What Is CFA Exam?
CFA stands for Chartered Financial Analyst®. To become a CFA charterholder, you need to pass the CFA exam and meet specific requirements.
The CFA exam has 3 levels. To pass the CFA exam means to pass all the 3 levels. The lowest pass rate is for the level 1 exam and it’s been stuck around 43% for long but – with the L1 pass rates down even to 22% – the average level 1 CFA exam pass rate is now 41%. The highest pass rate is for level 3 – for many years, it exceeded 50% but now it's more around 40%.
CFA EXAM = LEVEL 1 + LEVEL 2 + LEVEL 3
The exam is held by CFA Institute which introduced the CFA Charter in 1963 and has been improving this prestigious financial certification ever since. From year to year, CFA Institute alters exam curriculum wherever necessary for the CFA exam to reflect ongoing changes in the rapidly developing financial world. In 2021, CFA exam moved to computer-based testing.
CFA Exam Level by Level
Although each CFA exam level is different, major stages remain the same from level to level. The route always begins with registration and ends when CFA exam results are released.
STAGES FOR LEVEL 1, LEVEL 2 & LEVEL 3 CFA EXAMS:
1. REGISTRATION
Each time you want to register for your CFA exam (all levels and retakes), you need to make a fee payment. There are 2 registration fee deadlines and your CFA exam cost will differ depending on which deadline you choose. Moreover, CFA exam cost reduction even down to $250 is available to those eligible for CFA Institute Scholarships. Be sure to check before you decide to register for your exam.
CFA EXAM REGISTRATION FEES IN 2023:
- early registration fee = $900 (for early birds only) or
- standard registration fee = $1200
CFA EXAM SCHEDULING:
One thing is to register for an exam. Quite another is to schedule the exact date of your CFA exam. Registration is mainly about the payment and it only says which exam you'll be taking: in February, May, August or November. These are the 4 exam windows when CFA exams will be available starting in 2021. After you register for your exam, you need to self-schedule your exact CFA exam date within the chosen exam window. As a rule, the exam window may be up to 10 days long, depending on a test center and geographic area.
CFA EXAM WINDOWS IN 2023:
- LEVEL 1: Feb 14-20, May 16-22, Aug 22-28, Nov 11-17
- LEVEL 2: May 23-27, Aug 29-Sept 2, Nov 18-22
- LEVEL 3: Feb 21-23, Aug 29-Sept 5
NOTE: The scheduling period is always longer than the registration period. Then, there's also the so-called rescheduling deadline. You can re-schedule your exam appointment within the exam window you chose and after making an additional payment of $250 for each re-appointment. For more details about deadlines, see here
2. GETTING TO KNOW CFA PROGRAM CURRICULUM & TOPICS
For every exam level, there is a separate curriculum, each over 3000 pages and covering relevant CFA exam topics.
Level 1 exam books are greatly conceptual. In your exam, you need to be able to recall various concepts and terms and understand different investment tools.
Level 2 exam books are more analytical and you’ll be asked to apply your knowledge more deeply in your exam. The focus of the exam is on asset valuation.
Level 3 merges both the conceptual and the analytical by asking you to evaluate and justify. It gives the highest prominence to portfolio management and wealth planning.
Level 1 and level 2 candidates are tested in 10 CFA exam topics. For level 3, it’s just 7 topics. Also, exam topic weights change from level to level:
| CFA Exam Topics | Level 1 Weights | Level 2 Weights | Level 3 Weights |
|---|---|---|---|
| Ethical and Professional Standards | 15-20% | 10-15% | 10-15% |
| Quantitative Methods | 8-12% | 5-10% | - |
| Economics | 8-12% | 5-10% | 5-10% |
| Financial Statement Analysis* | 13-17% | 10-15% | - |
| Corporate Issuers* | 8-12% | 5-10% | - |
| Equity Investments | 10-12% | 10-15% | 10-15% |
| Fixed Income | 10-12% | 10-15% | 15-20% |
| Derivatives | 5-8% | 5-10% | 5-10% |
| Alternative Investments | 5-8% | 5-10% | 5-10% |
| Portfolio Management | 5-8% | 10-15% | 35-40% |
* Before 2022, CFA Program curriculum referred to Financial Statement Analysis as Financial Reporting and Analysis (FRA for short) and to Corporate Issuers as Corporate Finance.
