 11-14%
• CFA Level I Derivatives: 5–8%
• CFA Level I Alternative investments: 7-10%
• CFA Level I Portfolio Management: 8-12%
• CFA Level I Ethical and Professional Standards: 15-20%

Although the weights are variable (which means they are subject to change), you can see that the one with the most weight is ethics, financial statement analysis, equity investments, and fixed income. Make sure you are really on top of those four topics. Otherwise, it will be more difficult to pass the exam.

When deciding how much time to allocate to the different topics, each candidate will have strong and weak areas. Dedicate time to each area accordingly, but don’t lose sight of the syllabus weightings.

Two topics, Ethical and Professional Standards, and Financial Statement Analysis are worth more marks on the day of the exam than Economics, Derivatives, and Alternative Investments combined. As interesting as the world of derivatives is, you can’t afford to wallow in it for weeks on end for only 6%.

Latest CFA Curriculum Updates >>

CFA Level I Exam Quiz

Answer these five questions to test your readiness for the Level I Exam.

Recommended CFA Level I Exam Prep Breakdown

We recommend following the Prepare > Practice > Perform® method of studying. In your prep stage, you absorb information through reading and listening to lectures. In the practice stage, you start working through practice problems. In your perform stage, you simulate exam conditions to assess your level of readiness.

Read more about what exactly your  Level I CFA Exam Study Plan should look like.

CFA Exam Level I Prep: Reading & Lectures [PREPARE]

To increase your odds of passing, you should spend up to 40 percent of your study time preparing, which involves absorbing information by reading and listening to lectures.

CFA Exam Level I Prep: Practice Questions [PRACTICE]

On top of that, you should spend up to 50 percent of your self-study time on practice questions. Research studies have shown that practice is the most effective way to prepare for Level I.

For too many candidates, this means taking a brief quiz, marking it, and moving on. When practicing Level I CFA questions, you should spend an average of 90 seconds answering the question. However, you should spend significantly more time thoroughly debriefing the question and answer.

Sign up for our CFA question of the day and get a question sent directly to your inbox every day to help you practice.

Debriefing is a Critical CFA Level I Exam Question Strategy

Start your debrief by making sure the questions you got right were correct for the right reasons. Guessing right on exam day is a bonus. Up until then, it’s just another question that you need to review. For all wrong answers and guesses that resulted in a correct answer, it is crucial to find the area of the curriculum that let you down. If it’s a missed calculation, find at least five examples of that type of calculation. CFA Program Examiners are masters of hitting calculations from every angle. Just correcting the single instance which that question hit may not address the deeper issue. Your aim is to repeat the calculation multiple times until you can do it backward (which is incidentally a popular CFA examiners’ trick).

Kaplan Schweser’s CFA Level I Qbank is a great way to learn question debriefing.

Different Forms of CFA Level I Exam Question Debriefing

If it’s a narrative point, find the explanation in the curriculum and see if it’s an isolated fact, part of a list, or a piece of analysis on a calculation. Isolated facts need learning. Little and often is the best way. Five minutes a day, squeezed in whilst lining up for your lunchtime burrito, can make a huge difference.

Lists are more common. Most relate to a model or a theory. It’s much easier, therefore, to learn them in the context of that model. For instance, low barriers to entry in perfect competition? It means zero economic profits in the long run. Tie facts together where you can, your brain is wired to remember stories. Cause and effect will stick a lot better than disorganized memorization.

And what if it’s a piece of analysis on a calculation? Go back and find an example of the calculation. Make up your own numbers if you need to. For example, we would recommend always having a simple balance sheet and income statement handy to help with ratio analysis. If you can’t figure out why the answer was an increase, decrease, or neither, put some numbers through your simple statements and calculate the result. This approach fits with the classic definition of analysis: a detailed examination of the elements or structure of something, typically as a basis for discussion. You can’t hope to get the discussion questions right if you don’t do the detailed examination.

If you’re using something like the SchweserPro™ QBank, then you’ve got thousands of questions to attempt to cover the whole syllabus. It’s a big ask to do that, but an effective use of the questions should ensure you cover the majority of every CFA exam topic.

CFA Exam Level I Prep: Practice Tests/Mock Exams [PERFORM]

When taking Level I CFA Exam Practice Tests, your focus should be on the Learning Outcome Statements (LOS) from CFA Institute because they detail exactly what you are expected to do on exam day.

Can I Take a CFA Level I Mock Exam In-Person?

Yes, through Kaplan Schweser you can visit a Prometric exam center near you and take a practice test just like you will on exam day. Your in-person mock exam appointment can be scheduled for any day; there are no predetermined dates for “Mock Exam Windows”.

Learn How to Take the CFA Level I Exam

There’s a difference between learning the material and learning how to take the exam. Be sure you practice taking the exam in realistic simulated exam conditions in the last four weeks of studying. CFA Level I mock exams offer realistic simulated exam conditions that can really help you in your last weeks of studying.

CFA Institute will give you one mock exam, and you can purchase others with exam prep providers like Schweser. The Schweser Online Level I Mock Exam includes an exam sim mode that uses the same interface as the actual computer-based exam. It also includes a multimedia tutorial that takes you through each question and helps you understand where the answer comes from, the calculations required, and what terms they are testing you on. This helps to fill in your knowledge gaps and give you an idea of how you should pace yourself during the actual exam.

If you make a mistake, you can use it to your advantage. You can train your brain to recognize that this is the kind of mistake that can be made. Then, you’re less likely to repeat it. Successful CFA charterholders have told us they spent the entire last month working and reworking exams and focusing on the main issues.

Assess your baseline knowledge of the Level I CFA Program curriculum with a free CFA diagnostic exam

A Concurrent Option: Earn a Masters of Science in Financial Analysis (MSFA) while you Prep for the CFA Exam

Certain Masters of Science in Financial Analysis degree programs like the MSFA offered by the College for Financial Planning®—a Kaplan Company are aligned to the learning outcomes of the CFA Institute’s CFA Program, enabling students to earn an MSFA while concurrently preparing for the CFA exam. The College for Financial Planning's MSFA program also includes access to Kaplan Schweser’s CFA Essential Study Package to prepare for the CFA exam.

Apply CFA Level I Exam Concepts to Real Situations

Just knowing the material isn’t enough to pass the CFA exam. You must be able to take the knowledge and apply it to real situations. Most questions are not asking you to regurgitate memorized material. They are asking you to use problem-solving skills and apply knowledge to situations you may encounter on the job.

Many CFA charterholders advise you to always tie back what you are learning to the real world. Saqib Baig, CFA, recommends, “As you are going through the learning outcomes, keep asking yourself questions as to why you are learning this and how you are going to use this in your work.” The more you can make the study material real to you, the easier it will be to remember it.

Following these tips will ensure you are as prepared as possible for Level I of the CFA exam. Now that you know the best way to study, learn how to prepare an effective CFA Program study plan and pass the CFA Level I Exam. ​​Join Dr. Doug Van Eaton, CFA, as he discusses the CFA Program Level I curriculum and study strategies that have been proven to work.

Can I pass CFA Level I with Self Study?

Ready To Start Preparing for the CFA Exam?

Looking for more guidance on how to prepare for Level I of the CFA® exam? Enroll in one of our CFA Level I Premium study packages to receive expert instruction, CFA Program study materials, and more. Give yourself the best chance to prepare, practice, and perform on the CFA exam.

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Feeling Ready For The Exam?

Whether you’re sitting for Level I, Level II, or Level III of the CFA^® exam, CFA Institute recommends that you allot, at minimum, 300 hours for study for each level. However, if you try to cram all 300 hours into the last few months before the exam, it’s likely you will have wasted them, and your chances of passing are slim. In this article, we provide seven tips for how to use your 300 hours of study wisely to significantly increase your chances of passing.

Tip 1: Develop Your Study Plan 6 to 9 Months Before the CFA^® Exam.

Many successful CFA charterholders credit developing their study plan early for their success on the CFA exams. We recommend that you create your plan at least six months before the exam. The reason for this timing is that preparing for the exam encompasses more than simply studying the material—you have to practice applying what you learned to scenarios. This takes time to develop. However, if you can start nine months before the exam, that’s even better.

Benjamin Finley, CFA, is one of hundreds of CFA charterholders we talked to when we were developing our eBook about what it takes to be successful. He has some good advice for your plan. “The final test day is not the only deadline you need to worry about. By assigning several deadlines along the entire span of your studying period by different tasks, such as reading, note taking, flashcards, and testing, as well as topics, such as equity, fixed income, and portfolio management, you will allow yourself less chance of falling behind.” Adds Brady Raanes, CFA, CFP, another charterholder we interviewed, “Begin studying early and be willing to study longer than you anticipated.”

Want more advice like this from CFA Charterholders? Download this free eBook: Before You Decide to Sit for the CFA Exam.

Based on the results of a recent Kaplan Schweser CFA Survey, we see the number of hours spent preparing for exams increase after the CFA Level I exam. While 50% of those who most recently passed the CFA Level I exam spent 300 or more hours preparing, this increased to 73% for those who most recently passed CFA Level II and 62% for those who most recently passed the CFA Level III exam.

Tip 2: Allot 90 to 120 Hours to Prepare, 120 to 150 Hours to Practice, and 60 Hours to Perform.

For an effective study plan, we recommend following the Prepare > Practice > Perform^® method of studying, starting with the prepare stage.

Prepare

In the prepare stage, you should dedicate anywhere from 90 to 120 hours, or 30 to 40% of your study time, to reading and listening to lectures. This stage is meant for absorbing information and examples of vocabulary, theory, concepts, and principles, and it will get you ready for the next vital stage. Before you learn how to do a calculation, you need to know what it is and what tools are required. You should also spread a little of your prepare activities throughout the 300 hours. The material you learn in your first weeks of study will stay with you better if you revisit it occasionally.

Practice

Next, you should spend 120 to 150 hours, or 40 to 50% of your time, in the practice stage, working through actual problems. Basically, you take concepts you learned in the prepare stage and do practice problems related to them. It’s important that you spend more of your time practicing than preparing because how you apply what you’ve learned is what matters most. You’ll want to allot some review time for the practice stage, too. You should do the same practice questions several times to build confidence and ensure you really understand the concepts.

Sign up for our CFA question of the day and get a question sent directly to your inbox every day to help you prepare.

Perform

In the perform stage, you allot 60 hours, or 20%, to simulating exam conditions to assess your level of readiness. This stage also enables you to identify your strengths and weaknesses so you can go back and practice where you think you need it. Generally, spend the last month of studying in this stage and plan to do more than one mock exam. For example, the Schweser Mock Exam, not only mimics the actual exam, but it also offers  a mode that simulates the computer-based testing for all levels of the exam.

Can I Take a CFA Level I Mock Exam In-Person?

Yes, through Kaplan Schweser you can visit a Prometric exam center near you and take a practice test just like you will on exam day. Your in-person mock exam appointment can be scheduled for any day; there are no predetermined dates for “Mock Exam Windows”.

Tip 3: Use CFA Exam Prep Courses and Study Groups to Stick to Your Plan.

To provide the motivation to stay on task, take a CFA exam review course and treat it like a university class. Read the relevant material beforehand, get rudimentary ideas of the topics to be covered, and compile any questions you want to ask.

Another great way to stick to your plan is to join an online study group that meets regularly. You can find them on Facebook and Analyst Forum. Connecting with others who are facing the same challenges as you provides support and encouragement. In addition, being able to ask questions or explain a concept to someone else helps develop your own mastery of the topics.

Tip 4: Make All Learning Outcome Statements Part of Your Plan.

The Learning Outcome Statements (LOS) and core concepts from CFA Institute are part of the Candidate Body of Knowledge. Along with CFA Institute study sessions, each LOS helps you determine what you can gain from each reading and what you should concentrate on when studying. They also help you focus on the right topics for the exam. A word of warning: you might be tempted to guess which LOS won’t be tested. Don’t do this! Every LOS is fair game for the exam, and thinking you have a crystal ball could negatively affect your performance.

Tip 5: Know the Exam Weights.

Having a solid understanding of the CFA Program curriculum and how each topic is weighted for the exam will give you a boost on exam day. The curriculum is updated every exam cycle, and all three levels of the exam focus on the same 10 topic areas. However, exam weights vary by level and can change slightly from year to year, so it is good to be clear on what the weights are for the exam you are taking. By paying attention and staying up-to-date on exam weights, you have additional guidelines for focusing your study.

Assess your baseline knowledge of the Level I CFA Program curriculum with a free CFA diagnostic exam

Tip 6: For Each Concept You Learn, Ask Yourself How It Applies in the Real World.

