CFA Exam

Candidates contemplating to choose CFA course for their future, often face a question as to how difficult or different are the three CFA levels from one another. Finance being the crux of all, the levels are very different each other with an ascending level of difficulty. Let’s discuss the key differences in CFA level 1exam and CFA level 2 exam in this article.


The first hindrance which students have to face while escalating towards CFA level 2 is the competition from other candidates. Anyone and everyone tries to attempt CFA level 1 to get a taste of the course. But only those who have got it in them, clear the CFA exam. Hence, CFA level 2 candidates have not only proved their mettle but are also more serious as compared to the CFA level 1 counterparts. This makes getting past the minimum pass rate challenging.


People who indulge in CFA generally graduate from a finance background and hence have a strong grip on CFA level 1 exam concepts. But it loses its relevance as and when we proceed in CFA. As the levels escalate the depth of financial prudence needed deepen.

Time lag:

CFA institute has a standard rule that candidates who fail Level I or Level II cannot retake the exam in the adjacent timeframe. Since the frequency of CFA level 2 exam conducted, is less as compared to CFA level 1, the level 2 candidates are at a disadvantage.


CFA level 1 topics focus on introducing the candidates to the financial concepts and hence cover a broader base. But in CFA level 2, in-depth knowledge of the concept becomes the priority and hence topics get more complex and difficult to understand. Only someone with a good grip on the topics of finance can sail through level 2 preparations smoothly. The topic weights in CFA level 1 gets altered in CFA level 2. Thus the subjects on which candidates spend more time in CFA level 1 change in CFA level 2. That adds to the complexity.


The biggest change what we see is, the change in the question format. CFA level 1 follows the multiple choice question (MCQ) format. Thus the approach to solve the problems is different. In CFA level 2, the vignette format comes into picture. A short paragraph, on which the following questions are based. Thus the candidates need to develop the skill of scanning the paragraph and extract only the information necessary to attempt the questions. 

CFA level 2 questions are organized as “item sets,” each based on a shared common vignette and containing 4–6 sub-questions. They cover the topic in question in depth and the candidate needs to have complete understanding of the same. This makes skipping a reading dangerous, as each item sets represents 5% of the points on the exam.

Analyze not memorize:

Though CFA level 2 topics are believed to be a built up on what we have learnt in CFA level 1, but the questions get more sophisticated, complex and hence difficult. Candidates are expected to demonstrate their ability to apply tools and relationships to analyze financial data and to value assets. Furthermore, at CFA level 2, a candidate’s ability to link one theory or concept to another will be tested. Hence, candidates need to know the topics at the back of their hands, as they are expected to analyze and attempt the questions, which require much more than just memorizing the concepts.

To cut the long story short, with every CFA exam level the difficulty increases due to one basic reason. Candidates are expected to not only know the concepts but are also expected to interrelate them and use every tool to decode a question. This makes one capable for tackling any situation that arises in his/her work life, which makes them an undisputable asset.

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