The Ultimate Guide to Passing CFA Level Two
Ryan O'Connell, CFA
Dec 28, 20
CFA Level Two includes substantial breadth and depth of material. The expectation is that you can memorize an extremely wide array of definitions and formulas.  *Missing Thumbnail*

It has been widely speculated that roughly 1/3rd of the questions on the CFA Level Two exam tend to be quantitative (formula memorization based) and the remaining 2/3rd tend to be qualitative (concept and definition memorization based). CFA Level two is considered by many people to be the most difficult level (although I personally believe Level Three is more difficult). It will take a large number of hours to pass this exam (likely between 300 and 600 depending on your prior finance knowledge). In this guide, I will cover the following topics:


  • When Should I Take CFA Level Two?
  • What Study Material Should I Use?
  • Which Prep Providers Should I Use for Base Study Materials?
  • How Should I Study Most Efficiently?
  • How Should I Approach the Vingettes?
  • The Importance of Spaced Repetition and Practice Problems.

When Should I Take CFA Level Two?

Because much of the content in CFA Level Two builds off of what you learned in Level One, I’d recommend scheduling your Level Two exam as soon as possible and completing Level One. Cutting down on the amount of time between the two exams will greatly reduce how much information you forgot and, as a result, greatly reduce how much time you need to spend refreshing your memory on concepts.

I’d suggest taking the exam as soon as you can fit the time in your schedule to dedicate 4 to 6 months to study. You should absolutely consider your work and life situation to make sure you are planning to take the test when you can put in the proper hours of preparation.

What Study Material Should I Use?

I will tell you what worked exceptionally well for me but keep in mind that everyone learns differently. The CFA Institute provides its own textbooks to you when you sign up for the exam. It is my opinion that reading the chapters in their entirety from these textbooks is not a time-efficient way to study. Because the expectation for this level is primarily formula and definition memorization, reading these massive walls of text filled with fluff is not an optimal use of your limited study time. Instead, I recommend studying from third party prep providers that essentially summarize the original readings into about 1/3rd of the words and outline the key formulas and definitions you must memorize without wasting your cognitive energy on the filler fluff that makes a huge amount of the original CFAI textbooks.

There are a few things, the CFA Institute textbooks do extremely well, however. The End of Chapter Questions that come at the end of each reading are extremely high-quality study material that I think everyone should use. The blue boxes in the middle of the chapters (the ones that give in-depth examples) can be very beneficial to work as well. I also highly recommend working on all of the multiple-choice practice problems on the CFA Institutes' official website as they are free and give you an indication of how you are doing relative to your peers. They also have their official mock exams on the Institute’s website that you should absolutely take closer to the exam date.

Which Prep Providers Should I Use for Base Study Materials?

Please keep in mind that I have not been paid anything for my recommendations, I’m simply telling you the prep providers that helped me the most. Each level of the CFA exam has different prep providers that stand above the rest. As for Level One prep providers, there are a few I recommend highly. Which provider, depends on whether you learn better from reading or from educational videos. For people who prefer watching videos rather than reading, I highly recommend the prep material provided by Mark Meldrum, Ph.D. He typically turns a 50 Page CFA Institute reading into a nicely summarized hour-long video outlining the key concepts. His packages include very useful mock exams and question banks as well. At 365 CAD (which converts to $284 at the time of this writing), his packages are the cheapest of the high-quality packages I’m familiar with. Mark Meldrum’s site was my favorite prep provider for Level Two.

Kaplan Schweser: In terms of written text, Kaplan Schweser is the most widely used prep provider for Level Two. And that is because, in my opinion, their textbooks can achieve what the original CFA Institute Textbooks can achieve in one-third of the words. Bear in mind, I have seen a lot of negative criticism on online message boards related to Kaplan Schweser’s prep material with Level Two. I found their material very useful and high quality, but keep in mind that they certainly have their fair share of disgruntled customers on this level. I recommend their SchweserNotes package specifically as it will save you substantial time in your readings. This package (costing $399) is should be enough to pass Level Two when used as a complement to the CFA Institute End-of-Questions, Blue Boxes, and online Topic Tests.