To pass the CFA exam, you must take what you’ve learned and apply it to realistic situations. If you only memorize material, you will struggle to pass the exam. The purpose of the exam is to test your problem-solving skills and apply knowledge to situations you may encounter on the job. And this is why we recommend that you spend more time practicing than preparing.

Successful CFA charterholders agree. Sina Rezaei, CFA, says, “The information learned throughout the process must be executed in a real-life environment. Because of that, it is important to not only focus on the material, but to continue gaining professional experience so the two components—the CFA material and real-life cases—complement each other.”

Tip 7: As CFA Exam Day Approaches, Be Kind to Yourself.

In the last weeks before the exam, resist the tendency to panic or ramp up your study intensity due to anxiety that you might not pass. Cramming instead of reviewing and trying to do too many practice questions or exams will not improve your chances and can have adverse effects. Be kind to yourself instead.

One way to do this is to space your practice sessions further apart—this has the added benefit of helping your chances on the exam. Studies from psychological science show that when students add an extra day between study sessions, performance on a test improves significantly. Also, try to get into a good sleep routine a few weeks before the exam. Experts recommend avoiding electronics, alcohol, and late-night eating right before bed—they can all keep you from falling or staying asleep. A routine can help you sleep better the night before the exam too, when you’ll be understandably nervous.

Finally, use the day before the exam to reread some of the denser areas of the curriculum, including ethics. In the final few days of preparation, do not take mock exams, which can mentally drain you. The goal is not to exhaust your mind and body at the last minute. Resolve to go into the exam center as refreshed and rested as possible. A positive attitude also helps; tell yourself, “I can do this!”

Pros and Cons of CFA Study Methods

While there are several different ways to study for the CFA exam, it's important to choose a path that is "tried and true". Otherwise, it'll probably end up costing you more time & money in the long run (registration fees and prep materials for retakes). The old adage of "You get what you pay for" is true in most cases, and CFA exam prep is no different.

Below we try to help you figure out which CFA study methods might work best for you and some issues to look out for when studying on your own or piecing together a study package from various prep providers.

CFA Study Method 1: Using Only- CFA Institute (CFAI) Materials

Pros:

• Cost Savings: Study materials (Official CFAI curriculum available only in the CFAI Learning Ecosystem, a Study Planner, Practice Questions, and 2 Mock Exams are included when you register for a CFA exam.
• Comprehensive Coverage: All candidates receive a copy of the entire CFA Curriculum, which covers all concepts covered on the exam.
• Free Practice Exam: Study materials include an official mock exam for practice.

Cons:

• Lack of Focus: Study materials may include more information than what’s included in the actual exam.
• Length: Some candidates may find the curriculum to be overwhelmingly long and detailed.
• Engagement: Study materials may lack interactive elements or varied formats to keep you engaged. For example, exam registration only includes the curriculum available in CFAI's Learning Ecosystem. Printed books or PDFs are available but for an additional fee
• No Instructor Support: CFA subject matter experts are not available to answer content questions and help candidates with study plans.

CFA Study Method 2: Attending Live Classes

Pros:

• Structured Learning: Live classes provide structure with predetermined study times and classes.
• Real-time Interaction: Live classes allow for real-time interaction with instructors and candidates via live video or in person.
• Peer Support: Live classes offer students the opportunity to be a part of a cohort of candidates who study for the same exam and attend the same classes together.

Cons:

• Lack of Flexibility: Live classes don't provide the flexibility or convenience of OnDemand or pre recorded classes.
• Insufficient Alone: Live classes are not enough to fully prepare for and pass the exam; additional resources like practice questions, mock exams, and review materials are needed.

CFA Study Method 3: Using a QBank to Personalize Question Difficulty/Topics

Pros:

• Essential Practice: QBanks, i.e., practice questions, are a fundamental part of any candidate's study plan.
• Concept Reinforcement: Practice questions are excellent for practicing concepts learned through other instructional materials like OnDemand videos and live classes.
• Personalization: QBanks typically allow for personalization of question difficulty and topics to focus on areas of need.

Cons:

• Insufficient Alone: QBanks are not enough on their own to prepare for and pass the exam. Additional resources such as instructor guidance, mock exams, and review materials are still needed to be fully equipped.

CFA Study Method 4: Watching OnDemand Classes

Pros:

• CFA Expert Instruction: OnDemand classes provide expert-led instruction.
• Flexibility: OnDemand classes offer the convenience and flexibility of on-demand videos which can be utilized according to the candidate’s schedule and reviewed as needed.

Cons:

• Preference for Structure: Some candidates may prefer the structure and cadence of live classes.
• Insufficient Alone: OnDemand classes alone aren't enough to fully prepare for the exam; additional resources such as practice questions, mock exams, and review materials are needed.

CFA Study Method 5: Doing a Final Review

Pros:

• Comprehensive Review: Final reviews allow candidates to review concepts learned throughout their study time.
• Reinforcement: Final reviews help reinforce areas of weakness and identify where more preparation is needed before exam day.
• Exam Strategies: Final reviews provide tips and strategies for managing the time constraints of the real exam.

Cons:

• Additional Resources Needed: While most providers and CFAI offer one mock exam, taking additional mock exams is recommended as well as using more review materials (e.g., review workshops or seminars).
• Time Constraints: Candidates who start their prep late may not have time for a thorough final review.

CFA Study Method 6: Studying on Your Own

Pros:

• Preference for Independence: Ideal for candidates who prefer to study independently and without guidance from any instructors, especially those with prior expertise or knowledge of CFA concepts.
• Cost Savings: Potential for cost savings by not purchasing class options, though many providers bundle classes with self-study materials and tools.

Cons:

• CFA Expert Guidance: "You don't know what you don't know" – lack of guidance from CFA experts may leave gaps in your understanding of the curriculum.
• High Retake Costs: The high cost of retaking the exam means it can be more cost-effective to invest in comprehensive resources upfront to increase the chances of passing on the first attempt.
• Pass Protection: Many providers offer some form of pass protection, providing added assurance and potential cost savings in case of failure.

CFA Study Method 7: Learning with 3rd Party Prep Providers

Pros:

• Established Reputation: Choosing a reputable 3rd party prep provider can be highly rewarding, especially if they have a track record of helping candidates succeed.
• Translation of Curriculum: Providers translate the CFA curriculum into digestible, intuitive formats which are exam-focused, making it easier for candidates to learn and pass.
• Recommended Supplement: Using a third-party provider in addition to CFAI-provided materials is highly recommended for comprehensive preparation.

Cons:

• Taking a Chance: Choosing a provider without an established reputation can be risky, potentially leading to wasted time and money.
• Quality Assurance: There's a chance of choosing a provider with subpar materials, so it's important to select one with a proven track record of success.

CFA Study Method 8: Using Flashcards to Review CFA Learning Outcome Statements

Pros:

• On-the-Go Practice: Flashcards provide a convenient way to practice questions and concepts anytime, anywhere.
• Conventional Method: Flashcards are a familiar and widely used study tool for many candidates.

Cons:

• Additional Review Materials Recommended: While flashcards are helpful, additional review materials such as mock exams and workshops are recommended for comprehensive preparation.
• Time Constraints: Some candidates may not have time for a proper final review/revision stage, especially if they started their prep late.

CFA Study Method 9: Using Various CFA Prep Providers' Tools to Create Your Own Study Plan

Pros:

• Preference Flexibility: Allows candidates to choose specific tools from different providers based on personal preferences.
• Customization: Enables the creation of a highly customized and personalized study plan tailored to individual learning styles and needs.

Cons:

• Decreased Efficiency: Prep providers design materials to work together so piecing together products from multiple sources will mean a loss of efficiency for the candidate. 
• Loss of Pass Protection: Purchasing individual tools may result in losing out on pass protection offers typically included with bundled packages.
• Higher Cost: Individual tool purchases across providers can be more expensive compared to bundled packages, which often offer steep discounts.
• Lack of Progress Tracking: Without a singular study package, automated progress tracking across tools and classes may not be available, leading to a lack of comprehensive progress monitoring.

Ready to Get Started on Your 300 hours?

As you map out your study plan for Level I, Level II, or Level III of the CFA exam, consider making a Kaplan Schweser exam prep package—complete with classes, practice exams, and mock exams—part of your 300 hours. Discover all the ways Kaplan Schweser can help with CFA exam prep.

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Feeling Ready For The Exam?

Starting your Level I CFA exam prep early will give you enough time to develop an effective study plan and find enough time to study regardless of your situation. In this guide, we will share some of our insights with you on the study practices that can give you the best chance for success on the Level I exam.

Key Takeaways

1. You need to start early and be consistent by putting in the time and effort each week.
2. Once you create your plan, you need to be disciplined and stick to your schedule.   
3. You need to cover all of the material in the curriculum as all learning outcome statements are fair game.
4. You should follow the three key stages of learning: Prepare, Practice, and Perform®.

TABLE OF CONTENTS

• Topics and Weights
• 6-Month Study Guide
• CFA Level I Exam Quiz
• Study Progress Tracker
• Study Planner Calendar
• Tips For Studying With a Job
• Study Guide Essentials

CFA Level I Topic Weights

Month 1 Sample Calendar

CFA Level I Exam Quiz

Answer these five questions to test your readiness for the Level I Exam

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Try Today's Level I Question

Don’t worry, just add a few more hours per week to your study plan over the next few months.  At this point, you should be able to make up the time.  Remember the commitment. Nobody said this would be easy. 

Ask Industry Experts and Fellow Candidates About Catching Up On Your CFA Studies

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Months 2-4 Sample Calendar

	Hours	%Prepare / %Practice	Topics / Activities
Week 5	12	50/50	Corporate Issuers
Week 6	12	50/50	Corporate Issuers
Week 7	12	50/50	Financial Statement Analysis
Week 8	12	50/50	Financial Statement Analysis
Week 9	12	50/50	Financial Statement Analysis
Week 10	12	50/50	Equity Investments
Week 11	12	50/50	Equity Investments
Week 12	12	50/50	Fixed Income
Week 13	12	50/50	Fixed Income
Week 14	12	50/50	Derivatives
Week 15	12	50/50	Alternative Investments
Week 16	12	50/50	Portfolio Management
Week 17	12	50/50	Ethical and Professional Standards
Week 18	12	50/50	Ethical and Professional Standards, practice multiple choice questions, review selected topics, complete first mock exam (Perform)

 

CFA Study Guide: Months 5-6

You are entering the home stretch. With only two months left before your exam, you should assess where you are in your studies. At a minimum, you should have:

• finished reading the entire Level I curriculum,
• completed and reviewed multiple choice questions covering all topics, and
• completed and reviewed your first mock exam.

If you have not completed these tasks, they should be your top priority. Also, you are probably asking yourself what are some of the best strategies you can use to wrap up your preparation for exam day.  

First and foremost, relax and do not try to cram too much into your memory. Yes, you need to stay laser-focused, but you also need to take time for yourself. Put down the books, turn off the computer, and go for a well-deserved walk.

Now that you are rejuvenated, recall our Prepare > Practice > Perform® study method. We highly stress that you should be primarily focusing on practice and perform. We recommend you dedicate upwards of 90% of your study time getting ready for the exam experience. This would mean doing as many practice questions as possible and completing the remaining mock exams. 

You should complete one mock exam every two to three weeks, but save one for about one week before your exam date. Once again, pay careful attention to those questions that you missed or guessed incorrectly. However, rereading the syllabus should not encompass more than about 10% of your study time and should be directed by knowledge gaps identified from question practice.  

[ RELATED: CFA Mock Exams ] 

Months 5-6 Sample Calendar

	Hours	%Prepare / %Practice	Activities
Week 19	12	10/90	Practice multiple choice questions, review selected topics
Week 20	12	10/90	Practice multiple choice questions, review selected topics
Week 21	12	10/90	Practice multiple choice questions, review selected topics, complete second mock exam (Perform)
Week 22	12	10/90	Practice multiple choice questions, review selected topics
Week 23	12	10/90	Practice multiple choice questions, review selected topics, complete third mock exam (Perform)
Week 24	12	10/90	Practice multiple choice questions, review selected topics
Week 25	12	10/90	Practice multiple choice questions, review selected topics, complete final mock exam (Perform)

Final Review Tips

During this portion of your study plan you should dedicate some of your schedule for reviewing curriculum topics.

 

CFA 6-Month Study Guide: Final Week

We recommend you go back and take a look at Ethical and Professional Standards and Financial Statement Analysis as these two topics comprise about one-third of the Level I exam.  Pick up the Standards of Practice Handbook and skim through each standard, corresponding guidance, recommended procedures for compliance, and application of the standard. 

This activity is especially important on the day before your exam. Along with these two topics, you should go back and briefly review any others that are giving you trouble. Also, you can review terminology, if needed. For example, the Economics topic has many memorizable terms that could help you grab a few points on the exam.

