The Truth About the Difficulty of CFA Exams

Find out which level of the CFA program is considered the most difficult and how to prepare for these challenging exams.

The Truth About the Difficulty of CFA Exams

As a CFA expert, I have seen many candidates struggle with the exams and wonder which level is the most difficult. The truth is, it varies from person to person. While Level I may have the lowest pass rate, it doesn't necessarily mean it's the hardest. In fact, many consider Level II to be the most challenging level of the CFA program. Level II is known for its technical content and has a pass rate of only 40%.

This is a significant jump in difficulty compared to the multiple-choice format of Level I. However, this doesn't mean that Level I is easy. It all depends on your academic background in finance. If you have a strong foundation in accounting, finance, economics, and statistics, you may find Level I to be more manageable. While there are calculations and concepts to master in Level I, they are not overly complicated.

Much of the exam focuses on memorization of formulas and definitions. On the other hand, Level II requires a deeper understanding of the material and more practice to succeed. When it comes to specific topics, many candidates struggle with fixed income, derivatives, and FSA on the Level I exam. However, it's important to note that each person's strengths and weaknesses may vary. Some may find these topics easier than others. So how do we rank the difficulty of each subject on the Level I exam? It's not an easy task as it can vary from person to person.

However, based on my experience and feedback from other CFA experts, here is a rough ranking of the 10 subjects from easiest to hardest:

  1. Ethics
  2. Quantitative Methods
  3. Economics
  4. Corporate Finance
  5. Portfolio Management
  6. Alternative Investments
  7. Equity Investments
  8. Derivatives
  9. Financial Reporting and Analysis (FRA)
  10. Fixed Income
It's important to note that this ranking is not set in stone and may vary for each individual. Some may find FRA to be the most challenging, while others may struggle with derivatives. The key is to identify your weaknesses and focus on improving them. Now, let's talk about the Level II exam. As mentioned earlier, this is often considered the most difficult level of the CFA program.

The curriculum is much deeper and requires a significant amount of reading time. With the same number of topics as Level I, Level II delves into each topic in great detail. One of the biggest challenges of Level II is time management. With a more in-depth curriculum, it can be challenging to cover all the material before the exam date. This is especially true for those taking the December exam, as they have less time to prepare compared to those taking the June exam. In 2024, there will be some changes to the Level I exam, including new weighting of subjects and a new number of learning modules.

This may affect the difficulty of the exam, so it's important to stay updated on any changes made by the CFA Institute. So, what can you do to prepare for these challenging exams? Some may opt for a CFA tutor, while others may rely on study materials such as Schweser's CFA QBank. It's essential to find what works best for you and your learning style. The CFA Institute uses psychometrics and a team of CFA fellows to determine expected performance for each question and the entire exam. This means that the exams are designed to test your knowledge and understanding of the material, rather than just your ability to memorize information. In conclusion, the difficulty of CFA exams is subjective and varies from person to person. While Level II may have a lower pass rate and a more in-depth curriculum, it doesn't mean that Level I is easy.

The key is to identify your weaknesses and focus on improving them. With dedication and hard work, you can conquer any level of the CFA program.