Head of the CFA Program has important advice for Level II test-takers

Some people call the Level II CFA exam “the hardest exam you’ll ever take.” And on the first Saturday in June, tens of thousands of people all over the world will be taking it.

But the exam could be a lot easier on candidates if they just simply read the questions carefully, according to Lisa Plaxco, CFA, head of the CFA Program at CFA Institute.

Unlike the Level I exam, which uses 240 multiple-choice questions to determine a candidate’s knowledge and comprehension of the material, Level II focuses on application and analysis.

To test such higher-order thinking, the Level II exam consists of 20 “item sets” that each consist of a one- to two-page case study and six multiple-choice items about that case. In addition, the Level II curriculum has a greater focus on asset valuation rather than the foundational tools taught at Level I.

Although the questions are not written to be misleading or tricky, Plaxco says it is important for a candidate “not to trick oneself.” She cites an example from one of the 469 “Learning Outcome Statements” that make up the Level II curriculum.

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“The curriculum includes learning outcome statements such as

, ‘Calculate and interpret the information ratio (ex post and ex ante) and contrast it to the Sharpe ratio,’” she said. “There are three command words: calculate, interpret, and contrast. When we interpret that into a question on the exam, you don’t know which of those things you might be asked to do.”

To clear this hurdle, Plaxco recommends focusing on the primary material included with the CFA Program curriculum provided to all candidates upon registration. Prep courses and other material can be a great supplement, but the curriculum material “will be useful throughout your career, and that is what you want to focus on,” Plaxco said.

 

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