Lastly, try to get a good night's sleep the night before the exam. Wake up refreshed, eat a sensible breakfast, and head off to the testing center. Good luck!

[ RELATED: CFA Program Review Workshops ] 

Final Week Sample Calendar

	Hours	%Prepare / %Practice	Activities
Week 26 - Final Week	12	10/90	Practice multiple choice questions, review selected topics, Ethical and Professional Standards

 

CFA Level I Study Progress Tracker

Keep track of your progress by downloading our free 6-Month Level I CFA study progress tracker that can be customized to fit your needs. 

CFA Level I Exam Study Planner Calendar

Get a downloadable calendar file for the Level I May 2025 exam window of the CFA Program. This calendar can be added to common calendars like iCal, Google Calendar, and Outlook and should be customized to fit your needs.  It comes with important dates, reminders, and details for studying each curriculum topic.

While our free calendar is a useful resource, we recommend that students utilizing any of our Level I study packages prioritize the use of their Activity Feed to effectively guide and pace their studies. Our Activity Feed is much more granular and will be tailored to your specific needs.

[ RELATED: CFA Candidate Guide ] 

Can you study for the CFA Level I Exam in 1, 2, or 3 months?

No, studying for any CFA exam in less than 6 months will not give you enough time to adequately prepare unless you have a relevant background in the curriculum.  According to CFA Institute, candidates study on average 348 hours for the Level I exam, 364 hours for the Level II exam, and 365 hours for the Level III exam.  

Studying for 6 months is the industry standard and is actually why CFA Institute implemented the requirement that candidates cannot sit for an exam within 6 months of a previous attempt. CFA candidates can certainly try to study in less time, but the best way to prepare for the Level I exam comes down to giving yourself ample time to study.

 

Study Tips for CFA Level I with a Job

Obviously, one of the biggest challenges when preparing for the CFA Level I exam is the time commitment. This becomes an even bigger issue when trying to balance your job demands and your study time. Here are some tips that can help you overcome the stress of studying for the exam.  

Manage Your Time

If you start studying 6 months before your exam, you will need to study about 12 hours per week.  However, as time passes and your initial enthusiasm starts to wane, you could be in danger of falling behind.  Then, when you factor in your family life, social life, and your job pressures, you can see why candidates can struggle with the time commitment. 

Stay Motivated

Studying for the CFA Level I exam is a long process and candidates may find it difficult to stay motivated when they do not have a clear picture of their progress.  If you let your studies drift, the backlog of material to cover soon increases, and the number of study hours per week starts to climb.  This could make studying too much of a burden.

Be Efficient

You must cover all areas of the curriculum, however, you must factor in your strengths, your weaknesses, and exam weights when developing your study plan.  Given the breadth of the material, you must develop a study plan that maximizes your time.  One fatal error is attempting to reproduce the syllabus into your own notes.  That exercise is a massive misuse of time and could cause you to skip practicing multiple choice questions and/or mock exams.  

Practice Concepts 

Even if you have the technical knowledge, you still need to practice a significant amount of multiple choice questions in order to apply your knowledge to exam-based questions. The more you can practice, the stronger you will become in applying your knowledge.  Answering questions incorrectly outside of the testing center, and identifying why you answered them wrong, may help prevent you from making the same mistakes on exam day.   

Try Some Free CFA Flashcards to Practice Concepts

View Flashcards

 

Remember To Finish Your Practical Skill Modules

Practical Skill Modules (PSMs) need to be completed to receive exam results. They can be found in CFAI's Learning Ecosystem and should be finished before your exam results date.

If you do not complete a PSM by the time results are released, your exam result will be voided, and you will not be provided with a pass or fail result. To continue your journey in the CFA Program, you will be required to retest at the same exam level.

CFA Program Practical Skills Modules Guide >>

CFA Level I Study Guide Essentials

These comprehensive exam prep materials include some of our most popular free CFA Level I resources to help prepare you for the CFA exam.

CFA Level I QBank

Kaplan Schweser’s Level I QBank provides you with thousands of multiple choice practice questions that reflect the actual exam so you don’t get surprised or overwhelmed on exam day.  

CFA Level I Notes

Kaplan SchweserNotes™ contains 5 volumes of bite-sized segments and examples that help you break down the CFA Program curriculum and learn every Learning Outcome Statement plus questions to check your understanding. Also included is our SchweserNotes™ Module Videos which provide 40+ hours of recorded videos to reinforce your understanding of the material. If you are an auditory learner, consider adding Level I SchweserNotes™ Audio to your CFA prep materials.  

CFA Level I OnDemand Classes

Learn from expert instructors on your own schedule with in-depth video lectures covering every topic in the Level I CFA® Program curriculum.

CFA Level I Exam Flashcards

Kaplan Schweser Level I flashcards help you memorize CFA exam-specific content so you can study with confidence.

CFA Level I Mock Exams

Kaplan Schweser Level I mock exams allow you to practice taking computer-based exams and get feedback on your performance.  Learn how to use a CFA mock exam to sharpen your testing skills and get familiarized with the actual interface you’ll use on the actual CFA exam.  

CFA Level I Exam Secret Sauce

Kaplan Schweser's Secret Sauce® is a book for (expert reviews) of the CFA Program syllabus that provides (you) candidates with insights and tips to prepare for exam day.  

CFA Level I Review Workshops

Kaplan Schweser CFA Program review workshops give you access to expert CFA instructors to help you practice exam-taking techniques and build speed during the final weeks of preparation.  

Get Access

Take a free diagnostic exam

Feeling Ready For The Exam?

Taking mock CFA exams is an important step in the process of preparing for a CFA exam. Surprisingly, some CFA candidates do not use them, but those who do, report being much more confident in their knowledge and skills when it comes time to sit for the exam.

Key Takeaways

1. Taking mock CFA exams is crucial for CFA exam preparation. They help simulate the real exam experience and identify strengths and weaknesses.
2. Aim for a score of 70% or higher on Level I mock exams, 70% or higher on Level II, and 65% or higher on Level III.
3. Take a minimum of 5 mock exams, but more for Level III due to the writing section. Kaplan Schweser offers in-person mock exams at Prometric exam centers.

TABLE OF CONTENTS:

• What is a mock CFA exam?
• When should CFA candidates take a mock CFA exam?
• How to choose the right mock CFA exam?
• What is a good mock CFA exam score?
• Mock CFA exam grading process
• How many mock CFA exams should candidates take?
• Mock CFA exam vs actual exam
• Differences between practice questions and mock exam

What is a Mock CFA Exam?

A mock CFA exam is a simulated test-taking experience provided by CFA prep providers for CFA candidates. Mock CFA exams are designed to build candidates' confidence by immersing them in realistic testing conditions and exposing them to the format, difficulty, and length of the CFA exam.

When Should CFA Candidates Take a Mock CFA Exam?

CFA candidates should start taking mock exams a few weeks before sitting for the actual exam. If they have access to multiple mock exams through their prep provider, they can consider taking one a little bit earlier to begin identifying their strengths and weaknesses but should avoid taking one too early. If they take a mock exam too late, they won’t have enough time to improve their performance in identified areas of weakness.

Assess your baseline knowledge of the Level I CFA Program curriculum with a free CFA diagnostic exam

How to Choose the Right Mock CFA Exam For You

Each CFA prep provider will offer a slightly different mock exam experience and content. When considering which mock exam is right for you, look for information about how closely they simulate the testing conditions. Most candidates won’t be able to simulate exact testing room conditions because they won’t be able to travel to the testing location and take a practice test in that room but they do have control over which mock exams they use to prepare for exam day.

CFA Expert Tip: Check with a local CFA society to see if they offer in-person mock exams.

One basic feature candidates should look for when choosing a mock CFA exam should be if the exam is an online computer-based exam. Then they should look for information about how closely the interface imitates the actual CFA exam interface. 

Another important feature to investigate is figuring out if the mock exam experience mimics the actual experience candidates will face during the exam. One of the most important experience factors is time.  Candidates should make sure the mock CFA exam provider offers an experience that imitates the actual time limit candidates will face on exam day. 

Candidates should also look for important features like breaks and completion constraints. Will they be allowed to take a 15-minute break in between sessions similar to how the actual CFA exam is administered? Also what happens if they don’t finish the mock exam in the allotted time? Will they be able to go over the time limit to finish? The answer should be yes to all of these questions.  

Once those features have been satisfied, candidates should make sure the mock exam gives them access to explanations about why the answer is correct or wrong, and scoring and performance tracking by topic area. This feature is what candidates should use to identify curriculum knowledge gaps and improve testing-taking skills. 

Start a free trial to see how our core study tools will help you prepare for the CFA exam

How to Strategically Use CFA Mock Exams While Working Full-Time

If a candidate is working full-time they may not have spare time to waste on the topics or skills they have already mastered. Using a mock CFA exam is a great way to do a last-minute check on how far along they are in mastering the curriculum and skills needed to pass the exam. Mock CFA exams should give candidates performance tracking by topic area and that information should be used to turn weaknesses into strengths. 

How to pass the CFA exam while working full-time >>

Computer vs. Paper-Based Mock CFA Exams

Remember, all CFA exams are administered through computer-based testing. So if a candidate decides they want a printed copy of a mock exam that is fine. When it comes to answering questions in a mock exam, candidates will want to make sure they use a computer-based format that mimics the actual interface they will encounter on exam day.

What is a Good Mock CFA Exam Score?

On any mock CFA exam, candidates should be scoring above 65%. Some levels require a higher score and that’s because the minimum passing score is different for each level and gets adjusted after each administration. Assuming all mock exams are equally difficult, which they may not be, below are general mock CFA exam scores candidates should aim for.

Achieving these target mock exam scores should make candidates feel very confident sitting for the CFA exam.

Sign up for our CFA question of the day and get a question sent directly to your inbox every day to help you prepare.

How To Use Mock CFA Exam Scores To Improve a Study Plan

A mock CFA exam should be used to test candidates' knowledge of the curriculum and expose them to the testing interface. Mock exams should be used in the last few weeks of preparation so, if a candidate takes a mock exam and scores lower than the recommended target score, they should start by using the mock exam software analytics to identify what is holding them back and focus on the issues. 

Another option is to ask questions about your performance in an online forum or directly to a CFA prep instructor. They may be able to quickly point you in the right direction to keep you on track for exam day.

How are Mock CFA Exams Graded?

Mock CFA exams are usually graded by the software used to take the mock exam. Results are quickly calculated and candidates are given a percentage score that indicates if they passed or failed. Mock exam scoring systems are good indicators of how candidates will do on the actual exam and the process for grading mock CFA exams is much simpler than how CFA exams are graded.

How Many Mock Exams Should Candidates Take Before the CFA Exam?

For each level, CFA candidates should take a minimum of 5 mock CFA exams. Level III candidates should take more than 5 CFA Level III mock exams because this will help them fully prepare for the writing skills that are needed to answer constructed response questions.

For level I candidates this will be their first introduction to the exam testing experience so they should make sure to get fully acclimated to the interface.

CFA Expert Tip: There is such a thing as too much practice, so candidates should remember to use mock exams strategically and purposefully.   

Does CFA Institute Provide a Mock Exam?

Yes, CFA Institute provides a mock CFA exam as part of their Learning Ecosystem. These mock exams can be available to registered candidates within two months of their exam date.

Mock CFA Exam vs. Real Exam

Every CFA prep provider’s mock exam experience can be slightly different but candidates should expect the mock exam to be as close to the real exam as possible. 

A Kaplan Schweser mock CFA exam offers a “Sim Mode,” which simulates the interface, format, difficulty, and length of the actual CFA exam from Prometric.*

This mode is timed using the same time limits and built-in breaks of the CFA exam that serve as guidelines so candidates can replicate exam day as close as possible. Once the timer hits zero, they don’t have to stop the exam, however. They can continue completing the mock exam including flagging, skipping, and filtering questions just like they can at the official testing center.

Can I Take a CFA Level I Mock Exam In-Person?

Yes, through Kaplan Schweser you can visit a Prometric exam center near you and take a practice test just like you will on exam day. Your in-person mock exam appointment can be scheduled for any day; there are no predetermined dates for “Mock Exam Windows”.

What’s the Difference Between CFA Exam Practice Questions and a Mock CFA Exam?

CFA mock exams are designed to assess your mastery of everything you’ll be expected to know and do when you sit for the actual CFA exam. Mock exams are not a substitute for practice questions or tests, and practice questions and tests are not a substitute for mock exams. Each has its own purpose and uniquely prescribed usage.

