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How To Pass the CFA Level II Exam

Make a Study Plan, Practice Tests, Talk to Other CFAs


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Many financial analysts and CFA students take the CFA Level II exam. For some students, sitting for Levels I and III have intense emotional meaning: passing Level I allows the student to take the Level II exam. However, the student must pass Level II to have the opportunity to pass the final exam(CFA Level III). After passing the CFA Level III, the student may use the CFA Institute marks and use “CFA” after his name on stationery and documents.

Passing Level I is cause for celebration, and passing Level III is reason for passing students to celebrate with a night on the town! CFA Level II is an important exam between the initial qualifying exam and the final CFA test. That’s why only about two-thirds of the CFA students pass Level II, according to the CFA Institute!

Students sitting for all levels of the CFA examination process reach for targeted study materials. A variety of companies publish expensive materials to assist students in absorbing the CFA curriculum. The best way to study the CFA Level II, according to several hundred recently minted CFAs, is to study the CFA Level II Study Guide provided by the CFA Institute.

Practice taking mock CFA Level II exams to understand how the test is designed. The CFA Level II exam consists of 120 questions administered in two sessions. Each session lasts three hours. Upon presentation of 10 hypothetical case studies, the student answers multiple choice questions (usually on a best answer basis).

Topics for the exam are provided in the study material. Preparing to pass the exam includes understanding asset valuation, investment tools, portfolio management, and ethical and professional standards established by the CFA Institute:

  • The Candidate Book of Knowledge helps the student prepare for up to 15 percent of the CFA Level II exam score. The focus of the book is ethical and professional standards established by the CFA Institute.
  • The student’s ability to understand investment tools represents up to 45 percent of the CFA Level II exam score. The student must understand economics, corporate finance, financial statements and analysis, and quantitative analysis tools.
  • Asset valuation, or the ability to determine the value of a broad variety of financial assets, accounts for up to 45 percent of the CFA Level II exam score. Understanding equities (stocks), fixed income instruments (such as bonds), and derivatives (such as options or structured products) is essential to passing this part of the exam.
  • The student must demonstrate an understanding of portfolio management theory and practice. This section represents up to 15 percent of the total CFA Level II score.

Get enough rest during the week before the CFA Level II exam. If you’ve maintained a disciplined study plan prior to the exam date, you’re ready to take the exam. Although the CFA Institute says the body of the CFA Level II exam changes each and every year, the information needed to pass the exam doesn’t change in any drastic way. Taking mock exams helps you gauge the amount of time necessary to analyze each question.

Don’t let fears derail your confidence! If you’ve put in the study time, taken mock exams, made flash cards, and ventured into long question and answer sessions with buddy CFA students or charter holders, you’re ready to take the exam!

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