How Should I Study Most Efficiently?

After you have the prep material (whether it be Kaplan Schweser, Mark Meldrum, CFA Institute Original text, or any other reputable provider), I recommend following this process:


  1. Choose a Section to start with (Ethics, Equity, Fixed Income, etc.)
  2. Go through that entire section reading by reading, performing the following routine for each reading:
    1. Read the base text or watch the video lecture for the reading. (Make notecards of all the key formulas, concepts, and definitions while reading/watching)
    2. Go through the Blue Boxes for the reading in the original CFA Institute textbooks
    3. Go through the End-of-Chapter Questions in the original CFA Institute textbooks. (Make sure to both study the solutions to the problems you got right and wrong)
    4. Flip through the flashcards for this reading in spaced intervals that increase over time. I used a free spaced repetition flashcard app called Anki which keeps track of the intervals for you (highly recommended)
  3. Once you’ve finished a section (Ethics, Equity, Fixed Income, etc.), take the Topic Test for that reading on the CFA Institutes official website.
  4. Perform steps 2 and 3 for the next section.
  5. Aim to finish this process for all the sections two months in advance of the test if you do not have a background in finance, and one month ahead of the test if you do have a background in finance.
  6. Go through all of the Topic Tests on the CFA Institutes website one last time after finishing the entire curriculum.
  7. Take the two Mock Exams on the CFA Institutes official website as you would take the normal exam to practice for mental fatigue (isolated environment, 3 hours straight for the morning section, then a one- or two-hour break for lunch, then an additional 3 hours straight for the afternoon). Then review all of the solutions to the mock exams. If you have additional time remaining after this, you can purchase third party mock exams.


How Should I Approach the Vignettes?

The vignettes are the passages followed by a group of questions that relate to the passage above. When I first started solving vignettes, I made the mistake of reading the entire passage first before reading the questions. I could never finish the vignettes in time. What I found over time is that the vignettes typically have the same number of paragraphs as questions. And typically, the answer to each question can be found in the paragraph in the same order (for example, the answer to the first question can be found in the first paragraph and the answer to the second question can be found in the second paragraph, etc.). I changed my strategy and started skipping the passage, and going straight to the first question and finding the answer above. Then moving on to the second question and so forth. This strategy allowed me to finish vignettes with substantial time to spare.


The Importance of Spaced Repetition and Practice Problems

Flashcards are extremely important to use in conjunction with spaced repetition. Spaced repetition is defined as “a method where the subject is asked to remember a certain fact with the time intervals increasing each time the fact is presented or said”. Researchers have found spaced repetition to be the most effective method to commit new information into long term memory. I heavily relied on this method for all three levels of the CFA exam and the strategy served me extremely well.

You wouldn’t practice basketball by reading textbooks on how to play basketball.  So why would you prepare for a formula application test by reading textbooks about formulas? You must get in a lot of practice through actual problems. That is why the study method I’ve suggested above leans so heavily on Blue Box problems, End-of-Chapter questions, Topic Tests, and Mock Exams. The process of attempting a question, getting it wrong, and then learning from your mistakes is extremely valuable for all standardized exams.

Final Remarks

Passing the CFA Level Two exam is an extremely grueling task that shouldn’t be taken lightly. The test focuses primarily on whether you have memorized key formulas and concepts. Because of the way the test evaluates your knowledge, I recommend spending less time reading, and more time flipping through flashcards on the key formulas and definitions (using spaced repetition), and more time on practice problems and mock exams.

Begin your preparation well in advance of the test and make sure you’ve completed the curriculum one to two months before the exam date. The most important preparation for any CFA level comes in your final review of the material and mock exam practices in the weeks leading up to the test, so leave time for this. Lastly, make sure you keep a consistent study schedule and keep in mind that time spent studying is far more valuable than time spent watching TV or scrolling social media. Best of luck in your preparations. If you stay focused and prepare the right way, you will pass.

Click here if you are interested in seeing our guide on how to pass CFA Level One.