Nearly all CFA exam review providers incorporate practice questions and tests into their curriculum. For instance, Kaplan Schweser offers the SchweserPro QBank® as our question practice, and our study packages include practice exams that mimic the types and order of questions on the exam. These tools are meant to be used throughout your preparation to ensure you have an understanding of what you’ve already studied and are prepared to move to the next topic.

Try Some Free CFA Flashcards to Study on-the-go

Best Mock CFA Exam Simulator for Practicing

If you want to put an exclamation point on the time you’ve spent preparing for the CFA exam and give your chances of passing an extra boost, a mock exam is a worthwhile investment.

Get Access

Take a free diagnostic exam

Feeling Ready For The Exam?

As you know, each CFA level exam is difficult and requires many hours of preparation. So, congratulations on passing your exam! Being a part of the percentage of CFA candidates that pass should make you proud. We recommend taking a moment to celebrate and share the good news with your family and friends.

When you are ready, think about what contributed to your latest achievement. Share that advice with other candidates and help them in their pursuit of becoming a CFA charterholder.

• I Passed Level I of the CFA Exam
• I Passed Level II of the CFA Exam
• I Passed Level III of the CFA Exam

Takeaways from Recent CFA Exam Pass Rates

Recent CFA pass rates have continued to demonstrate the importance of preparing. There are many contributing factors, however, being aware of what's next and knowing exactly how to prepare for your exam is the most important factor to focus on. It’s important to reflect on your most recent exam preparation experience and assess what worked and what needs to be improved.

If you have been utilizing Kaplan Schweser’s JumpStart Materials to get ahead on the curriculum, then you are in great shape. You can sign up for the next exam and take advantage of the momentum you’ve already built.

If you have not yet begun studying for your next exam, it is important to reflect on your most recent exam preparation experience and assess what worked and what needs to be improved. Reflect on these insights, your personal/professional goals, and the various exam window options offered by CFA Institute to determine when you will take your next exam. Once you have selected an exam window, it is imperative to create a structured CFA study plan and commit to sticking to it.

I Passed the CFA Level I Exam

If you recently passed Level I of the CFA Exam, we suggest starting your CFA Level II prep early and beginning to familiarize yourself with strategies to help you pass your next exam. 

As you begin to research what to expect when taking the Level II Exam, pay close attention to:

• Weight variances for each curriculum topic 
• New question formats
• Testing time differences
• Advanced techniques needed to answer questions

Top 10 Differences between CFA Level I and Level II »

What Jobs Can I Get After Passing CFA Level I?

If you’ve only passed Level I, you may have a slight advantage when looking for an internship in the financial industry. However, we highly recommend you continue to pursue the CFA charterholder qualification by preparing for the CFA Level II Exam.

Jobs after CFA Level I »

When To Register for Level II of the CFA Exam

It’s recommended that you spend 6-9 months preparing for the CFA Level II exam, so first, find out when the next CFA Level II Exam window is. Then, begin creating a structured CFA study plan around that date.  Don’t rush yourself, and be sure to give yourself enough time to prepare.

Sign up for our CFA question of the day and get a CFA question sent directly to your inbox every day to help prepare for the next sitting.

I Passed the CFA Level II Exam

If you recently passed Level II of the CFA Exam, we suggest starting your CFA Level III Exam prep early and beginning to familiarize yourself with strategies to help you pass your next exam. 

As you begin to research what to expect when taking the Level III Exam, pay close attention to:

• Constructed response questions
• Writing skills needed
• Curriculum topic differences
• Weight variances for each curriculum topic

CFA Level III Exam FAQs »

What Job Opportunities Are There After Passing CFA Level II?

When to Register for Level III of the CFA Exam

You should plan on committing 6-9 months to prepare for the CFA Level III Exam.   Find out when the next CFA Level III Exam window is and then begin creating a structured CFA study plan building toward that date.  You are so close to the finish line, but don’t rush yourself on this last exam.

Get Ready to Pick a Specialized Pathway

Specialized pathways are curriculum tracks CFA Level III candidates need to select when registering for the Level III exam. There are three specialized pathways to choose from:

1. Private Wealth
2. Private Markets
3. Portfolio Management

How to Decide Which Specialized Pathway is Best For You >>

I Passed the CFA Level III Exam

You did it, you’ve put in the hard work and passed all three CFA exams! And now, you're wondering how to officially become a CFA charterholder so you can start putting the CFA designation after your name. You’ll first need to look into applying to become a CFA charterholder with the CFA Institute.  

Applying to Become a CFA Charterholder

In order to officially become a CFA charterholder after passing the Level III Exam, you’ll need to have already completed at least 4,000 hours of relevant work experience in a minimum of three years, apply to become a regular member of the CFA Institute, and join a local CFA Society.

Your CFA Regular Membership application should include the following:

• 2-3 professional references
• Payment of $275 USD
• A brief description explaining how you meet the relevant work experience requirement

Updating Your CFA Status

Once you are a CFA member who has earned the CFA qualification, you can begin using CFA marks on your resume and social media as long as you continue to be an active member of the CFA Institute.  

How To Show CFA Designation on Resume and Social Media »

Stand Out Amongst CFA Charterholders with an ESG Certification

What Jobs Do I Qualify For After Passing Level III of the CFA Exam?

After passing the Level III CFA Exam, you will not qualify for jobs until you have officially registered with CFA Institute as a CFA charterholder. Becoming a CFA charterholder is a prestigious designation that will help you stand out in a crowd of applications for positions such as:

• Investment Manager
• Hedge Fund Manager
• Investment Banking Analyst
• Corporate Financial Analyst
• Stock Analyst

If you decide to pursue a job in one of these fields and have trouble, consider getting more relevant work experience and pursuing an additional financial designation such as the Chartered Alternative Investment AnalystSM (CAIA).

Every year, hundreds of thousands of candidates attempt to pass the CFA® exam. Because the CFA charter is widely considered to be the gold standard within the investment community, it is no surprise that the intense difficulty of the exams results in the majority of candidates failing at least once. And when it happens to you, it can be a frustrating feeling. But all is not lost. You have experience on your side, and you can retake the exam with confidence. You just need to keep a few things in mind as you prepare for your retake.

Recent Low CFA Level I, II, and III Exam Pass Rates: What it Means for You

Across recent CFA Exam administrations, there was a consistent trend: noticeably low pass rates. The low pass rates have been a trend across all the Level I, Level II, and Level III CFA exams. While there are multiple contributing factors to that trend, including COVID-19, and more, it’s most important to focus on what to do next as you continue to climb toward becoming a CFA Charterholder.

If You Did Not Pass the CFA Exam

The average candidate spends four years in the program, meaning most do not pass at least one exam on their journey to becoming a CFA charterholder. Combine that fact with the historic low pass rate for recent exams, and you can rest assured that many smart, capable candidates are in the same boat as you. 

While it is easy to feel that you wasted 300 hours of study for no reward, a better way to think about it is that you have completed a large amount of the study requirement for your next attempt. Although the CFA Program curriculum does change each calendar year, much of the knowledge you have gained from the previous exam will still be relevant for your next attempt at the exam. Don’t give up on the CFA Program. Instead, view the time you spent this year as an investment in ensuring you pass the next exam. So, what to do now? 

Retaking a level of the CFA exam is not nearly as time-consuming as studying a level from scratch. It should be much easier to balance your work, family, and study commitments this time around. Having said this, it still pays to start your studies early and spread the study time over many months to minimize the impact on your life.

Do You Need to Re-Do Practice Skill Modules (PSMs) After Failing?

If you failed the CFA exam and have to sit for the same level again, you will not have to complete another Practical Skill Module until you advance to the next level.

Retaking the CFA Exam

How Many Times Can You Retake the CFA?

CFA candidates can take each exam level a maximum of six times, a policy that was instituted in 2021. Also beginning with the 2021 exams, candidates can take an exam up to two times per calendar year, but cannot take the exam in windows that are less than 6 months apart.

When to Retake the CFA Exam

The first step to deciding when to retake the exam is to assess your previous exam preparation experience. How many hours did you spend preparing? Did you consistently stick to a structured study plan? Are there other study materials that could help you pass your next exam? Examine how you will approach exam prep differently going forward, reflect on your own personal/professional goals, and consider the various exam window options offered by CFA Institute to determine when to retake the CFA exam. 

In general, we recommend retaking the exam as soon as possible, especially if you can do so in the same calendar year. Registering for the next possible exam is best for the following reasons: 

• Momentum is on your side. Even if you have been taking a break since your last exam, all of the effort you put into preparing for it is relatively fresh. 
• The longer you wait to retake the exam, the higher the likelihood that you will forget the material that you have already learned.
  

It is particularly important to retake the exam in the same calendar year if at all possible, since CFA Institute changes the CFA Program curriculum on an annual basis. Retaking the exam before these annual updates will give you a higher probability of passing because you will be more familiar with the curriculum being tested.

Regardless of which exam you decide to sign up for, we have some recommendations for approaching the next exam attempt:

• Carefully review your exam results and use them as a diagnostic tool to help guide your studies on the next attempt.
• Organize your study plan to focus on weak areas first. Your study plan should be weighted heavily toward practicing the material using the SchweserPro QBank and end-of-chapter questions in the CFA curriculum. 
• After doing additional practice, if you are still performing poorly, revisit the SchweserNotes and OnDemand class videos to relearn the concepts with which you are struggling. 

Continue this process until one month prior to the exam and then focus on a well-structured final review process. especially if you were unable to do this for the May exam. 

For final review, focus heavily on practicing what you have learned, but with the Schweser Mock Exams rather than the SchweserPro QBank. After completing a mock exam, thoroughly review the answer explanations for the questions you answered incorrectly. Make certain you understand the logic behind the correct answer.

Also, be sure to use the OnDemand Review videos to sharpen your exam strategy and ensure you retain information for the exam. 

Finally, get help through our InstructorLink tool if you are still struggling with the material. We want you to succeed on the CFA exams and are always ready to help.

CFA Level III Exam Re-taking Strategies

Learn some strategic planning methods for overcoming knowledge gaps in preparation for your next attempt at Level III.

Takeaways from Recent CFA Exam Pass Rates

According to CFA Institute, the recent low pass rates are somewhat of an anomaly, as they are largely driven by candidates who have been affected by COVID-19 related deferrals and cancellations. Additionally, it looks like we are seeing a higher minimum passing score (MPS) in the era of computer-based testing. Both of these factors have combined to yield the lowest pass rates ever recorded in the history of the CFA Program. 

What does this mean for candidates? You need to be better prepared to go into the CFA exam. We suggest that you aim to be scoring more than 75% on mock exams, rather than the 70% we used to suggest. This extra work will certainly pay off in increasing your chances on exam day. And also, Level I candidates should keep in mind that the more prepared they are for Level I, the easier the Level II and III exams will be. 

No one likes to fail an exam, but given the difficulty of the CFA exams, it is the norm rather than the exception. Very few candidates pass all three CFA exams on their first attempt. CFA Institute estimates it takes the average successful candidate four years to complete the CFA Program. So failing one level, if not two, makes you an average candidate. It is difficult for most candidates entering the program to accept this.

Most people entering the program are high fliers who have passed most, if not all, exams that they have taken in the past. As one candidate recently said, “I don’t do failure.” As recent CFA pass rates would suggest, passing all levels of the CFA exam is the exception rather than the rule.

Keep in mind, whether you pass or fail the CFA exam, Kaplan Schweser is here to support you during every step of your journey to becoming a CFA charterholder.

Passing all three levels of the CFA exams within 18 months is an ambitious goal, but with the right strategy, it's achievable. To become a CFA charter holder in such a compressed timeline, you’ll need to develop a highly structured study plan and be committed to prioritizing this in your life over the next year and a half.

This article will help you understand what you are getting into and how you can set yourself up for success to pass the CFA exams in 18 months. 

Key Takeaways

1. To pass all three CFA exams in 18 months you will need to strategically pick your exam dates and pass all three exams on your first attempt.
2. Plan to spend 6 months preparing for each CFA exam and having very little free time during this endeavor. 
3. Dedicate yourself to your CFA study plan and stick to the Prepare > Practice > Perform® method.

TABLE OF CONTENTS

• Curriculum Topics
  
• Requirements
  
• Choosing Exam Dates
  
• Setting Up Study Schedule
  
• Taking Breaks
  
• Fast Track Study Tips & Practice Questions
  
• CFA Prep Resources

CFA Curriculum Topics

Below are the topic areas and associated exam weights for each CFA exam level.

Requirements to Become a CFA Charterholder in 18 Months

Trying to become a CFA Charterholder in 18 months is only suited for you if you have prior financial knowledge or a degree in a mathematical field like engineering. It would not be a good idea for you to attempt to become a CFA Charterholder in 18 months if you have an arts background.

