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You have just finished CFA Level I and you are confident that you will score well. But in the back of your mind, behind all the high hopes for the result of Level I, lurks your fears for the next step. It is no secret that CFA Level II is notoriously the toughest.

Most students who have passed it have had to take them more than once. Looking at the last ten years, the rate for passing Level I is about 40%. So for every 100 people appearing for the exam only 40 people get through. Reduce this to 16% to 18% for Level II out of those who passed the first level.

But at the end of the day, it’s an exam just like the others. If you plan ahead and pay attention to some basic pointers, you can relax and focus on studying rather than feeling scared. Here are a few methods for getting an edge over CFA level II:

1. Change Your Approach

Out of the 240 questions in Level I, about 100 required you to remember facts to get through. But remembering is not going to help a lot in the Second Level, so the approach to the material has to focus more on analysing, understanding and applying than mere remembering. Analyse, understand and apply. That is the key here.

But that’s not all.

You will also need to evaluate and create. This exam requires an in-depth understanding of your subjects rather than just your opinion on existing norms. Later, you might also be asked to design or create a particular model for a small company or start-up.

This all sounds intimidating, and perhaps it is. But if you apply a fresh, structured approach things will seem more manageable.

Level I focused on investments while the second level focuses on evaluating, so you’ll want to work a lot more on your analytical skills.

2. Begin Early

CFA Level II exams might have been pushed to December 2020, but that does not mean that you need to relax. Many students make the mistake of underestimating the time they need to prepare.

Start making yourself familiar with the study material for Level II as early as possible. There is a lot of ground to cover here: about 17 study sessions, 6 volumes and loads of extra material. So if you start early, you will be better familiarized with the content. You can recognize what subjects you are better in and focus on the others.

Many students begin studying in the last three months and try to study for more than 10 hours per day, resulting in burn out. Remember that you’ll perform at your best in an exam when you have a fresh, relaxed mind.

Here is a list of subjects you need to cover:

  • Economics
  • Financial reporting and analysis
  • Ethical and professional standards
  • Portfolio Management
  • Derivatives
  • Equity valuation
  • Corporate finance
  • Alternative income
  • Fixed income
  • Derivatives
  • Quantitative methods

Recognize the chinks in your armor early and get ready to fix them! Sometimes it gets harder to memorize while trying to speed up your pace due to lack of time.

There are many courses that are being offered online to prepare for Level II exams that can help you. 

3. Familiarize Yourself with Question Formats

The format in Level II of CFA is going to be considerably different from Level I, so making friends with it is a good idea.

In this level the questions are organized in item sets. These sets can be about one subject or a mixture of all. There is no way to tell, really. Each of these sets contains a vignette or a “short story” or Essay followed by six questions (Remember your English comprehension test?)

These items sets are further divided into 10 each for the Morning and the Afternoon session.

4. Develop a Strategy

Out of the topics required for Level II CFA, some carry less weightage than the others. Most people that we spoke with suggested that one should start with the lowest weightage topics first. For instance, topics with the weightage of about 5% or 10%. Once they have gone through or mastered these, they can move on to the other, heavier topics.

The reason given is that if you read the denser topics early, then by the time the actual exams arrive, you might have forgotten some of those topics.

On the other hand, sometimes forgetting even the seemingly less important subjects might swing the odds against you.

What we would suggest is to first start off reading the tougher subjects that are worth more. Some of it can be difficult to dissect, so it’s important to have gone through it at least once. When you have a reasonable understanding of these subjects, you can move on to the easier ones. But make sure you come back to the bigger topics towards the end of your preparation time. 

This is just another reason why planning to start studying far enough in advance will come in handy. You’ll have the time you need to review subjects again without the pressure of last-minute cramming. 

Here is one suggested strategy you can try. See if it works for you.

Group I

Group I Strategy: 

This has all the Assets (except Equity). The reason these have been chosen in this manner is that this offers good flow and continuity between the subjects.

Group II

Group II Strategy:

This forms the core of Level II. Starting with Corporate Finance brings out the linkage between the subjects.

Group III

Group III Strategy:

Once again the continuity this method offers is good. As the main focus of Level II should be understanding the topics to apply.

One thing you might have noticed is the presence of Ethics in all categories. This is a subject which, arguably, takes more ‘application’ than the others. Most students end up not doing well in it. There will be questions with options that would sound the easiest but would be ‘shady’. The trick is to choose the least shady option or most shady, depending on the question. Throwing in a little bit of Ethics along with the other subjects would go a long way to achieve the desired results.

