Dec 2020 Level 2 CFA Exam Topic Weights

Last Updated: July 3, 2020

The table shows the weights of all level 2 CFA exam topics for your Dec 2020 exam:

Level 2 Topics	Minimum Topic Weight	Maximum Topic Weight
Ethics	10%	15%
Quantitative Methods	5%	10%
Economics	5%	10%
Financial Reporting and Analysis	10%	15%
Corporate Finance	5%	10%
Equity Investments	10%	15%
Fixed Income Investments	10%	15%
Derivative Investments	5%	10%
Alternative Investments	5%	10%
Portfolio Management	10%	15%

As you can see, among the most important topics are:

Equity Investments (EI),
Financial Reporting and Analysis (FRA),
Fixed Income (FI), and
Ethical and Professional Standards (Eth).

You should devote even up to 60% of your study time to these four topics.

See what else you need to know about CFA exam level 2 topics

Also – among the topics with the highest number of questions in the exam – you can expect to find Porfolio Management (PM).

Number of Questions and Item Sets for Level 2 CFA Exam Topics

Level 2 exam questions are arranged into item sets. What it means is that the total of 120 exam questions (60 questions per each exam session) is divided into smaller groups of multiple-choice questions topped by vignettes (short cases forming the basis for the multiple-choice questions).

There used to be 20 item sets altogether (10 per exam session), where each item set included 6 multiple-choice questions. However, as of June 2019 level 2 CFA exam, CFA Institute decided to have item sets with a varying number of questions (this may be a way to eliminate item sets with questions from various topics, which indeed happened in the past). In June 2019 exam, there were 21 item sets: 18 with 6 and 3 with 4 multiple-choice questions, which probably looked as follows:

	MIN no. of questions	MAX no. of questions	Predicted no. of questions	Predicted no. of item sets
Ethics	12	18	12 (6+6)	2 item sets
Quantitative Methods	6	12	10 (6+4)	2 item sets
Economics	6	12	6	1 item set
Financial Reporting and Analysis	12	18	18 (6+6+6)	3 item sets
Corporate Finance	6	12	10 (6+4)	2 item sets
Equity Investments	12	18	18 (6+6+6)	3 item sets
Fixed Income Investments	12	18	16 (6+6+4)	3 item sets
Derivative Investments	6	12	12 (6+6)	2 item sets
Alternative Investments	6	12	6	1 item set
Portfolio Management	12	18	12 (6+6)	2 item sets
SUM	84	150	120	21

In your Dec 2020 level 2 exam, you can expect from 10 to 15 vignettes supporting 60 multiple-choice questions per exam session (i.e. 20-30 vignettes altogether supporting 120 multiple-choice questions). So, in fact it gets impossible to predict what your exam might look like. You may end up taking a regular test of 10 item sets per exam session, each with 6 multiple-choice questions. But even more likely you may expect an irregular test where the number of item sets varies from session to session and different item sets have different number of multiple-choice questions. Cheer up, though. To ensure that both sessions are fair, there's one thing that's unchangeable, namely the total of 60 multiple-choice questions per exam session.

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Dec 2020 Level 2 CFA Exam Weights

Level 2 CFA exam topic weights given in ranges aren’t very helpful, are they? Whether presented as a percentage or as the number of questions, you cannot tell exactly how many questions each topic gets in your exam.

If we wanted to present current level 2 topic weights as single (average) values, we could use the arithmetic mean. This is what we'd get:

However, this measure is far from ideal. It doesn’t sum up to 100% because of the disproportion between the minimum and maximum topic weight. If you add the numbers in the first column of the table above, you’ll get 84 questions. If you add the numbers in the second column, you’ll get 150 questions. In the level 2 exam, there are 120 questions – so the arithmetic means all summed up will be slightly lower than 100% (because the sum of minimum no. of questions is a bit below 90). Sorry. Guess it’s not that easy to arrive at a plausible question distribution among topics in the CFA exam.

Still, in the third and fourth column of the table above, we give you our prediction. It was made for June 2019 level 2 exam but we believe it can give you some food for thought as regards your Dec 2020 level 2 exam format. That's why we continue to have it here so that you can read it. It assumes the new item set system, including the 1 item set = 1 topic attempt, and is based on both the new and the old level 2 topic weights. See for details below.