The main requirement to become a CFA charterholder in 18 months is that you pass each CFA exam on your first attempt and you’ve already fulfilled most of your education and work experience requirements. This means you should already have a bachelor's (or equivalent) degree and most if not all of your 4,000 hours of work experience.

Since it’s recommended that you spend at least 6 months preparing for a CFA exam, you’ll want to make sure you have lots of free time to study for each exam. You should be ready to take minimal breaks between exam levels and plan your CFA exam dates appropriately.

You’ll also need to trust that you passed each exam on your first attempt and not wait for your CFA exam results before preparing for the next exam.

After passing all three exams you’ll still need to apply to become a CFA Charterholder. Your CFA Regular Membership application should include the following:

• 2-3 professional references
• Application fee of $275 USD
• A brief description explaining how you meet the relevant work experience requirement

How to Become a CFA Charterholder in 18 Months

To become a CFA Charterholder in 18 months you’ll need to choose exam dates that fit within 18 months, and set a study schedule for each exam level. 

How to Choose Your Exam Dates

Level I CFA exam dates are typically offered four times a year. Level II CFA exam dates are usually offered three times a year. Level III CFA exam dates are usually offered only two times per year.

So to time this right, you’ll prep and pass for Level I and Level II in the same year and then sit and pass for Level III in the following year to become a CFA in 18 months.

For example, you could choose the February exam window for Level I, then choose the August exam window for Level II, and finally pick the February exam window for Level III.

Or if you feel very comfortable with the CFA curriculum you could attempt to pass Level I during a May exam window, pass Level II in November of the same year, and then finally take some extra time to prepare for Level III by sitting for Level III during the following year's August exam window.

Remember it’s recommended that CFA candidates spend at least 6 months preparing for each exam window and some candidates report spending up to 9 months preparing for Level III.

How to Setup Your CFA Study Schedule

Just because you are trying to pass all three CFA exams in 18 months does not mean you get to cut corners. You still should break down your CFA study schedules for each exam using the  Prepare > Practice > Perform® method. Here's how:

1. Prepare (50% of your time): Focus on building your technical knowledge by reading the curriculum, watching videos, and studying. Go through the content in order since later topics build on earlier ones. Avoid skipping sections, as each topic is interconnected.
2. Practice (50% of your time): Once you’ve built a foundation, shift to CFA practice questions. Review the reasoning behind every answer, even the ones you got right. Pay extra attention to questions you guessed on or got wrong, and revisit those topics in the curriculum to strengthen your understanding.
3. Perform (later in your study plan): You don’t need to start simulating exam conditions until later in your study plan. Around the fourth month, begin taking mock exams to assess your readiness. This will help you get used to the exam format and manage your time effectively on exam day.

By following this approach, you'll steadily build up your knowledge, reinforce it through practice, and finally, test yourself under exam conditions when you’re ready.

Interested in Learning Your Strengths and Weaknesses? Start With a Free CFA Diagnostic Exam

When To Take Study Breaks

You don’t have much time to take study breaks if you are trying to pass all three CFA exams in 18 months. Because your timeline will be more compressed than normal it’s even more important to take breaks and allow yourself to absorb new information and practice applying it to real-world scenarios.

In our 6-month study plan for Level I, we suggest you take Sundays off to relax and recharge each week. This is still our recommendation but instead of 6 months, this advice applies to the next 18 months.

Depending on which exam date windows you choose, you may be able to work in a rest week in between each exam level but no matter what you should try to take a week off after passing Level II. Level III is the hardest CFA exam because it requires you to apply your learnings from Level I and Level II in the form of written answers to “constructed response” questions.

CFA Expert Tip: Make sure to complete your Practical Skills Modules at each exam level. At least one module must be finished at each level before your exam results are released or your exam attempt will be voided and you’ll have to sit for that exam again.

CFA Fast Track Study Tips

Your top priorities should be staying organized and sticking to your CFA study plan during all three levels of the CFA Program. Level II and Level III CFA build upon what you learn at Level I, so you’ll really want to make sure that you master the fundamentals of the CFA curriculum during your Level I prep.

You’ll also want to make sure you spend at least a month or two taking CFA mock exams so you get familiar with the testing conditions. If you can, schedule an in-person mock exam at your local Prometric exam center. This experience will expose you to the closest experience that you can expect on test day.

Once you make it to Level II, you’ll need to hone in on your strengths and weaknesses within the CFA curriculum and practice solving vignette questions.

Vignette questions on the Level II exam are similar to mini-case studies. They will present a business scenario over several paragraphs, often incorporating a combination of text, tables, and financial statements. By the end of your Level II prep, you should be able to quickly understand vignette questions and be able to answer specific questions related to the information presented. 

As you start your Level III prep, you’ll want to start focusing on your writing skills because Level III introduces constructed response questions. These new question types will ask you to write out your answers and according to most candidates, it’s the hardest part of the Level III exam.

To gain the necessary practice in constructed response questions, you’ll want to sign up for an essay review workshop where you can practice your speed and exam-taking techniques.

Another thing to get prepared for early is choosing a specialized pathway at Level III. This will dictate 30–35% of your Level III exam result. Choosing a specialized pathway is a way for you to apply your curriculum knowledge to your career goals. Each pathway is equally as challenging so make sure you select the one that best fits your trajectory versus which one seems like the easiest to you.    

CFA Level I Exam Practice Questions

Answer these 5 questions to test your readiness for the Level I Exam.

CFA Prep Resources

These comprehensive exam prep materials include some of our most popular free CFA resources to help prepare you for each CFA exam.

CFA Level I 6-Month Study Progress Tracker

CFA QBanks

Kaplan Schweser’s QBanks provides you with thousands of multiple-choice practice questions that reflect the actual exam so you don’t get surprised or overwhelmed on exam day.  

CFA Notes

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Feeling Ready For The Exam?

Practical Skills Modules (PSM) are short training modules that CFA candidates must complete before receiving their exam results. They cover a variety of CFA curriculum topics and typically take 10-20 hours to complete. This guide provides an in-depth overview of each PSM and highlights their importance in the CFA Program.

TABLE OF CONTENTS

• PSM Overview
• How to Choose Your Practical Skills Modules 
• Level I PSM Topics
• Level II PSM Topics
• Level III PSM Topics
• When to Take a Practical Skills Module
• PSM Frequently Asked Questions

What are the CFA Program Practical Skills Modules?

CFA Practical Skills Modules are training modules that CFA candidates must complete to get their exam results. They are intended to provide candidates with real world application of concepts related to the CFA curriculum.

Each PSM typically takes 10-20 hours to complete and if you don’t complete at least one at each exam level by the time your exam results are released, your exam attempt will be voided. PSMs are completion based; candidates will not receive a score. Candidates must complete at least one PSM at each level of the CFA program, but may complete more than one if they choose.

CFA candidates can expect to watch videos, read case studies, follow along with guided practice sessions, and answer multiple-choice questions.

Why CFA Candidates Need to Complete Practical Skills Modules

With the introduction of Practical Skills Modules, CFA Institute is keen to provide CFA candidates with best practices and hands-on training. The intent is to accelerate the development of skill sets that candidates will need to help prepare them to fill more advanced positions in the finance industry. The selected modules are directly related to the concepts they are learning in the CFA program curriculum.

Which Practical Skills Modules Are Best for Me?

The PSMs that you select during your journey through the CFA program depend on your interests, career goals, and current skill set, as well as the needs of your employer. There are five PSMs, which fall into four categories:

• Financial Modeling 
• Python for Financial Analysts
• Analyst Skills (Equity and Risk)
• Portfolio Development and Construction

Python for Financial Analysts

Python is an open-source, versatile, easy-to-use language with powerful tools that is very popular among finance professionals. Its popularity in the finance industry continues to grow with some companies requiring their analysts to know Python.

Python enables analysts to gather and analyze data, perform statistical analysis, and create visualizations for informed decision-making. It offers an extensive array of libraries and modules that can handle a broad range of needs from data manipulation to machine learning. It’s used to build banking applications, optimize portfolios, enable financial forecasting, identify trends, develop trading strategies, build risk management models, and more.

All of this makes the Practical Skills Modules for Python a solid choice for any CFA candidate.

Financial Modeling

Financial modeling is a vital forecasting and planning tool used in multiple industries. It helps companies assess their current financial position and predict future financial performance, which is critical in making sound business decisions, such as:

• business valuation
• identifying investment opportunities
• structuring deals
• risk management
• resource allocation 
• developing growth strategies
  

Financial models are used extensively in investment banking, private equity, corporate analysis, equity research, asset management, and the credit market.  Analysts proficient in financial modeling are capable of complex projects, which can lead to more strategic roles in an organization. As such, developing skills in financial modeling will benefit the careers of most CFA candidates.

What is Financial Modeling? >>

Analyst Skills (Equity and Risk)

CFA candidates, who are interested in or currently working in the securities industry, both buy-side and sell-side, should consider the ‘Analyst Skills’ PSM. Skills in equity research and analysis are essential for professionals in this industry.

These analysts leverage their expertise to produce research reports, forecasts, valuations, and recommendations on investment opportunities in companies and stocks of interest to investment banks, institutions, and their clients.

Achieving the CFA charter is typically recommended for equity analysts who want to move up the career ladder. Selecting the Analyst Skills PSM further demonstrates your interest in equity research and analysis and provides an opportunity to analyze best-in-class practices of equity research analysts.

Portfolio Development and Construction

According to BlackRock, portfolio development and construction “is the process of understanding how different asset classes, funds, and weightings impact each other, their performance and risk, and how decisions ladder up to an investor’s objectives.” The purpose is to strategically allocate capital in order to capture opportunities and to improve portfolio returns. It requires a strong understanding and skill set in asset allocation, performance evaluation, risk management, diversification, volatility, fund management efficiency, and the investment time horizon.

This PSM is suitable for candidates interested in positions in investment management, portfolio management, equity research, and hedge funds. It’s a natural follow-on to the Portfolio Management Level III Specialized Pathway.

Level I CFA Practical Skill Modules Topics

There are two (2) Practical Skills Modules available to Level I candidates. Only one PSM needs to be completed by Level I candidates but both are recommended.

• Financial Modeling
• Python Programming Fundamentals

Financial Modeling Practical Skills Module

The Financial Modeling Practical Skills Module is where Level I or Level III candidates will learn how to build a three-statement financial model that demonstrates their ability to understand business issues, design best practices, and technical skills.

It is recommended that candidates have a basic understanding of the principles behind Financial Modeling or have finished studying the Level I Financial Statement Analysis topic before starting the Financial Modeling Practical Skills Module. 

Learning Outcomes for Financial Modeling

The skills CFA Institute intends candidates to develop during the Financial Modeling PSM are:

• Learning how to explore financial modeling best practices
• Discovering how to build model schedules
• Advancing Excel techniques
• Building a working financial model in Excel
• Solving common financial modeling problems

Python Programming Fundamentals Practical Skills Module

The Python Programming Fundamentals Module is available for Level I, Level II, or Level III CFA candidates. During this PSM, candidates will develop proficiency in writing Python code for financial-based data science projects using Jupyter Notebooks.

It is recommended that candidates have basic knowledge of the Level I Quantitative Methods topic before starting the Python Programming Fundamentals Practical Skills Module.

Learning Outcomes for Python Programming Fundamentals Module

The skills CFA Institute intends candidates to develop during the Python Programming Fundamentals PSM are:

• Gaining expertise in Python programming fundamentals
• Discovering how to use Jupyter Notebooks
• Utilizing Python libraries like Pandas and Matplotlib
• Optimizing portfolios using Monte Carlo simulations and Sharpe ratios
• Using APIs to collect real-world financial data

Level II CFA Practical Skill Modules Topics

There are three (3) Practical Skills Modules available to Level II candidates. Only one PSM needs to be completed by Level II candidates.

• Analyst Skills
• Python, Data Science & AI
• Python Programming Fundamentals

Analyst Skills Practical Skills Module

The Analyst Skills Module is available for Level II, or Level III CFA candidates. During this PSM, candidates study best practices from successful equity research analysts and learn how to apply those best practices to their own practices.

It is recommended that candidates already know the principles behind Equity Investments and Financial Reporting and Analysis content from the Level II CFA curriculum. 

Learning Outcomes for Analyst Skills Module

The skills CFA Institute intends candidates to develop during the Analyst Skills PSM are:

• Identifying key metrics and the ability to forecast a stock’s performance 
• Generating insights from forecasts
• Creating accurate price targets
• Discovering how to make accurate stock recommendations using the TIER™ framework
• Using ENTER™ and ADViCE™ frameworks to motivate others to act on stock recommendations
• Improving productivity

Python, Data Science & AI Practical Skills Module

The Python, Data Science & AI Module is available for Level II, or Level III CFA candidates. During this PSM, candidates develop the skills to execute financial data science workflows using Python and Jupyter Notebooks by applying advanced machine learning techniques from forecasting EPS changes to sentiment analysis.