Here is another set of tables made on the basis of how difficult a subject is:

Group I

Group II

Group III

As you can see that this second group of tables is markedly different in approach from the first one. These two tables, made by two experienced CFA Level II tutors have been included to show that there is no one approach. What you find tough, someone else might find easier. 

We recommend the first approach to studying these subjects as it’s based on their connectivity and weight is more pragmatic.

5. Choose Your Tutorials Wisely

You are going to need all the help you can get so if you are taking it from an external source, do it wisely.

There are many courses available on sites like Udemy and Coursera to help you navigate the dense world that is CFA Level II. These are courses made by experienced teachers and corporate workers, which guide you on your journey to understanding and applying your learning.

Visit these sites and shortlist a few courses. As all are available with a few trial classes, select the one which suits you. Each tutor has a different style and pace and maybe, even an area of focus. These courses also come with a 100% money-back guarantee and downloadable content.

6. Break It Up!

Everyone will repeatedly tell you that the amount of material to study is much more here than in the first level. If you try dealing with it all at once, you’ll be left dizzy. So another piece of advice is to break your work into small, manageable sizes.

Make a list and go down it one by one, finishing one task after another. Furthermore, making a list will also organize your reading material and subjects neatly. It can help to take away the psychological burden of dealing with everything and take one significant step at a time.

7. Don’t Underestimate Mock Tests

We have deliberately put this at the bottom of the list for a good reason.

This whole level depends on your understanding and analyzing the subjects rather than memorizing, so it is of little use to go through these at the start. Towards the end of your preparation, though, mock tests become a very important tool. They help you get the hang of what kind of questions to expect and perhaps, more importantly, help you revise too.

Most online courses that we discussed above come with many mock tests, examples, simulations and quizzes. These can make your responses quicker and help you calibrate your expectations from the real test.

8. Don’t Underestimate End of the Chapter Questions

End of the Chapter Questions (EOC) are there for a very important reason. They provide an excellent gist of the chapter that you have read.

There is a suggested strategy to do this too: Horizontal Learning. This means that you pick question numbers at random. 

Say you pick 3 and 7. Now attempt all third and seventh questions from all the topics you have read. The advantage? Your brain becomes accustomed to answering questions in the format of an exam. 

Another important advantage is that your understanding of the questions can expand and deepen as you find new approaches and change your perspective.

9. Additional Study Tips

Here are some short and very doable bonus tactics to prepare:

Use a Whiteboard

Writing always helps you remember better. Most of us are visual learners in this era of the ‘screen’. Use this fact to your advantage.

Voice Memos

Record your understanding of a subject and listen to it while commuting or in free time. This is a great revision trick too.

Make a Schedule

This has to be done early and followed diligently. You could also team up with others who have the same weaknesses as yours and work together to overcome them. Studying in a group can also help to test each other.

Financial Modeling Course for Equity and Valuation

Throw in an additional course on this subject if you can. There is an amazing synergy between this course and subjects such as Corporate Finance, Financial Reporting Analysis, and Equity. 

This would be great to brush up your basics and widen your understanding of these subjects. In many courses, you can even see the revenue of a live company being forecasted.

Reward Yourself

Last but not least, go through that wish list and promise yourself a treat or a trip once the exams are done. You deserve it! It will be important to have a mental break before you move on to the next level. 

Overall, remember this is the career that you have chosen. You have to be in love with the process of learning and testing. If your approach is positive and you can connect to the reason why you started on this path in the first place, you will find great motivation in your heart to fight it out and be victorious.


1. Is CFA level 2 a continuation of CFA level 1?

No, CFA level 2 is a different exam with its own curriculum.

2. How many study sessions do you need for CFA level 2 exam prep?

This depends on the individual, but a good guideline is to budget at least 300 hours of study time.

3. How long does it take to prepare for CFA Level 2?

Again, this depends on the individual. However, a good guideline is to start preparing at least six months in advance.

4. How difficult is it to pass CFA Level 2?

Passing CFA Level 2 is not easy. However, if you have put the time and effort into your preparation, it is achievable.

5. Which CFA level is the hardest?

The CFA Level 3 exam is generally considered to be the most difficult. However, this does not mean that it is impossible to pass – with hard work and dedication, anyone can do it!

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