CFA Exam Difficulty Explained: Get The Facts | Zell

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      How Hard Is The CFA Exam

      Last Update On 27th March 2024
      Duration: 6 Mins Read

      CFA or Chartered Financial Analyst is considered to be one of the toughest exams in the field of finance. This competitive exam comes in three levels and each level comprises ten papers. All of the subjects learnt in this examination are based on advanced financial concepts like income, derivatives, portfolio management, wealth management, corporate finance and financial ethics as per the current times. Passing the CFA exam is not an easy feat, it requires you to study diligently and patiently. However, once you’ve cleared the examination, we assure you, there’s no looking back.

      Since this course equips you with advanced investment concepts, you’ll be working in some of the most prestigious investment fields like Investment Banking, Portfolio Management, Hedge Fund Management, etc. 

      The CFA course is a three-year course that students can pursue after their graduation in any stream. However, it is recommended to have a bachelor’s degree in commerce to make your journey a rather seamless one. The CFA exam can be hard or easy for you depending on your interest level. But before you start, here are some things you need to know.

      CFA Level 1 Difficulty

      Appearing for the CFA exams is not for the faint-hearted, and passing them also requires a mix of courage and perseverance. Only the best of the lot get to become the charter holders and are then welcomed into the investment field with high salary packages.

      The difficulty level of the CFA Level 1 exam is often described as challenging, requiring candidates to have a solid grasp of various topics across finance, economics, accounting, ethics, and quantitative methods. The exam is designed to assess candidates’ comprehension, application, and analysis skills rather than mere memorization of facts.

      One of the key aspects that make the CFA Level 1 exam challenging is its comprehensive coverage of a wide range of topics. Candidates need to be proficient in areas such as financial reporting and analysis, corporate finance, equity investments, fixed income, derivatives, alternative investments, economics, portfolio management, and quantitative methods. This breadth of subjects demands thorough preparation and a deep understanding of each topic.

      CFA Level 2 Difficulty

      The Chartered Financial Analyst (CFA) Level 2 exam is widely regarded as more challenging than the Level 1 exam. While Level 1 focuses on building a solid foundation of fundamental concepts, Level 2 delves deeper into complex topics and requires a higher level of understanding, application, and analysis.

      One of the primary reasons for the increased difficulty of the Level 2 exam is the shift towards more detailed and nuanced content. Candidates are expected to have a thorough understanding of the material covered in Level 1 and to apply that knowledge in more complex scenarios. Additionally, Level 2 introduces new topics such as financial statement analysis, quantitative methods, and portfolio management with a greater level of depth and sophistication.

      Financial statement analysis, in particular, is a significant component of the Level 2 exam. Candidates are required to analyse and interpret financial statements using advanced techniques, including ratio analysis, cash flow analysis, and the evaluation of accounting quality. This requires a keen eye for detail and the ability to extract meaningful insights from financial data.

      CFA Level 3 Difficulty

      The Chartered Financial Analyst (CFA) Level 3 exam is often considered the most challenging of the three levels, primarily due to its unique format and the integration of various complex topics into case-based scenarios. While Levels 1 and 2 focus more on theoretical knowledge and quantitative analysis, Level 3 emphasises portfolio management and wealth planning in a practical context.

      One of the key factors that contribute to the difficulty of the Level 3 exam is its essay format. Unlike the multiple-choice questions in Levels 1 and 2, Level 3 requires candidates to construct written responses to essay questions and vignettes. This format demands strong writing skills, as well as the ability to communicate complex ideas effectively and concisely.

      Another challenge of the Level 3 exam is the integration of different topics into comprehensive case studies. Candidates are presented with detailed scenarios that require them to apply their knowledge of portfolio management, asset allocation, risk management, economics, and behavioural finance to address specific client objectives and constraints. This requires a holistic understanding of the material and the ability to synthesise information from various sources to develop appropriate investment strategies.

      CFA Passing Rates At A Glance

      If you are intrigued knowing about the difficulty level of each exam, here’s a glimpse into the latest passing rate for all exams.

      Date Level  Passing rate
      November 2023 Level 1 35%
      November 2023 Level 2 44%
      August 2023 Level 3 47% 

       

      Decoding the Hardest CFA level

      As per our discussions with our inhouse team and other students, the CFA levels 2 and 3 are cited to be way harder than the CFA level 1. While it’s difficult to tell which is the most difficult CFA level out of levels 2 and 3, we believe that may vary from year to year.

      The Chartered Financial Analyst level 1 and 2 exam papers are constructed in a multiple-choice format. If you are impulsive in answering these questions, there’s a possibility of making a mistake in choosing your answers correctly. The CFA level 3 on the other hand brings ‘essay’ type questions.

      Things That Make The CFA Exam More Difficult

      Here are certain things you should avoid while appearing for the Chartered Financial Analyst exams.

      • Taking long breaks in between your exams
      • Not creating a study plan of a minimum of 300 hours 
      • Solely relying on heavy knowledge-based CFA study materials
      • Not enrolling in a coaching institute that makes the dry study material interesting for you
      • Focusing only on the easy subjects and not on difficult subjects like fixed income, derivatives and portfolio management

      Topics You Need To Prepare For And Their Weightage

      There are certain concepts in CFA examinations that require more focus and training than the others. Want to know which of these concepts you should focus more on compared to others? Here’s a list of total topics covered and their weightage.

      CFA Exam

      In spite of the difficulty level, there are many students in Asia who’ve enrolled for the CFA examinations. That’s because the demand for this profession is on the rise. 

      However, if you really want to make the most of your learning journey, the best way to do that would be by enrolling in a coaching class that makes learning interesting with gamified notes, case studies and industry-relevant practical training. 

      Wondering which coaching class for the CFA course can give you all of these? The answer is and will always be Zell Education.

      The Chartered Financial Analyst is a globally recognised qualification in the field of finance and investment. If you have recently completed your graduation or are appearing for your final semester, you may be eligible to become a CFA. Interested? We highly recommend checking out our Chartered Financial Analyst (CFA) course.

      FAQs

      Is CFA very difficult?
      CFA is the highest level in financial analysis. To achieve the CFA title students need to undergo rigorous training and clear three intensive levels. The passing percentage of the CFA level 1, worldwide is 35% to 37%.

      Which CFA level is the hardest?
      As per our discussions with our inhouse team and other students, the CFA levels 2 and 3 are cited to be way harder than the CFA level 1. While it’s difficult to tell which is the most difficult CFA level out of levels 2 and 3, we believe that may vary from year to year.

      Can an average student pass CFA?
      Yes an average student can pass CFA exams, it just requires the right amount of determination and dedication to put in intense study hours to achieve the goals.

      Can I pass the CFA with 60%?
      Yes, it is likely to pass the CFA with 60% in your graduation or undergraduate degree.

      What is the best way to ace CFA exams?
      Enrol in a professional coaching class, learning through a mix of different study techniques and practising through mock examinations are some of the best ways to ace your CFA examinations.

      How many attempts can I give for CFA in a year?
      Level 1 has 4 attempts – February, May, August and November. Level 2 has 2 attempts – February and August. The level has 3 attempts – May and November.

      How much time does it take to study for CFA?
      The average candidate for Level I of the CFA exam should spend a minimum of 300 hours over the course of six months preparing for the exam.

      Satyamedh Nandedkar, a seasoned finance professional, holds ACCA, CA, US CMA & CS credentials. With 10+ years of experience, he’s a master ACCA tutor, IFRS trainer, adept in global financial standards, and a trusted advisor in navigating complex financial landscapes.

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