The CFA Program includes a series of three exams that are offered in test centers around the world. These three exams — Level I, Level II, and Level III — must be passed sequentially as one of the requirements for earning a CFA charter.
You may register for one exam at a time. Once you have received your exam results, you may register for the next one. If you fail an exam, we encourage you to re-take it.
Exams are offered in English only, in order to ensure global consistency, both in administering the exam questions and in grading candidate responses.
The progressive nature of the three different levels means that the questions at Levels II and III require higher-order thinking than the questions at Level I.
- the Level I exam asks you basic knowledge and comprehension questions focused on investment tools; some questions will require analysis.
- the Level II exam further emphasizes analysis along with applying your knowledge.
- the Level III exam focuses on synthesizing all of the concepts and analytical methods in a variety of applications for effective portfolio management and wealth planning.
The best example of the different cognitive levels required for each exam level is in the area of ethical and professional standards. The ethics curriculum — the Standards of Practice Handbook
— is identical for each exam level. However, you will be presented with different types of questions about this content:
- Level I exam questions typically test your knowledge of the ethical and professional standards.
- Level II exam questions test how you apply those standards to situations analysts face.
- Level III exam questions test how you apply the standards in a portfolio management and compliance context.
The exam formats change along with the learning focus at each level — from multiple choice for Level I, to item set for Level II, and to essay questions and item set for Level III. Select your exam level below to get the details.
Level I Exam Question Format
Each item on the Level I multiple choice exam consists of a stem (question, statement, and/or table) and three choices, A, B, and C.
Two basic formats are used
- Stems using sentence completion with three unique choices
- Stems phrased as questions with three unique choices
Example 1 (Stem using sentence completion)
An analyst suspects that a particular company’s U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. The most likely effect of the appropriate adjustments would be to increase that company’s
A. return on assets.
B. debt-to-equity ratio.
C. interest coverage ratio.
Example 2 (Stem phrased as question)
An analyst suspects that a particular company’s U.S. GAAP financial statements may require adjustment because the company uses take-or-pay contracts. Which of the following is most likely to increase as a result of the appropriate adjustments being made to that company’s financial statements?
A. Return on assets.
B. Debt-to-equity ratio.
C. Interest coverage ratio.
The Level I CFA exam does not use except, true, or false in item stems and avoids the use of not in item stems whenever possible. When appropriate, stems will include one of the following qualifiers: most likely, least likely, best described, most appropriate, most accurate, least appropriate, or least accurate. Each stem supports only one item on the exam.
The Level I CFA exam does not use any of the following choices: all of the above, none of the above, A and B only, B and C only, cannot determine, cannot calculate, or not enough information to determine.
Choices consisting of words or sentences are typically ordered from shortest to longest; choices that are quantitative are ordered from the smallest number to largest number. The choices agree grammatically with the stem; language common to all choices is placed in the stem.
Level II Exam Question Format
The Level II CFA exam consists of 20 item sets — 10 in the morning session of the exam and 10 in the afternoon session.
Item sets are sometimes called “mini-cases.” Each item set on the CFA exam consists of a vignette (or case statement) and six multiple choice items (questions).
The length of a vignette ranges from about 1 page to 2.5 pages. The longer vignettes are those that include several tables of information, such as for a financial statement analysis, statistics, or fixed-income item set. The average length of the vignettes on the exam is about 1.5 pages.
The six items in each item set can only be answered based on the information in the vignette. Hence, the items are not free-standing (as in Level I), but are drawn from the vignette. You will need to read the vignette before answering the items, and you will need to refer back to the vignette for information. The six items can be answered independently of each other, but they do require information in the vignette.
On the Level II exam, you will have a total of 120 items (20 vignettes with 6 items each) compared to 240 multiple choice items on the Level I exam.
The Level II exam is graded for 360 points, corresponding to the number of minutes on the exam. The 120 Level II items are equally weighted, 3 points each, with no penalty for guessing.
Level III Exam Question Format
The Level III exam uses the essay format in the morning, and the item set format, with 10 item sets, in the afternoon.
