Tips for passing CFA® Program Level III exam
You’ve completed Levels I and II of the CFA® Program – congratulations! And now you’re thinking about Level III. Here are some insights from our graders to help you understand some of the ways in which it will be different to the earlier levels, what examiners are looking for, and how to give yourself the best chance of success.
The three pathways
For Level I and Level II, all candidates study the same curriculum and sit the same exams. But the design of the Level III curriculum and exam was changed recently – 2025 was the first year in which candidates could choose one of three specialized pathways.
The options are:
- Portfolio management
- Private wealth
- Private markets
The chosen one will account for about 30% of your course. The remaining 70% is material that will be covered by all candidates.
Exam structure
In Level II of the CFA® Program, you got familiar with the idea of the “vignette” question, where you have several questions that are based on a scenario that you must read and understand. In Level III you will still find these questions, but they will also appear in an additional, more complex form.
Half of the Level III exam is tested like Level II, with multiple choice questions based on a series of vignettes. But the other half is made up of “essay” questions – sometimes referred to as “constructive response”. These again present you with a vignette that you must examine, but now you will write your answers freely in a blank box, rather than selecting from multiple choice answers.
What are graders looking for?
The unique structure of Level III reflects the fact that it is designed to test a higher order of knowledge than previous levels. What graders are looking for is evidence that you can take the tools and concepts that you have learned and apply them to a situation that demands more detailed evaluation.
What this means in practice is that you get fewer prompts to help you. The format of multiple-choice questions can automatically help you to an extent, because the available answers can guide your thinking. But an empty box doesn’t give you any clues. You not only need a solid grasp of your material, but you also need to think about the techniques you will need to answer each question.
What to do and what mistakes to avoid – tips from our graders
Below, our graders provide a few pieces of advice and ways to avoid common mistakes as you prepare to tackle Level III for the first time.
1. Follow the commands
You should already be familiar with the concept of the “command word”, but in Level III it’s more important than ever to understand it well. The command word is the bolded word in an exam “stem” – the question itself – that is intended to guide to you as to how to approach your answer.
Examples are “compare”, “discuss”, “explain”, and “justify”. CFA Institute publishes a complete list of its command words online, including descriptions of exactly how candidates are expected to formulate their answers in response to them.
It’s critically important that you understand the meanings of the command words – and that you pay attention to them in the exam. Failing to do this is one of the most common mistakes made by candidates. Even if you know the information that the question is looking for, if you don’t formulate your answer appropriately for the command word, you might not get credit.
“Compare”, for example, is asking you to state the similarities and differences between two things. It is different to “contrast”, which is only looking for the differences. Pay attention to these nuances.
Sometimes individual command words carry the meaning of other command words within them. “Compare” also encompasses “describe” and “explain”, for example. Again, the online guide will help you get familiar with all this.
Grader tip 1:
Make sure you know the command words – and be sure to follow them in the exam.
2. Be selective
Another common pitfall is writing too much – a real risk in Level III now that you have an empty box in which to write your answer. It’s tempting to think that giving more information could never work against you, but it can when it shows you have not clearly understood what is being asked for.
While the longer answer format is sometimes referred to as an “essay”, a few short sentences is usually all that is required for full credit – assuming they have the correct information. But candidates will sometimes throw everything they can think of into their answer, in the hope of hitting the mark somewhere.
Not only will this not earn you any extra credit, it may even harm your chances. Remember: if a question asks you for two reasons, then give just two reasons, not four or five. Contrary to what you might think, the graders will not simply take the two best ones out of the selection you have provided.
Grader tip 2:
There are no extra points for irrelevant information – don’t talk yourself out of marks!
3. Think about structure
Another danger is writing in a confusing way. Graders like to see each part of an answer deal with one distinct concept, rather than everything being bundled together. Remember, graders are looking to identify specific pieces of information that they can match up with the correct answer for a question. If you confuse the issue by lumping one answer with another, you do not help yourself.
If a question asks for two answers, present them in separate sentences or separate paragraphs, rather than merging them. Sometimes the question itself will be structured in this way, for example with one part labelled as “i” and another as “ii”. You should aim to mirror how the question is formulated, and if it contains two distinct points, don’t combine them in your answer.
Grader tip 3:
When structuring your answer, take your lead from the structure of the question.
4. Give yourself an edge
As with the other levels of the CFA Program, in Level III you should make sure that you take full advantage of the practice materials that are on offer.
All Level III candidates get two mock exams when they register, but the optional practice pack gives you another two mock exams plus 300 multiple-choice questions to help you test your knowledge as part of your revision process.
And beginning with the 2026 exam cycle, there is even more reason to spend time taking mock exams. In the past, these papers gave you an explanation of the answer and the context behind it, but from now on they will also provide a scoring rubric detailing how many points are available for each question, meaning that candidates can give themselves an actual score for their mock exam rather than simply having access to correct answers.
Grader tip 4:
Use all the practice materials – today they are more useful than ever.
5. Leave no blanks
And finally – answer all the questions! There is absolutely nothing to be gained in leaving an answer blank, even if you don’t think you know the answer.
Write something, and you might be right. Write nothing, and you can only be wrong.
Good luck!
You may also be interested in
Fast track route to the CFA® charter
Tune in to learn the best study tips from these candidates who have passed the three levels of the CFA Program in 18 months.
Why pursue the CFA® charter?
Christopher Rodrigues passed all three levels of the CFA program. Find out why he chose to take the CFA exams and how it helped him differentiate himself from other graduates in jobs searches.
Long term career benefits of the CFA® charter
Four charterholders tell us why they think taking the CFA exams delivers a lot more value to your career than just the learning content.
Explore the CFA® Program
Whether you’re considering the CFA Program or already registered as a candidate, we have information and resources to help you navigate the next step.
Already a candidate? Access candidate resources
