CFA® Level 2 Exam: Full Breakdown

If you’ve already conquered Level 1 of the CFA® Program, you’re probably wondering what comes next. The CFA® Level 2 exam is where things get more technical, more detailed—and, frankly, a lot tougher. It’s not just about memorizing facts anymore; it’s about applying your knowledge in real-world scenarios.

With a 10-year average pass rate of just 46% (according to the CFA® Institute), Level 2 is considered one of the most challenging stages in the program. The exam centers around case-based questions known as item sets, which require you to analyze and apply investment concepts in depth.

As someone who has reviewed this exam closely, I’m here to break down what you need to know before taking the next big step in your CFA® journey.

Key Takeaways

• Application Over Memorization: The CFA® Level 2 exam emphasizes analyzing and applying knowledge, not just recalling facts.
• Item Set Format: Instead of stand-alone multiple-choice questions, you’ll face “mini cases” called item sets.
• Challenging Topics: Expect a large focus on financial statement analysis, equity investments, fixed income, and portfolio management.
• Study Commitment: Successful candidates typically log 300+ hours of prep and rely on practice questions and mock exams.
• Global Standards: The CFA® Institute uses international financial reporting standards (IFRS) as the default, unless U.S. GAAP is specified.

What Makes the CFA® Level 2 Exam Different?

Level 2 is often described as the hardest part of the CFA® Program. Unlike Level 1, which is more about laying the groundwork, the Level II exam pushes you to apply concepts through item sets. These are short case studies followed by multiple-choice questions that force you to think critically rather than guess quickly.

Each exam session includes 11 item sets, making a total of 22 across two sessions. Out of these, 20 are scored, while 2 are trial sets. That means you’ll face 88 questions in total, but each one is rooted in a vignette that gives context. It’s like moving from flashcards to solving real client cases.

CFA® Fees and Exam Registration

CFA® Exam Format and Structure

Here’s what you can expect on exam day:

• Split Sessions: Each lasts 2 hours and 12 minutes.
• Item Sets: 22 total, 88 multiple-choice questions.
• Scoring: Only 20 item sets count toward your total point value.
• Exam Window: Exams are offered several times per year, and you’ll pick from specific exam dates that fit your schedule.
• Practical Skills Module: You’ll need to complete one module, such as Python or Data Science, to finish this level.

The exam format feels very different from Level 1, and the switch to mini cases takes some adjustment. If you like real-world scenarios, though, it can feel more engaging.

Topics You’ll Face

The CFA® Level 2 exam isn’t shy about piling on the complexity. Here’s a breakdown of the main areas and their topic weights:

• Financial Statement Analysis: 10–15%
• Equity Investments: 10–15%
• Fixed Income: 10–15%
• Portfolio Management: 10–15%
• Ethics and Professional Conduct: 10–15%
• Quantitative Methods, Economics, Corporate Governance, and Alternative Investments: Smaller shares, usually 5–10% each.

As someone who’s reviewed exams across the board, I’ve noticed that Level 2 really leans into investment tools and financial analysis. It’s less about definitions and more about applying knowledge under time pressure.

Preparation and Study Tips

Having a solid study plan is critical. Most candidates I’ve researched put in around 300 hours. That’s a lot of evenings and weekends, but it’s necessary to stay competitive.

Here’s what works best from what I’ve seen:

• Prep course: Study with one of the most recommended CFA® review course providers.
• Practice Questions: Get used to the item set format early.
• Mock Exams: Take full-length practice tests to build endurance.
• Mini Cases: Treat each vignette like a client problem you need to solve.
• Guided Practice: If you can, use structured programs to reinforce weak spots.

I’ve found that students who rely only on reading the material tend to struggle. Practicing with item sets makes all the difference.

Who Should Take the CFA® Level 2 Exam?

This exam is designed for candidates who have already passed Level 1 and want to advance toward earning the CFA® charter. You’ll need a bachelor’s degree or equivalent, and of course, a valid international travel passport to register.

It’s best suited for finance professionals aiming to grow in investment analysis, portfolio management, or corporate roles. If you’re someone who enjoys financial statement modeling, credit analysis, or understanding how interest rates impact fixed income, this level will speak your language.

Final Thoughts

If Level 1 felt like dipping your toes into finance, the CFA® Level 2 exam is where you dive in headfirst. You’ll need to prove you can analyze, evaluate, and apply knowledge in ways that reflect real investment decision-making.

It’s not easy, but if you’re serious about advancing in the CFA® Program, this is your moment to shine. Think of it as the bridge between knowing the rules and playing the game. With enough preparation, you can absolutely cross it.

Stay focused, prep smart, and keep going.

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