CFA Level 2 Exam Topics
Last Update On 22nd January 2025
Duration: 5 Mins Read
The chartered financial analyst CFA Level 2 Exam is a milestone on the pathway of achieving this prestigious CFA designation. It involves the next step of consolidating, at a higher step, knowledge learned from Level 1 into the real world through financial analysis. Sometimes it goes even further in touching complex understandings and concepts regarding investment tools and portfolio management. If you are intending to take the CFA exam in the year 2025, here is what you should know as topics in the CFA Level 2 curriculum. Understanding the exam structure, the CFA Level 2 syllabus, and the weightage of each topic is very important in effective study planning.
In this blog, we would explain the CFA Level 2 subjects, the weight of each topic, and the pattern of the exam. Further, we go deep into the CFA Level 2 curriculum, key strategies to crack the exam, and how Zell will help you get the CFA designation.
CFA Level 2 Exam Topics: What Should You Know?
The CFA Level 2 topics are divided into different sections, each with a certain weightage in the CFA Level 2 exam. Understanding these topics and their importance in the exam will help you focus on what matters most. Below is a table outlining the CFA Level 2 topics, their weightage, a brief description, the expected number of questions in the 2025 exam, and the number of formulas you should be familiar with.
Topic | Weightage | Description | Min-Max Questions (2025) | Number of Formulas |
Ethical and Professional Standards | 10-15% | Focus on the ethical standards for professionals in the investment industry. | 12-18 | none |
Quantitative Methods | 5-10% | Advanced statistical techniques for financial modeling and decision-making. | 6-10 | 50 |
Economics | 5-10% | Concepts in macro and microeconomics that affect investment strategies. | 6-10 | 50 |
Financial Reporting and Analysis | 10-15% | In-depth understanding of financial statements and their interpretation. | 12-18 | 40 |
Corporate Issuers | 5-10% | Corporate decision-making, valuation, and capital structure theory. | 6-10 | 40 |
Equity Valuations | 10-15% | Valuation of stocks and understanding equity markets. | 12-18 | 100 |
Fixed Income | 10-15% | Analysis and valuation of bonds, including interest rates and yield curves. | 12-18 | 60 |
Derivatives | 5-10% | Pricing and valuation of options, futures, and swaps. | 6-10 | 40 |
Alternative Investments | 5-10% | Investing in real estate, commodities, and other alternative assets. | 6-10 | 20 |
Portfolio Management and Wealth Planning | 10-15% | Understanding portfolio construction, risk management, and performance evaluation. | 6-10 | 70 |
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CFA Level 2 Exam Topics: Description – What are the Learning Modules and Goals?
Each subject matter in the CFA Level 2 is important to build your skills in complex financial analysis and investment management. The summary below provides an overview of the CFA Level 2 curriculum: key learning modules, learning outcomes, learning objectives, and key terms.
- Ethical and Professional Standards
- Learning Outcome: Demonstrate an understanding of the ethical guidelines and standards of conduct.
- Key Terms: Code of Ethics, Standards of Professional Conduct, Integrity.
- Goal: Ensure that you are well-versed in the professional and ethical responsibilities of a chartered financial analyst.
- Quantitative Methods
- Learning Outcome: Develop skills in advanced statistical methods, including regression analysis and hypothesis testing.
- Key Terms: Regression, Time Series, Hypothesis Testing.
- Goal: Enhance your ability to apply quantitative techniques to financial data.
- Financial Reporting and Analysis
- Learning Outcome: The student will be able to interpret financial statements in order to assess the financial health of a company.
- Key Terms: Balance Sheet, Income Statement, Cash Flow.
- Goal: Strengthen your financial analysis skills for investment evaluation.
- Equity Valuations
- Learning Outcome: The valuation techniques and equity market dynamics.
- Key Terms: P/E Ratio, Dividend Discount Model, Market Efficiency.
- Goal: Build proficiency in assessing stock investments.
- Fixed Income
- Learning Outcome: The student will be able to understand in detail the concepts of bond valuation and yield curve analysis.
