Level 2 Difficulty vs Level 1 [draft]


CFA Level 2 Difficulty in terms of Content


The concepts and pretty much the content is the same, but somehow the questions are way more difficult — more complex, trickier… you are never sure if the chosen answer is correct.

Quantitative Methods

It gets substantially more complex. I had a relatively easy time in Level 1, but i don’t seem to understand more of Level 2 content until the very end, and things seem to have suddenly clicked.


I am okay given my background (Econ major), but I can see how people getting real frustrated given there is too much material but small weighting. My colleagues (finance majors) keep saying how dry and boring the stuff is.

Financial Reporting and Analysis

Certified dead if one doesn’t have a good solid study in Level 1. I caught up and was feeling fairly confident, and I am struggling, mostly with pensions, intercompany stuff and multi-national operations. the IFRS vs GAAP also drives me nuts and I was told not to worry too much about it.

I’ve got to give a lot of credits to the fellow auditors — I mean, this stuff is hard!

Corporate Finance

If you are fairly strong in FRA and Equity, you are all set. I can’t say it’s terribly easy (nothing is for Level 2) but it is pretty doable.


I have the easiest time in equities. There are lots of readings, but I like this topic so it’s not a problem.

Fixed Income

I find it pretty ok until I hit the ABS/MBS stuff. I’ve spent a lot of time working on examples and practice questions and still not convinced that I get it.


Level 2 Derivatives has gone beyond the introductory level in Level 1. They are tough but it’s something that you can nail if the concept clicks. Beware of lots of formula. Need to allocate sufficient time for this section.

Alternative Investments

Some parts seem to get really complicated and I am not sure if I totally understand, but overall it has a small weighting and I can get away with it.

Portfolio Management

It took me a long, long time to go through the first PM reading, but things start to make sense afterwards. So overall it is manageable.

Note that Portfolio Management is a huge part in Level 3 comprising half of the questions. So we HAVE to make sure you are more than just ok with this section.

CFA Level 2 Difficulty in terms of Exam Format

One thing that really complicates the Level 2 exam is how the questions are formatted.

We are no longer getting stand-alone, independent multiple choice questions. Instead, they are now in “item set format”, meaning there is a case statement following by a number of multiple choice questions related to that statement.

These questions are (thankfully) not related to each other — as in if you get one wrong, you can still have the others correct. But in a way they are indirectly related through the case statement. Somehow this arrangement allows the examiners to ask really complex questions.

In short, make sure you do lots of practice questions and mock exams to get used to this format.

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Sam H

I was originally from Illinois, now working in New York City as a financial analyst. I am aiming to take (and pass!) the CFA Level 1 exam in June.

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