It is recommended that candidates already have a basic understanding of Python and CFA Level II Machine Learning topics.

Learning Outcomes for Python, Data Science & AI Module

The skills CFA Institute intends candidates to develop during the Analyst Skills PSM are:

• Using Jupyter Notebook for data science and AI projects
• Encoding and tokenizing text data
• Training and evaluating neural networks for regression and classification
• Understanding neural networks and deep learning theory
• Assessing machine learning models with KPIs
• Optimizing models with GridSearchCV
• Mastering feature engineering and data cleaning
• Using scikit-learn for building and testing models
• Explaining linear regression and variable roles

Python Programming Fundamentals Practical Skills Module

The Python Programming Fundamentals Practical Skills Module at Level II is the same as at Level I. If Level I candidates didn’t complete this PSM then completing it at Level is a good idea. 

Level III CFA Practical Skill Modules Topics

There are five (5) Practical Skills Modules available to Level III candidates. Only one PSM needs to be completed by Level III candidates.

• Analyst Skills
• Financial Modeling
• Portfolio Development and Construction
• Python, Data Science & AI
• Python Programming Fundamentals

The only Practical Skills Module that is unique to Level III is Portfolio Development and Construction. All the other modules are available at Level I or Level II so completing this PSM at Level III is a good idea

Portfolio Development and Construction Practical Skills Module

The Portfolio Development and Construction is available for Level III CFA candidates only. During this PSM, candidates develop the skills to develop, implement, and manage an institutional investor portfolio.

It is recommended that candidates taking the Portfolio Development and Construction Practical Skills Module have a solid understanding of the principles of portfolio management or have completed CFA Portfolio Management curriculum topics at Level I and Level II.

Learning Outcomes for Portfolio Development and Construction Module

The skills CFA Institute intends candidates to develop during the Portfolio Development and Construction PSM are:

• Creating an Investment Policy Statement
• Evaluating investment performance using benchmarks, Modern Portfolio Theory (MPT) statistics, and efficient frontier analysis using ETF portfolios
• Exploring MPT and diversification, use Excel’s Solver for Mean-Variance Optimization (MVO)
• Analyzing and optimizing portfolio performance with CME and backtesting with Strategic Asset Allocation (SAA)
• Conducting sensitivity analysis with scenario evaluations and Monte Carlo simulations using historical data for Tactical Asset Allocation (TAA)
• Assessing portfolio performance against objectives, evaluating financial metrics (returns, risk, Sharpe, and Sortino ratios), reviewing TAA impacts, hedging currency risk, and communicating insights to stakeholders

How to Prepare for CFA Practical Skills Modules

To prepare for a CFA Practical Skills Module, candidates are encouraged to meet the prerequisites for each module. Candidates can start a PSM any time after registering for an exam window, but CFA Institute encourages candidates to come prepared with some familiarity of the topic.

For example, at Level I, there are two Practical Skills Modules for candidates to choose from:

• Financial Modeling
• Python Programming Fundamentals

In the Financial Modeling PSM, you will be asked to use Excel to build a financial model. In the Python Programming Fundamentals PSM, you will be asked to perform portfolio optimizations in Python.

Go with your strengths and choose the one that you feel most comfortable with at Level I. Python Programming Fundamentals is available at all three Levels whereas Financial Modeling is only available to Level I and Level II candidates.

Assess your baseline knowledge of the Level I CFA Program curriculum with a free CFA diagnostic exam

When to Take CFA Practical Skills Modules

CFA candidates can take a Practical Skills Module anytime after registering for an exam window. The requirement is that candidates must complete one PSM at each level in order to receive their exam results and move on to the next level,

Consider that Practical Skills Modules take about 10-20 hours to complete. The average time CFA candidates spend preparing for an exam is 300 hours. Therefore, taking a Practical Skills Module shortly after sitting for an exam is the best route and can help avoid burnout. And doing so will not distract you from your exam preparation.  

When Do CFA Exam Results Come Out? >>

Where to Find CFA Practical Skills Modules

Candidates can find CFA Practical Skills Modules in their CFA Institute candidate portal under the “My PSMs” account section. The same module cannot be completed at multiple levels so at each exam level a new PSM must be chosen.  

How to Confirm You’ve Completed CFA Practical Skills Modules

Candidates will receive an email confirming they have completed a CFA Practical Skills Module. If they don’t receive a confirmation email they can also check in their CFA Institute account under the “My PSMs” section. In that section of their account, they should be able to see which Practical Skills Modules they have completed.  

Frequently Asked Questions 

Below are answers to some commonly asked questions about CFA Practical Skills Modules.

Which CFA Program Practical Skills Modules are the Hardest?

No CFA Practical Skills Module is harder than the other. It all depends on your previous experience and knowledge of the CFA curriculum. CFA charterholders should be comfortable with all of these topics so if one topic seems harder than the others that is a sign for you to focus on that topic area or skill.   

How Long Does a CFA Program Practical Skills Module Take to Complete?

CFA Practical Skills Modules take candidates about 10 - 20 hours to complete so you might be able to complete them over one weekend. 

What Happens If You Don’t Complete a CFA Program Practical Skills Module?

If you don’t complete one Practical Skills Module at each CFA level before your exam results are released your exam results will be voided and you will be required to sit again at the same level to advance to the next level. 

When is the Deadline for Completing a CFA Program Practical Skills Module? 

The deadline for completing a CFA Practical Skills Module is before your exam results are released. Exam results are typically released 5-8 weeks after you sit for an exam but that timeframe is variable, so it’s best to get your PSM finished well before that time.  

Do You Have to Re-Do a Practical Skills Module If You Fail the Exam?

No, if you fail an exam, you do not have to retake the Practical Skills Module. Only one PSM is required at each exam level.

A frequent topic of discussion among CFA® charter candidates is what’s different between CFA Level I and II? The near-universal consensus is that CFA Level II is a significant step up from CFA Level I in a number of ways.

CFA Level I vs. Level II

The following 10 points outline some of the major differences a candidate will encounter between Level I and Level II of the CFA exam.

Differences Between CFA Level II and Level III »

10) CFA Level II Uses Vignettes

At Level I, questions are normally defined using only a brief self-contained question stem, such as: “The period of time within which a hedge fund must fulfill a redemption request is called…”

At Level II, vignettes are introduced. A vignette can be thought of as a mini-case, where a business scenario is described in several paragraphs using a mix of text, tables, financial statements, and so on. A Level II candidate must develop the ability to quickly scan through a vignette and pick out the pieces of data needed to answer a particular question.

9) CFA Level II Organizes Uses Item-Set Question Format

The CFA Level I exam consists of 180 questions, and each of these questions is unrelated to the others. By contrast, Level II questions are organized as “item sets,” each based on a shared common vignette and containing 4–6 multiple-choice questions. Generally, these questions will all dig into a single topic. This deep dive into individual topics makes it potentially more dangerous to skip a particular reading because each item sets represents 5% of the points on the exam.

8) CFA Level II Allows Less Time to Finish than the Level I Exam

The CFA Level I computer-based exam exam takes 4 hours and 30 minutes, split into two equal sessions of 2 hours and 15 minutes.  The Level II CFA computer-based exam will be 4 hours and 24 minutes, split into two equal sessions of 2 hours and 12 minutes, with an optional break in-between. This means you will need to be even more time conscious when taking the Level II CFA exam. 

7) CFA Level I Exam Topics are Usually Learned During Undergrad

Candidates who tackle the CFA exams have at least an undergraduate degree under their belt, often in business or a related subject. As a result, many Level I candidates begin their studies with a solid understanding of major Level I concepts. However, at Level II, candidates generally find this advantage runs out, and their previous studies provide relatively little direct advantage on exam day.

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6) CFA Level II Exam Test Takers Often Have Less Free Time to Study than Level I Candidates

Many candidates begin studying for the Level I exam when they have a lull in their education, family, or career commitments. Often, candidates find that a year later, when the Level II exam rolls around, they have a new personal situation and a fresh set of distractions related to school, work, or children. These new distractions may require a candidate to double down on their commitment to their CFA Program studies. Candidates can expect to spend on average 25 or more hours studying for the CFA Level II exam compared to the Level I exam.

Can I Take the CFA Level I and CFA Level II Exams Together?

No, you can not take the CFA Level I and Level II Exam together.  As you pursue your CFA designation you have to pass the Level I exam to become eligible to take the Level II exam.

You are only allowed to take the exam two times per calendar year and you can only take one exam every six months. You cannot exceed a total of six attempts per exam level.

5) CFA Exam Topic Weights: Level I Weighs Ethic Scores Heavier than Level II

For the Level I CFA exam, CFA Institute specifies different topic weights than for Level II. All topic weights are expressed in ranges.

Latest CFA Curriculum Updates >>

4) CFA Level I Exam Emphasizes Memorization

In the CFA Level I curriculum, there is a significant focus on rote recall of formulas and definitions. At Level II, memorization is de-emphasized, while greater conceptual understanding is required. Level II CFA candidates are expected to demonstrate their ability to apply tools and relationships to analyze financial data and to value assets. Furthermore, at Level II, a candidate’s ability to link one theory or concept to another will be tested.

3) CFA Level II Exam Material is More Complex

While the Level I CFA exam is broad, most of the Level I material is a straightforward introduction to the concepts covered. The Level II CFA curriculum, by comparison, is not only equally broad but also contains numerous concepts that can be difficult to grasp. For example, swap valuation, CDS valuation, binomial options valuation, and Black–Scholes–Merton can all be mind-boggling topics.

2) CFA Level II Exam Increases Question Difficulty

Not only are Level II CFA concepts generally more complex, but the questions on the Level II exam also require more concentration. Compared to Level I, a candidate will need a higher level of preparation and skill to select the correct answer to a Level II question. Every topic is tested to a more sophisticated standard. A Level II CFA aspirant might believe that because they studied the CFA Institute Code of Ethics and Standards at Level I, they don’t need to revisit the CFA Level II notes and materials again. This would be a mistake. In Level II Ethics, the same content is tested but at a much more difficult level.

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1) There are Far More CFA Level I Candidates than Level II Candidates

Perhaps the biggest difference between Level I and Level II is “almost anybody” can sign up for the Level I CFA exam, while only candidates who have conquered the Level I exam can enroll to sit for the Level II exam. As a result, 100% of candidates sitting in the Level II section on exam day are serious about the exam process and have demonstrated an ability to correctly answer questions about CFA exam topics. In short, the competition at Level II is far higher because all the candidates have earned their right to be there.

CFA Level I Exam Practice Quiz

CFA Level II Exam Practice Quiz

Next Steps or CFA Level I or Level II Candidates

Now that you understand the extra level of effort the Level II exam requires, put your trust in the expertise Kaplan Schweser offers by browsing our CFA study materials.

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Feeling Ready For The Exam?

• Start Your CFA Exam Level II Prep Early
  
• How Much to Study for CFA Exam Level II
  
• Review CFA Institute’s Learning Outcome Statements (LOS)
• CFA Level II Practice Questions Quiz
  
• Know CFA Exam Level II Weights and Curriculum
  
• Learn the CFA Exam Level II Question Format
  
• Recommended CFA Exam Level II Prep Breakdown
  
• Learn How to Take the CFA Exam Level II
  
• Apply Level II CFA Concepts to Real Life
• Last-Minute Level II CFA Exam Study Tips
• Can You Pass CFA Level II with Self Study

Start Your CFA Exam Level II Prep Early

How Much to Study for CFA Exam Level II

How Many Study Sessions Do You Need for CFA Level II Exam Prep?

You should engage in 80-100 study sessions across your six to nine months preparing for the Level II CFA Exam. We arrived at this range because most CFA Candidates prefer to prep for a few hours, almost every day of the week. If your preference is to take more frequent days off from your prep, you can engage in fewer study sessions than that.

However, keep in mind that if you were to only engage in 60 study sessions, then you will need to average 5.5 hours per study session in order to meet the minimum suggestion of 325 total hours studying. The more often you sit down for a study session, the less demanding each individual study session will be.

Review CFA Institute’s Learning Outcome Statements (LOS)

CFA Level II Exam Quiz

Answer these five questions to test your readiness for the Level II Exam.

Know CFA Exam Level II Curriculum and Weights

• Quantitative Methods 5–10%
  
• Economics 5–10%
  
• Financial Reporting and Analysis 10–15%
  
• Corporate Issuers 5–10%
  
• Equity Valuation 10–15%
  
• Fixed Income 10–15%
  
• Derivatives 5–10%
  
• Alternative Investments 5–10%
  
• Portfolio Management 10–15%
  
• Ethical and Professional Standards 10–15%

Learn the CFA Exam Level II Question Format

Level II CFA Exam Prep: Reading & Lectures [PREPARE]

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Feeling Ready For The Exam?