The Level III exams are graded for 360 points, corresponding to the number of minutes on the exam. At Level III, the morning essay exam is 180 points and the afternoon item set exam is 180 points.
When you are preparing for the Level III item set exam, remember:
- Re-read the formatting conventions for writing multiple choice questions at Level I. These same “best practices” are followed for item set questions at Level III.
- You may mark up your exam book. Circle or underline important information in the vignette and write down your equations or logic. However, only your final answers recorded on the answer sheets are graded.
- Mark your answers on the answer sheet as you complete each question. Some candidates mark their answers in the exam book and wait until the end of the exam to complete the answer sheet. This is not an advisable strategy.
- If you do not know the answer to a question:
- You might be able to eliminate one or more choices based on what you know about the topic. There is no penalty for guessing.
- Use reasoning and logic. The concepts that you know on one topic often apply to another topic.
- Expect to encounter questions that you will not be able to answer correctly. There is a great deal of material to master and exam questions are challenging. Standard setters and the Board of Governors (at all three levels) take account of exam difficulty in setting Minimum Passing Scores. For a full description of how the MPS is established, see The CFA Program: Our Fifth Decade (PDF).
About the Level III Essay Questions
The Level III essay exam is given in the morning session and has a maximum score of 180 points. The essay exam typically has 10–15 questions, and questions may have multiple parts. The point value for each question is provided in the exam.
On the essay section of the Level III exam, you'll see two types of questions:
- One requires that you write your answers on the lined page(s) following the question. For
these questions, label each part of your answer clearly (A, B, C, or i, ii, iii, etc.)
- The other type asks you to provide your answers in a template following the question. Instructions in bold print (immediately preceding the question) direct you to the page number of each template. Essay template placement change (PDF).
Some questions contain a mix of these two question and answer types. Each essay question may have as few as one part or as many as 7-8 parts, so be sure to read and understand how to answer the entire question.
Essay Exam Book Features
Your exam book will contain three features to help ensure you answer all parts of each question in the appropriate place:
- Page one of the exam book lists all of the questions on the exam, and the topic and minutes assigned for each question
- The heading on the page where each question begins states the number of parts in that question and the total number of minutes/points. For example: “Question 2 has two parts (A, B) for a total of 18 minutes”
- Immediately before each subpart that requires a template answer, you will find a statement with the page number of the template. For example: “Answer Question 2-B in the Template provided on page 12”
Make sure you familiarize yourself with the essay exam question formats so that you don't overlook any part of a question. Use the templates to provide your answers in an efficient manner.
The following are some general tips for Level III candidates on the essay exam:
- The published guideline answers on past essay exams are more complete and better written than actual exam answers that receive full credit.
- The published guideline answers may not reflect all alternative approaches to the question that received full or partial credit.
- Answers are graded only on content. They are not graded for language and style.
- Use short phrases and bullet points to save time, but be sure your meaning is clear.
- Handwriting is rarely so poor that the answer cannot be graded.
- Points are awarded for direct answers to a question.
- No points are awarded for general knowledge that is not responsive to the question.
- Do not spend too much time writing an answer. This is particularly tempting when you know the topic well. Formulate a direct response to the command words, and use the amount of time allotted.
- You should expect to encounter questions that you will not be able to answer correctly. There is a great deal of material to master and exam questions are challenging. Standard setters and the Board of Governors (at all three levels) take account of exam difficulty in setting Minimum Passing Scores.
The following are common reasons that graders give for poor candidate performance on the essay portion of the Level III:
- Not responsive to command word list (list, define, etc.)
- Answered a question they wish they had been asked instead of the question that was asked.
- No work shown on a calculation question and the answer is incorrect.
- Hedged on questions that asked for a recommendation and justification (e.g., recommended A, but justified B).
- Neglected to answer part of the question (especially if a several part question). Note that you can still answer part E, even if you do not know the answer to part D.
- Content area experts spent too much time on their area of expertise, leaving too little time for weak areas.
- Providing more items or responses than requested. If a question asks for three factors, only the first three that you list will be graded.