As an expert in the field of finance and investment, I have been asked numerous times about the difficulty level of the CFA (Chartered Financial Analyst) exam. And one question that often comes up is, is CFA Level 2 or 1 harder? Having taken and passed all three levels of the CFA exam, I can confidently say that CFA Level 2 is generally considered more challenging than CFA Level 1.The main reason for this is the emphasis on application, analysis, and introduction of questions from the set of points in Level 2.This requires a deeper understanding of the concepts compared to the predominantly knowledge-based questions in Level 1.It's important to note that the topics covered in both levels are the same, so there are no additional areas you need to prepare for when moving from Level 1 to Level 2.At Level 2 of the CFA exam, each of the two sessions is comprised of 8 to 11 bullet points, which is a passage describing a given scenario followed by 4 to 6 questions about that scenario. The most significant change from Level 1 to Level 2 is that the questions take the form of what are known as “sets of elements”. This means that candidates must not only have a strong grasp of the material but also be able to apply it to real-world scenarios. On the other hand, Level 2 of the CFA exam consists of some of the most complex and weighty topics in the entire course.
These include financial statement analysis, portfolio management, ethics, and derivatives. These topics require a high level of understanding and application, making them more challenging than the topics covered in Level 1.But what are the most effective study methods for tackling the CFA exam? There are numerous techniques you can use while preparing for all three levels of the CFA. By analyzing the CFA Level 1 curriculum, you can easily understand that most of the topics are a continuation of what undergraduate students have already learned. This means that if you have a strong foundation in finance and investment, you may find Level 1 to be relatively easier compared to Level 2 and 3.If you are planning to take the CFA Level 2 or 3 this year, keep in mind the points mentioned above.
It's essential to have a solid understanding of the concepts covered in Level 1 before moving on to Level 2.This will help you better prepare for the challenges ahead and increase your chances of passing the exam. In Level 1 of the CFA exam, all multiple-choice questions (MCQs) are independent of each other and are often much shorter and more direct compared to those in Levels 2 and 3.This means that candidates can easily answer each question without having to refer back to previous questions or passages. However, this is not the case in Levels 2 and 3, where questions are often interconnected and require a deeper understanding of the material. Practically everyone who has taken all three levels of the CFA exam will say that it is one of the most difficult and time-consuming exams they have ever taken. With a pass rate of less than 11% at all three levels, the CFA exam is undoubtedly challenging. In fact, its pass rate is lower than most state bar exams, making it one of the most prestigious and sought-after certifications in the finance industry. The most difficult topics in Level 2 of the CFA exam are often financial statement analysis, portfolio management, ethics, and derivatives.
These topics require a high level of understanding and application, making them more challenging than the topics covered in Level 1.However, this is not to say that the other topics are easy. In fact, all topics in the CFA curriculum require a significant amount of time and effort to master. Although Level 2 of the CFA exam represents a big step forward compared to Level 1 in terms of volume of content, for some candidates, this is not comparable to the additional complications that Level 3 entails with the essay format (constructed response). This means that not only do candidates need to have a strong understanding of the material, but they also need to be able to articulate their answers effectively in essay form. Before starting a difficulty analysis, it's essential to keep in mind that many more people take the Level 1 exam than the Level 2 exam. This means that the pass rate for Level 1 may be slightly higher due to a larger pool of candidates.
However, this does not diminish the fact that Level 2 of the CFA exam is undoubtedly more challenging than Level 1.Unlike Levels 1 and 2, where you can measure your progress objectively as you go through all the practice tests, taking the Level 3 tests is a double-edged sword. This is because there is no way to know what combination of questions will be asked on the actual exam. This means that candidates must have a thorough understanding of all topics and be able to apply them effectively in any scenario. In conclusion, while both levels of the CFA exam are challenging in their own right, CFA Level 2 is generally considered more difficult than Level 1.This is due to its emphasis on application, analysis, and introduction of questions from the set of points, which demand a deeper understanding of the concepts compared to the predominantly knowledge-based questions of Level 1.However, with dedication, hard work, and effective study techniques, passing both levels is achievable. So if you are planning to take the CFA exam, be prepared for a challenging but rewarding journey towards becoming a Chartered Financial Analyst.