The Level III CFA exam is a considerable step up from the Level II exam so having a CFA study plan and understanding the differences between Level II and Level III will help ensure you are prepared to pass the Level III exam.

To pass the exam, you will need to achieve at least the minimum passing score (MPS) set by the Board of Governors of CFA Institute after each exam. The all-time average CFA Level III pass rate is only 56%, and recent pass rates have been even lower. That means you must have a study plan and adhere to it.

TABLE OF CONTENTS:

• Start CFA Exam Level III Prep Early
• How Long To Study for CFA Exam Level III
• Review CFA Institute’s Learning Outcome Statements (LOS)
• CFA Level III Practice Questions Quiz
• Know CFA Exam Level III Weights and Curriculum
• Learn the CFA Exam Level III Question Format
• Recommended CFA Exam Level III Prep Breakdown
• Learn How to Take the CFA Exam Level III
• Apply Level III CFA Concepts to Real Life
• Last-Minute Level III CFA Exam Study Tips
• Can You pass CFA Level III with Self Study

Start Your CFA Exam Level III Prep Early

Starting early to prepare for the Level III CFA Exam means beginning to prepare six-to-nine months before your exam day, and be finished three months out from your exam date. Many successful CFA charterholders credit their study routine for their success in taking the CFA exams.

Not only do you need to study the CFA Level III notes and materials, but you also need to be able to apply what you learned to scenarios on the exam. This level of understanding and practical application takes time to develop. Therefore, you must get into a study routine early and stick to it.

How Long to Study for CFA Exam Level III?

Across the six-to-nine months that you should spend studying for the CFA Level III exam, you should plan to devote at least 344 total hours (the average study time) to your Level III prep. If that number seems daunting to you, then consider spreading your studies across nine months instead of six.

That way, you would only need to devote roughly 1 hour and 25 minutes per day (on average) to your Level III prep (versus closer to 2 hours per day). Prep for longer periods on certain days to earn yourself an occasional day off from studying.

How Many Study Sessions Do You Need for CFA Level III Exam Prep?

You should engage in 80-100 study sessions across your six to nine months preparing for the Level IlI CFA Exam. We arrived at this range because most CFA Candidates prefer to prep for a few hours, almost every day of the week. If your preference is to take more frequent days off from your prep, you can engage in fewer study sessions than that.

However, keep in mind that if you were to only engage in 60 study sessions, then you will need to average 6 hours per study session to meet the minimum suggestion of 344 total hours studying. The more often you sit down for a study session, the less demanding each study session will be.

Review CFA Institute’s Learning Outcome Statements (LOS)

Your focus should be on the Learning Outcome Statements (LOS) from the CFA Institute because they detail exactly what you are expected to do on exam day.

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CFA Level III Exam Quiz

Answer these five questions to test your readiness for the Level III Exam.

Know CFA Exam Level III Curriculum and Weights

Level III is a computer-based, 4 hours and 24 minutes, split into two equal sessions of 2 hours and 12 minutes, with an optional break in between. The first session of the CFA Level III exam is comprised of 8 to 11 vignettes followed by several questions that require a written response.  There will be some multiple-choice questions in this session, as well.  There also may be some numerical entry questions, where only a number is required, with no opportunity to show work.  The majority of the questions though will be traditionally essays. 

The topics covered, with their exam weights, are:

• 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%

Learn the CFA Exam Level III Question Format

The big difference with Level III is the format of the exam and specialized pathways. The format of the Level III exam contains both the vignette-style item set questions seen at Level II, but also includes constructed response (essay) sets.

In these vignette question sets, you may be asked a multiple-choice question to select the portfolio (A, B, or C) that meets a particular objective, followed by an essay question to justify that response. Candidates’ responses to constructed response questions require a higher degree of specificity.

The constructed response question sets have a variable number of parts, and each part varies in length. The point of this format is to test your ability to apply and use judgment and follow a prescribed path, which is what CFA charterholders have to do for their clients and firms. No client is going to benefit from your ability to recall factoids from memory; they are relying on you to make the right decisions for them based on their situations and needs and your knowledge of finance and investment.

You might have noticed how much weight is to Asset Allocation and Portfolio Construction. If you don’t pass them, you aren’t likely to pass the exam. Here’s an important tip to remember for structuring your study: except for ethics, all Level III exam topics relate to portfolio management.

Recent Level III Exam Format Changes

Recommended CFA Exam Level III Prep Breakdown

Level III CFA Exam Prep: Reading & Lectures [PREPARE]

Level III CFA Exam Prep: Practice Questions [PRACTICE]

Debriefing Is a Critical CFA Level III Exam Study Strategy

Start your debrief by making sure the questions you got right were correct for the right reasons. Guessing right on exam day is a bonus. Up until then, it’s just another question that you need to review. For all wrong answers and guesses that resulted in a correct answer, it is crucial to find the area of the curriculum that let you down. If it’s a missed calculation, find at least five examples of that type of calculation.

CFA Program Examiners are masters of hitting calculations from every angle. Just correcting the single instance which that question hit may not address the deeper issue. Your aim is to repeat the calculation multiple times until you can do it backward (which is incidentally a popular CFA examiners’ trick). Kaplan Schweser’s CFA Level III Qbank is a great way to learn question debriefing.

CFA Level III Resit Strategies

Passing this rigorous and comprehensive exam is no easy feat. For those who have faced the disappointment of not passing, hope is not lost. Below we offer some tips for when it comes to retaking the Level III exam.

Different Forms of Level III CFA Exam Question Debriefing

CFA Exam Level III Prep: Mock Exams [PERFORM]

The CFA Institute will give you one mock exam, and you can purchase others with exam prep providers like Schweser. The Schweser Online Level III Mock Exam includes an exam sim mode that uses the same interface as the actual computer-based exam.

It also includes a multimedia tutorial that takes you through each question and helps you understand where the answer comes from, the calculations required, and what terms they are testing you on. This helps to fill in your knowledge gaps and give you an idea of how you should pace yourself during the actual exam.

Learn How to Take the CFA Exam Level III

Looking for more help passing Level III of the CFA exam? Check out our Level III study packages.

Apply Level III CFA Exam Concepts to Real Life

Last-Minute Level III CFA Exam Study Tips

Use these last-minute study tips to keep you feeling motivated and prepared during the last few weeks leading up to the exam.

1: Practice Constructed Response Questions

If you haven’t already started practicing Level III constructed response questions, now is the time. These types of questions require test-takers to provide longer, written answers vs. multiple-choice answers. It is a unique question format that you will only face on the Level III exam. 50% of the Level III exam consists of constructed response format so this is crucial to your success.

2: Pay Attention To How You Are Feeling

You’ve spent a lot of time getting to this point and this last exam can test your mental stamina in ways you haven’t experienced before. Don’t let your fatigue take control and convince you to start taking shortcuts or lose focus. If you feel this happening, stop, take a day off and do something you enjoy. Allow yourself to reset and remember, that you are almost there.

3: Focus on Time Management

When you start taking CFA mock exams, keep track of how long it takes you to read vignettes and answer questions. If you notice you're taking too long to read the question, try skipping ahead to find one that you understand right away. Answers those ones first and then go back to the ones that were giving you a hard time. 

4. Use Mock Exams to Test Your Readiness

Take a CFA mock exam a week out from your actual exam to simulate what taking the exam will be like and what your score could be. If you're on the brink of a minimum passing score, pay special attention to Asset Allocation and Portfolio Construction. Both topic areas can put you over the top due to their combined large topic weight (30-40%). 

5: Keep Summary Notes

As you evaluate your practice exam performance, try using a spreadsheet to keep track of the questions and topics you are struggling with. Create a column on this spreadsheet for summaries about what you were thinking that led you to this incorrect answer and use this data to help you identify which topics you still need to work on. 

6: Don’t Be Afraid to Ask For Help

It’s understandable to feel overwhelmed and anxious about preparing for the Level III CFA exam. This exam can really test your readiness and stamina. If you don’t understand how to do something or just need some advice contact Kaplan Schweser. 

Candidates that take advantage of Kaplan Schweser instructor-led review workshops can get direct expert guidance all the way up to exam day.

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Feeling Ready For The Exam?

Understanding and being able to apply appropriate ethical and professional standards is a critical skill for a successful CFA charterholder. The Ethical and Professional Standards topic on the CFA Level I exam is substantial and continues to be for each exam level.

• Ethics and Trust in the Investment Profession
• Code of Ethics and Standards of Professional Conduct
• Guidance for Standards I–VII
• Introduction to the Global Investment Performance Standards (GIPS)
• Ethics Application

How To Study for the CFA Level I Ethical and Professional Standards Topic

Start off by reading Schweser’s CFA Level I SchweserNotes and watching the Module Videos alongside these, as the explanations will really help bring the material to life which will be imperative for your exam technique. 

You must read the Standards of Practice Handbook from beginning to end and it would be sensible to reread this just prior to your exam too.

Practice as many questions as you can while checking your understanding, retention, and application. It can’t be emphasized enough, if you neglect the question practice, it will be like going into a driving test never having sat in a car before, but just having read about them.

CFA Level I 6-Month Study Plan

What is a Learning Outcome Statement (LOS) for the CFA Exam?

Learning Outcome Statements while studying for a CFA exam refer to specific skills and concepts you should possess within an exam topic whereas exam topics describe the broader body of knowledge you should have. For example, the Ethical and Professional Standards exam topic at Level I has lots of LOSs that you’ll need to learn

An example of a CFA LOS for Ethical and Professional Standards is “describe a framework for ethical decision making.”

Why CFA Candidates Need To Learn Ethical and Professional Standards

As a candidate for the CFA designation, you are bound by the Code of Ethics and Standards of Professional Conduct. It is therefore your responsibility to ensure you understand the content and can apply it to different scenarios, understanding whether an action is a violation, and giving appropriate advice. While they may be fictional scenarios in the exam, it is likely you will come across a wide range of these during your career.

Assess your baseline knowledge of the Level I CFA Program curriculum with a free CFA diagnostic exam

How Much of the CFA Exam Tests Ethical and Professional Standards? 

The Ethical and Professional Standards topic represents 15-20% of the Level I exam, meaning approximately 27-36 questions. It is the first topic to be tested in the morning session and is tested standalone (before moving onto the Tools Functional Area which covers Quantitative Methods, Economics, and Financial Statement Analysis). 

Is the CFA Level I Ethical and Professional Standards Topic Hard?

The content of the Code and Standards should not be tricky to understand, however, the skill across all three levels is being able to apply what you have learned to scenarios. Ethics and Professional Standards is historically a challenging curriculum topic for under prepared candidates.

The key to this is question practice, question practice, and more question practice. Don’t underestimate the importance of keeping this practice ticking along while you get bogged down in other more technical curriculum areas.

Try Today’s Featured Level I Practice Question

When Should CFA Level I Candidates Study Ethical and Professional Standards?

Ethical and Professional Standards is the final syllabus topic so if you are following the readings chronologically, this will be the last one you study for. It may be sensible to take a brief look at it (reading the SchweserNotes and watch the Module Videos, for example) to understand what you have to come, but it will be crucial to revisit it multiple times in the run-up to your exam. 

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2024 CFA Level I Ethical and Professional Standards Topic Readings

Below are overviews of each Level I Ethical and Professional Standards reading and what you are expected to learn.

Ethics and Trust in the Investment Profession

What is ethics, and ethical behavior and why does the profession need a code of ethics? All of these are covered in this reading. While short, it sets the scene for readings to come and does contain testable material.

Code of Ethics and Standards of Professional Conduct

The Code of Ethics identifies six components which are mandatory behaviors for members of the CFA Institute and candidates for the CFA designation to follow, and there are seven Standards of Professional Conduct. These are all listed in this reading, and you will be expected to know the ethical responsibilities required by each section. 

Guidance for Standards I–VII

The Code and Standards introduced in the previous reading and discussed in more detail here, which provide more examples to help a candidate demonstrate how to apply the Code and/or Standard, recommend practices and procedures to prevent violations, and identify conduct that confirms or violates the relevant Code and/or Standards. 

It’s likely the majority of the exam questions will draw on skills learned in this reading alongside the final reading of the topic.

Introduction to the Global Investment Performance Standards (GIPS)

Compliance with GIPS for firms reporting investment performance is voluntary, and for Level I you are expected to know why they were created, who can claim compliance, and who benefits from compliance. This reading will explain the key concepts, and how a firm can verify compliance. 

