How to Crack Level II CFA

Welcome to the wonderland of Level II CFA! 

I have been delivering Level II classes for over a decade now and I know what it takes to pass. Here are the Challenges and Strategies (and the key differences from Level I) to ensure you ace the exam in June 2020. 

Challenges

  1. The question format is vignette; a case study followed by questions. On the Level II exam, you will have a total of 120 items (18 vignettes with 6 items each and 3 vignettes with 4 items each, for a total of 21 vignettes) compared to 240 multiple-choice items on the Level I exam. An “item” is a multiple-choice question.

  2. There is way more stuff!  Level I was broad but shallow. Level II has the same breadth (the same 10 Topics) but is also very deep

  3. Level II is more calculation intensive than Level I. 

  4. There are lots of nuances and subtext in Level II. 

  5. Topic weightings in Level II are variable. In Level I topic weightings were fixed. 

  6. A lot of the material in Level II is based on Level I. e.g. there is a lot of hypothesis testing in Level II Quants, ratios may be tested in Level II FRA and duration and convexity reappear in Level II fixed income. 

  7. The Level II exam is only once a year unlike Level I, which is twice a year. Which means if you fail you’ve to wait for another year

  8. It’s a HUGE jump volume and complexity from Level I to Level II which is the biggest reason why so many say this is the toughest level.

Strategies

  1. It doesn't matter whether you passed CFA Level I in the first attempt and scored high in all subjects.  Level II is completely different. Do NOT be complacent or overconfident.

  2. The Big 4 in Level II makes up a maximum of 60% of the exam so nail these. These are:
    – Equities (10-15%)
    – FRA (10-15%)
    – Fixed Income (10-15%)
    – Portfolio Management (10-15%)

  3. The topic weights are ranges which means you shouldn’t try and ‘” game” the exam by skipping some Readings or (worse!) some Topics. E.g. you can get two or three vignettes from FRA. 

  4. The depth means you should be adept at getting the answer using different methods, depending on what data they give you in the exam.

  5. Do not practice working out stand-alone multiple-choice questions. That was Level I and it’s a waste of time now. Level II is in item set format and you should focus on this type of question

  6. Because of vignettes, speed-reading skill is essential. The length of a vignette ranges from about 1 page to 2.5 pages. The average length of the vignettes on the exam is about 1.5 pages. The longer vignettes are those that include several tables of information, such as for quants, FRA, or fixed-income item set. So, the ability to quickly sort out the rubbish from the relevant and answer quickly is essential

  7. Work out all examples from the CFA Curriculum (CFAC) and the end of chapter problems in the CFAC in vignette format. 

  8. The CFA Institute (CFAI) has brought out its own item set questions. These are available for free on the CFAI website and you should work out all of these. These are tough questions and hence I recommend you do these in the last few weeks before the exam.

  9. Plan to spend WAY MORE TIME on Level II compared to Level I. Forget 300 hours. From my experience, I suggest at least 600 hours (including revision and mocks) for a good chance to pass. 

  10. Level II is a way lot more stuff so plan to start revision earlier than you did for Level I. At least 3-4 weeks of revision may be required.

Don’t try and reinvent the wheel. The smart way is to learn from those who’ve been there before.

I wish you success. Feel free to reach me with your questions via my LinkedIn or through email (binodpodcast@gmail.com).  

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