Before June 2019, level 2 topic weights were different with the highest values of 15-25% for Equity. Other level 2 topics weights were as follows: FRA (15-20%), FI (10-20%), Ethics (10-15%), CF (5-15%), DI (5-15%), QM (5-10%), PM (5-10%), ECO (5-10%), and AI (5-10%).

Although the weights are changed now, the difficulty of the topics stays pretty much the same. This allows us to arrive at the number of item sets possible also in your Dec 2020 level 2 exam. Before we explain the numbers proposed, we analyze two rather extreme scenarios:

Scenario 1:

Take the 4 most important topics first and assume each will get as many as 18 questions in your exam. You already end up with 72 questions. Now add 18 more questions for Portfolio Management – that’s already 90 questions. You are left with 30 questions, which leaves us with the average of 6 questions for each of the 5 remaining topics (and 6 is the minimum no. of questions for each of these topics).

Scenario 2:

Now consider the other extreme scenario where each of the 4 most important topics is given only 12 questions, which totals up to 48 questions. This means you are left with 72 questions to distribute among the other 6 topics, i.e. 12 questions per topic on average. This is how you end up with equal topic weights for all level 2 CFA exam topics, which is highly undesirable.

Neither of these two extreme scenarios is what CFA Institute surely aims at. Of course, the number of questions per each topic may vary from exam to exam. But we think our estimation is good enough to serve as a credible benchmark that finally translates the opaque level 2 topic weights into a more transparent system.

Scenario 3:

Here's our educated guess that worked just fine for June 2019 level 2 exam:

18 Equity questions (6+6+6=3 item sets) – it used to be up to 30 questions (5 item sets) and no readings have been taken away from the curriculum
18 FRA questions (6+6+6=3 item sets) – it used to be up to 24 questions (4 item sets) and a new reading has been added to the curriculum
16 Fixed Income questions (6+6+4=3 item sets) – it used to be up to 24 questions (4 item sets) and no readings have been taken away from the level 2 curriculum
12 Ethics questions (6+6=2 item sets) – CFA Institute promotes ethics but you are tested on the same Code and Standards for the second time (and 12 questions is already quite a lot)
12 Derivatives questions (6+6=2 item sets) – it used to be up to 18 questions (3 item sets) and no readings have been taken away from the curriculum
12 Portfolio Management questions (6+6=2 item sets) – it used to be up to 12 questions (2 item sets), now it’s up to 18 (but the readings stay the same)
10 Quantitative Methods questions (6+4=2 item sets) – a new reading has been added to the curriculum + 1 of the readings has been extended by the subject of machine learning
10 Corporate Finance questions (6+4=2 item sets) – we go for 10 questions here ‘cos we believe that all the above topics are indeed more important and this topic is most likely to be left with just 10
6 Alternatives questions (1 item set) – as above (plus note we’re slowly reaching the total of 120 questions and 21 item sets, so 1 item set with 6 questions is what it is)
6 Economics questions (1 item set) – as above (plus it’s now 120 questions/21 item sets total )

CFA Exam: Difficulty of Level 2 Topics

As we’ve already said, although the weights changed, the difficulty of the topics stays pretty much the same. Of course, topic difficulty is a subjective criterion but you’ll surely agree that EI with its current weight of 10-15% and still more than 500 pages in your CFA Program curriculum seems both important and difficult. In our free CFA exam study planner, you get lots of extra time scheduled to study Equity and other important topics, i.e. Ethics, FRA, and Fixed Income.

While creating your personalized CFA exam study schedule, you can choose the topic sequence you like:

Soleadea topic sequence based on topic length, difficulty, and importance (highly recommended ):
ETH, EI, FI, DI, FRA, CF, QM, PM, ECO, AI, ETH,
CFA Program curriculum topic sequence: ETH, QM, ECO, FRA, CF, EI, FI, DI, AI, PM, or
CFA Program curriculum topic sequence but with Ethics at the end: QM, ECO, FRA, CF, EI, FI, DI, AI, PM, ETH.

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