3. STUDY PLANNING
It’s common knowledge that to prepare for your CFA exam, you’ll need to devote around 300 study hours per each level. Personally, we also strongly advocate a weekly approach to study planning. We believe it can make your CFA exam study plan actually work . First, get yourself a 300-hour study schedule that sets deadlines for the topics. Then, however, focus on your current study week. That’s the only way to pace yourself and follow the plan!
On our blog, you will find some ready-made study plans, which you can further customize to your needs using our CFA Exam Study Planner (available to all levels). Apart from sample study plans, you’ll also find there lots of interesting info related to study planning such as topics categorization, strengths and weaknesses analysis or strategic vs tactical planning description.
4. STUDYING & TAKING CFA EXAM
While studying for your CFA exam, you should let yourself fall into a routine with your calculator. Mind that there are only 2 types of calculators approved by CFA Institute: Hewlett Packard 12C (different models) or Texas Instruments BA II Plus (different models).
Also, regularly review the topics and practice using exam-type questions. Remember that you learn most through practice. That’s why it is so important to do tests and use your calculator from the very beginning of your exam prep. We often use the approved TIBA II Plus Professional calculator in our videos and test questions to explain exam-type problems. Many level 1 and level 2 videos are free at Soleadea. Apart from free videos, you can also find free questions, reading notes, review tests or formulas lists inside your free CFA exam study plan (especially if you're a level 1 candidate):
GET FREE CFA EXAM STUDY MATERIALS
Also, we explain many level 1 exam concepts on our blog. Click on to read and learn:
There's one more thing you should definitely read before your exam, namely all the rules and policies that regulate exam-taking and your participation in the whole CFA Program. For our users, we have prepared a short selective summary of CFA Program policies but we strongly encourage you to read all the terms and conditions governing the CFA exam and provided by CFA Institute.
CFA EXAM DAY
The CFA exam itself is a test (take mock) if you sit your level 1 and level 2 exams and a test/written response if you're a level 3 candidate:
| CFA Exam | SESSION 1 | SESSION 2 |
|---|---|---|
| Level 1 | 90 multiple-choice questions | 90 multiple-choice questions |
| Level 2 | 44 multiple-choice questions (divided into item sets) |
44 multiple-choice questions (divided into item sets) |
| Level 3 | 6 essay sets + 5 item sets (like for level 2) |
5 essay sets + 6 item sets (like for level 2) |
Before 2021, all levels were paper-based. But beginning in 2021, the CFA exams are held on computers. The decision to move CFA exams to computer-based testing was accelerated by the COVID-19 pandemic.
5. RESULTS
The questions we all ask ourselves at this stage is: PASSED or FAILED? When will I know?
Usually, CFA exam results are released after about 5-7 weeks for level 1 and level 2 exams, and 7-9 weeks for level 3. They are sent to candidates’ e-mails. The message you’ll receive will say whether you passed or not. If you pass, it means you reached the minimum passing score (MPS) set individually for every CFA exam, but not disclosed by CFA Institute. It is believed that 70% is enough to succeed.
To pass the exam, you do not have to score over 70% for every topic. It’s the overall exam score that matters. However, you may want to pay attention to your Ethics result because of the ethics adjustment.
When the results are released, you’ll find out more about your performance in different topics in your CFA Institute website account. Also, you’ll get to know how well you did relative to other exam-takers.
waiting time: even 60 days for level 1 & level 2, and 90 days for level 3
CFA exam minimum passing score: ca. 70%
level 1 CFA exam pass rate: ca. 41%
level 2 CFA exam pass rate: ca. 45%
level 3 CFA exam pass rate: ca. 54%
Passed CFA Exam: Prerequisite for CFA Charter
One of the requirements of becoming a CFA charterholder is a passed CFA exam, all levels.
The CFA exam is a difficult challenge. Having seen all CFA exam pass rates, you get to understand it is not easy to gain the Chartered Financial Analyst designation. You’ve set out on a long and difficult journey. But while the CFA exam road can have its twists and turns, there are ways to make it much less bumpy and a lot nicer.
Let us guide you through the meanders of the CFA exam labyrinth the easiest way. It is not to say there will be no ups and downs. You may stumble now and then. But we can promise you will not get lost in the complexities of the exam. Soleadea is the place to give you comprehensive support: solid information, all kinds of CFA exam study materials and tools, as well as unique practical tips.
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