Ethics Application

Using the knowledge from the ‘Guidance for Standards I-VII’ reading, this reading gives detailed scenarios to illustrate how the Code and Standards is (or is not) applied in practice. 

Review Ethical and Professional Standards Concepts with Free Flashcards

CFA Level I Exam Practice Questions

Answer these 5 questions to test your readiness for the Level I Exam.

Can You Pass the CFA if You Fail Ethical and Professional Standards?

Theoretically, there is nothing stopping you from passing CFA Level I if you fail the Ethical and Professional Standards topic. You will of course have to compensate and score highly in the other areas though. 

The danger comes if you are sat at the borderline between passing and failing, in which case Ethical and Professional Standards becomes one of the key deciding factors for the CFA Institute, and the examiners won’t look too fondly on someone who has not passed this topic area.

Is the Ethical and Professional Standards Topic the Same for CFA Level I and Level II?

Ethical and Professional Standards is 10-15% of the Level II exam, and the same again for Level III. As noted above, this is a crucial area to be able to score well in. 

The Code of Ethics and Standards of Professional Conduct are ultimately the same as at Level I, and the focus of the exam questions is again on applying your knowledge to a scenario. However, the questions will likely be even more nuanced at Level II - questions are presented in item sets, meaning 4 separate questions will all relate to one scenario. 

Ready To Start Preparing For Ethical and Professional Standards?

Looking for more guidance on how to prepare for Ethical and Professional Standards? Enroll in one of our CFA Level I Premium study packages to receive expert instruction, CFA Program study materials, and more. Give yourself the best chance to prepare, practice, and perform on the CFA exam.

Keep Reading For More CFA Level I Topic Overviews

• Quantitative Methods
• Economics
• Corporate Issuers
• Financial Statement Analysis
• Equity Investments
• Fixed Income
• Derivatives
• Alternative Investments
• Portfolio Management

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Although the Alternative Investment topic on the CFA Level I exam is relatively minor, it still carries weight in your overall score. Therefore, gaining a solid grasp of the foundational concepts and calculations for Level I will also be essential for preparing you for Level II.

• Categories, Characteristics, and Compensation Structures of Alternative Investments
• Performance Calculation and Appraisal of Alternative Investments
• Private Capital, Real Estate, Infrastructure, Natural Resources, and Hedge Funds

Types of Alternative Investment Funds

The Alternative Investments which are included in the CFA Level I syllabus are:

• Private Capital
• Real Estate
• Commodities
• Infrastructure
• Natural Resources
• Hedge Funds

The broader definition includes any investment which doesn’t fall under the heading of traditional investments, which refers to long-only investments in cash or publicly traded stocks and bonds.

How To Study for CFA Level I Alternative Investments Topic

Alternative Investments is a short topic area in the CFA curriculum. The readings are laid out logically: 

• A broader introduction to Alternative Investments
• A look at the return calculations
• Then a look at the key characteristics of different types of Alternative Investments 

After studying each reading, practice as many questions as you can using QBanks to test your understanding of this topic. Since it’s a small section of the exam, don’t forget to dedicate at least a week to your study plan for Alternative Investments.

CFA Level I 6-Month Study Progress Tracker

What is a Learning Outcome Statement (LOS) for the CFA Exam?

Learning Outcome Statements while studying for a CFA exam refer to specific skills and concepts you should possess within an exam topic whereas exam topics describe the broader body of knowledge you should have. For example, the Alternative Investments exam topic at Level I has a small number of LOSs that you’ll need to learn. 

An example of a CFA LOS for Alternative Investments is “describe issues in performance appraisal of alternative investments.”

Why CFA Candidates Need To Learn Alternative Investments

As an analyst, it is important to have an understanding of a broad range of possible investment options in order to make suitable investment decisions. Over the last decade in particular the Alternative Investments market has grown significantly and continues to do so.

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How Much of the CFA Exam Tests Alternative Investments?

The Alternative Investments topic represents 7%-10% of the Level I exam, which is approximately 9-14 questions. It is tested in the afternoon session, within the Assets Area, alongside Equity Investments, Fixed Income, and Derivatives.

Calculator Basics for the CFA Level I Exam

There are no specific calculation functions to learn for Alternative Investments but do make sure you spend the time practicing the fee calculations within the second reading.

CFA Level I Exam Practice Questions

Answer these 5 questions to test your readiness for the Level I Exam.

Is the Alternative Investments Topic the Same for CFA Level I and Level II?

Alternative Investments is a similar weight on the Level II exam compared to the Level I exam. Level II builds on the foundations learned at Level I to focus:

• Real Estate
• Private Equity
• Commodities

What Are the Best Notes for Studying Alternative Investments?

We would recommend starting off by reading the SchweserNotes for Alternative Investments, which also provide illustrative examples and Module Quizzes for you to test your understanding. Once you have covered the material, you should cover as many other questions as possible from our range of resources such as the Schweser QBank.

Ready To Start Preparing For Alternative Investments?

Looking for more guidance on how to prepare for Alternative Investments? Enroll in one of our CFA Level I Premium study packages to receive expert instruction, CFA Program study materials, and more. Give yourself the best chance to prepare, practice, and perform on the CFA exam.

Keep Reading For More CFA Level I Topic Overviews

• Quantitative Methods
• Economics
• Corporate Issuers
• Financial Statement Analysis
• Equity Investments
• Fixed Income
• Derivatives
• Portfolio Management
• Ethical and Professional Standards

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Feeling Ready For The Exam?

Although derivatives are a small part of the CFA Level I exam, it’s present at all three levels so it’s important for you to gain a solid understanding of the fundamental concepts at this stage of your candidacy.

• Derivative Markets and Instruments
• Forward Commitment and Contingent Claim Features and Instruments
• Derivative Benefits, Risks, and Issuer and Investor Uses
• Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives
• Pricing and Valuation of Forward Contracts and for an Underlying with Varying Maturities
• Pricing and Valuation of Futures Contracts
• Pricing and Valuation of Interest Rates and Other Swaps
• Pricing and Valuation of Options
• Option Replication Using Put-Call Parity
• Valuing a Derivative Using a One-Period Binomial Modal

How To Study for CFA Level I Derivatives Topic

Derivatives can be an abstract topic if it's not something you’ve studied or experienced before. Each LOS reading for derivatives is relatively short compared to the rest of the CFA curriculum. It’s also weighted low on the exam alongside Portfolio Management and Alternative Investments. 

Take each reading in turn and focus on understanding the concepts and terminology used, making sure you’re happy with the differences between the different types of derivatives. 

CFA Level I 6-Month Study Plan

What is a Learning Outcome Statement (LOS) for the CFA Exam?

Learning Outcome Statements while studying for a CFA exam refer to specific skills and concepts you should possess within an exam topic whereas exam topics describe the broader body of knowledge you should have. For example, the Derivatives exam topic at Level I has lots of LOSs that you’ll need to learn. 

An example of a CFA LOS for Derivatives is “describe the basic features of derivative markets, and contrast over-the-counter and exchange-traded derivative markets.”

Why CFA Candidates Need To Learn Derivatives

Alongside Alternative Investments, the Derivatives topic introduces investment possibilities to candidates beyond the typical Equity and Fixed Income markets. This may be an area you have been exposed to already in your career, but if not, it’s likely to be something you come across later on. It is present at all three levels of the CFAI curriculum and will help your broader understanding. 

Assess your baseline knowledge of the Level I CFA Program curriculum with a free CFA diagnostic exam

How Much of the CFA Exam Tests Derivatives?

The Derivatives topic represents 5%-8% of the Level I exam, meaning approximately 9-15 questions. It is tested in the afternoon session, within the Assets Functional Area, alongside Equity Investments, and Fixed Income.

Is the CFA Level I Derivatives Topic Hard?

The level and quantity of technical content tested at Level I for Derivatives is a lot less than for Topics such as Fixed Income. However, if it is something you have no prior knowledge or experience with, then many candidates do find Derivatives challenging to start with, as it can feel quite abstract in nature. 

Focus on understanding the different types of derivatives and the key terminology which will be crucial for the exam. Remember the small weighting and try not to get too bogged down in the calculations which will only form a very small part of your exam.

Try Today’s Featured Level I Practice Question

When Should CFA Level I Candidates Study Derivatives?

Derivatives is a standalone topic, so it can be studied at any point. Some candidates like to study Derivatives alongside the other topics it is tested on exam day:

• Equity Investments
• Fixed Income
• Alternative Investments

This helps understand the differences (and similarities) between the different assets. Make sure you study Derivatives after Quantitative Methods as the Binomial Model techniques will be mentioned again here.

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2024 CFA Level I Derivatives Topic Readings

Below are overviews of each Level I Derivatives readings and what you are expected to learn.

Derivative Markets and Instruments

A derivative is a security that derives its value from the value of another security or a variable (such as an interest rate). This reading introduces us to key terminology used within this Topic, alongside the differences between over-the-counter and exchange-traded derivative markets.

Forward Commitment and Contingent Claim Features and Instruments

This reading begins by defining the four key types of derivatives. It covers how to calculate the value and profit/loss on a call or put option, and compares forward commitments to contingent claims (such as options).

What are the 4 Types of Derivatives?

The four key types of derivatives included in the CFA syllabus are:

1. Forwards
2. Futures
3. Options
4. Swaps

Derivative Benefits, Risks, and Issuer and Investor Uses

What attracts investors to derivatives? This reading looks at the benefits and risks of derivatives compared to traditional investments, and how different issuers and investors use them. 

Arbitrage, Replication, and the Cost of Carry in Pricing Derivatives

This is an important reading which introduces two key terms - the concept of arbitrage (or more specifically, the fact that the valuation of derivatives is based on ‘no-arbitrage’), and replication. You will also learn about how the cost of carry accounts for some of the difference between spot and expected future prices. 

Pricing and Valuation of Forward Contracts and for an Underlying with Varying Maturities

The first of four readings focus on specific derivatives. This is where you will learn how to calculate the value and price of a forward contract at initiation, during its life, and at expiration. 

Pay particular attention to the difference between the definitions of value and price. This reading also covers how to determine a forward rate, given various other spot and forward rates.

Pricing and Valuation of Futures Contracts

The focus again here is on the calculation of the value and price of a futures contract at various points in its life and comparing and contrasting this with forward prices. 

Pricing and Valuation of Interest Rates and Other Swaps

Swaps can be described as a series of forward contracts, and this reading looks at this in more detail as well as considering the value and price of a swap (although not in as much detail as in the Forwards reading). 

Pricing and Valuation of Options

The final pricing and valuation reading looks at options and various terminology used such as exercise value and moneyness. It looks in detail at the factors which affect the value of an option (such as the volatility of the underlying asset), as well as brings in the arbitrage and replication concepts introduced earlier.

Option Replication Using Put-Call Parity

Building on the replication from the previous reading, you will learn some formulae here to help answer put-call parity questions in the exam. This is then expanded to introduce the put-call forward parity formula which can also be examined.

Valuing a Derivative Using a One-Period Binomial Modal

A somewhat standalone reading to end the Topic, you are introduced here to the binomial model which is used to value a derivative. This model was introduced in Quantitative Methods so may be familiar, and will be used in more detail at Level II. 

Review Derivatives Concepts with Free Flashcards

Calculator Basics for the CFA Level I Exam

There are no specific calculation functions to learn for Derivatives but do make sure you spend the time practicing and familiarizing yourself with the various formulae throughout this Topic (paying particular attention to the addition and subtraction signs.)

CFA Level I Exam Practice Questions

Answer these 5 questions to test your readiness for the Level I Exam.

Is the Derivatives Topic the Same for CFA Level I and Level II?

The Derivatives topic is a similar size on the Level II exam as the Level I exam. The focus for Level II is on pricing and valuing forward commitments and contingent claims, which were briefly introduced at Level I.

What Are the Best Books for Studying CFA Derivatives?

We would recommend starting off by reading the Schweser CFA Level I SchweserNotes for Derivatives, which also provide illustrative examples and Module Quizzes for you to test your understanding. Once you have covered the material, you should cover as many other questions as possible from our range of resources such as the Schweser CFA Level I QBank.

Ready To Start Preparing For Derivatives?

Looking for more guidance on how to prepare for Derivatives? Enroll in one of our CFA Level I Premium study packages to receive expert instruction, CFA Program study materials, and more. Give yourself the best chance to prepare, practice, and perform on the CFA exam.

Keep Reading For More CFA Level I Topic Overviews

• Quantitative Methods
• Economics
• Corporate Issuers
• Financial Statement Analysis
• Equity Investments
• Fixed Income
• Alternative Investments
• Portfolio Management
• Ethical and Professional Standards

Get Access

Take a free diagnostic exam

Feeling Ready For The Exam?