- Key Terms: Yield to Maturity, Duration, Convexity.
- Goal: Acquire expertise in valuing fixed-income securities.
- Derivatives
- Learning Outcome: Explain the mechanics and valuation of derivative instruments, including options and futures.
- Key Terms: Put Option, Call Option, Black-Scholes Model.
- Goal: Become proficient in pricing and using derivatives in hedging and speculation.
- Portfolio Management
- Learning Outcome: Know how to construct and manage a portfolio.
- Key Terms: Asset Allocation, Risk Management, Sharpe Ratio.
- Goal: Develop skills in optimising investment portfolios for clients.
What Are the Important, Easiest, and Hardest Topics of the CFA Level 2 Exam?
What Are the Easiest Topics?
Some candidates find certain topics more manageable, especially:
- Ethical and Professional Standards: This area relies heavily on familiarity with the ethical guidelines, but the questions are usually fairly direct.
- Quantitative Methods: This topic will be considered pretty easy if your mathematical background is strong.
What Are the Hardest Topics?
The CFA Level 2 exam is noted for its depth and complexity, and a few sections of it are more challenging, which include:
- Financial Reporting and Analysis: The mere need to interpret complex financial statements can be overwhelming.
- Fixed Income: In this context, bond valuation models and the concept of the impact of interest rates have generally been very confusing to grasp for beginners in particular.
What Are the Historical Changes and Revisions to the CFA Level 2 Exam Topics?
Over the years, the CFA Level 2 syllabus has undergone several updates to reflect changes in the financial industry and also to ensure that the exam tests relevant knowledge. Historical revisions have included:
- Greater Emphasis on Alternative Investments: Alternative investments have become important components of the syllabus as a result of growing interest in asset classes such as real estate and commodities.
- Evolving Ethical Standards: The CFA Institute is always updating the ethical standards to meet the changes in financial regulations and practices.
How Can Zell Help You Prepare for CFA Level 2?
Zell is one of the innovators in CFA exam preparation, offering a comprehensive suite of study materials, mock exams, and expert support. With Zell, one will be able to effectively tackle the CFA Level 2 topics and make sense out of the complexities within the CFA Level 2 curriculum. Their adaptive learning platform provides personalised study schedules based on your strengths and weaknesses, so you can concentrate on what is relevant to you.
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Conclusion
CFA certification for Level 2 requires a strategic approach toward preparations and an in-depth understanding of the topics and CFA Level 2 topic weights. Since the CFA Level 2 exam is tougher compared to Level 1, one should plan their studies effectively and give ample time to each section. It requires one to plan well in relation to the CFA Level 2 syllabus for structured study. You will need to ensure you cover important topics, make as many attempts at the questions from the past years, and employ appropriate study resources like Zell. With all that, you will confidently take up the exam in great assurance and finally get certified.
FAQ on CFA Level 2 Exam Topics
What are the topics for the CFA Level 2 exam?
Topics included on the CFA Level 2 exam, among others, include those on ethical and professional standards, quantitative methods, financial reporting and analysis, equity investments, fixed income, derivatives, alternative investments, and portfolio management.
Is CFA Level 2 very difficult?
The CFA Level 2 exam is considered to be more difficult than Level 1 since the material has more complexity and depth. Candidates are required to apply their knowledge in practical situations; thus, a deep understanding of the financial concepts will be required for this exam.
What is the syllabus of CFA Level 2?
Other advanced topics that the CFA Level 2 syllabus covers include financial reporting, equity investments, fixed income, derivatives, and portfolio management. The focus is on practicing what was learned in Level 1 in practical financial analysis.
How many attempts to pass CFA Level 2?
There is no limit to the number of attempts you can make to pass the CFA Level 2 exam, but you must pass the exam within a certain time frame. The typical pass rate for the exam is around 40-50%, so many candidates may need multiple attempts to pass.
Does CFA Level 2 have value?
Yes, the CFA designation, after qualification in CFA Level 2, offers numerous career opportunities in finance, investment management, and research. It is highly valued in the industry and significantly enhances your career prospects.