As a financial expert and CFA charterholder, I have seen many candidates struggle with the level 2 of the CFA exam. It is widely known that this level is considered to be one of the most demanding exams in the finance industry. In fact, many successful candidates claim to have spent about 300 hours studying for each level, with level III being the most difficult. So, what makes level 2 of the CFA so challenging? Let's dive into the details and explore the hardest topics that you will encounter in this exam.
The Most Difficult Topics in CFA Level 2
The level 2 exam covers a wide range of topics, but there are a few that stand out as particularly challenging. These include financial statement analysis, portfolio management, ethics, and derivatives.Not only do you need to understand these concepts, but you also need to be able to apply, analyze, and explain them in detail. One of the main differences between level 1 and level 2 of the CFA exam is that level 2 focuses more on applying information rather than simple memorization questions. While both levels cover similar subjects, level 1 has a wider range of topics at a fundamental level, while level 2 delves deeper into a more limited range of subjects.
The Structure of CFA Level 2 Exam
The level 2 exam consists of 22 sets of elements, with each set containing bullet points and 88 multiple-choice questions. These questions are divided into two 132-minute sessions, making it a total of 264 minutes. This structure is designed to test your knowledge and understanding of the concepts in a time-pressured environment. It is important to note that every candidate's experience with the CFA exam is unique.While some may find it easier than others, it is crucial to be realistic about your own needs and not compare yourself to others.
The Most Difficult CFA Exam
Many candidates argue that level 2 of the CFA is the most difficult exam, especially for those without a strong background or work experience in finance. However, as a CFA charterholder, I can confidently say that level 3 is considered the most challenging by most certificate holders. The reason for this is the time and reflection required to respond satisfactorily to elaborate answers. For example, derivatives can be worth up to 15% of your score at levels II and III, but only 5% at level I. This means that you need to have a thorough understanding of these concepts to excel in the exam.The Key to Success: Effective Preparation
Regardless of which level of the CFA exam you are taking, the key to success is effective preparation.This means having a well-structured study plan and using an effective curriculum that covers all the necessary topics in detail. For level 2, it is crucial to focus on financial statement analysis, ethics, and portfolio management as these are generally considered to be the most difficult subjects. These topics have a higher weighting in level 2, ranging from 10% to 15%, compared to their weighting in level 1.