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What are the differences between the CFA Program Level 1 and Level 2 exams?

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The CFA, or Chartered Financial Analyst, qualification is the gold standard in finance credentials, designed for experienced finance professionals wanting to take their career to the next level.

Here’s a quick breakdown of some of the main differences between Level I and Level II.

Question structure

At Level I the exam questions are brief and multiple choice. For example:

Question 1: If the market yield does not change, the price of a Treasury bill:

A. Will increase as the bill approaches maturity.
B. Will decrease as the bill approaches maturity.
C. Stay the same as the bill approaches maturity.

And you just need to choose the correct answer.

At Level II the questions come in the form of a mini case study, with financial statements, data and information you need to read and absorb. You’ll need to select the correct data to answer the questions that follow.

Exam format

Level I consists of 180 standalone questions, completely unrelated to each other. They are multiple choice, usually choosing between three possible answers.

Level II questions are organised as item sets. Each set is based on a shared common mini-case study and contains four to six sub-questions. Generally these sub-questions will all relate to a single topic.

This focus on individual topics makes it risky to skip a particular reading, because each item set represents 5% of the points on the exam.

Most candidates report a step up in difficulty between level I and level II. Level I contains fundamental financial knowledge. Level II's focus is valuation and as a result, is a little more computational and contains information that candidates are likely to be less familiar with from previous studies and experience.

- Jonathan Bone, Course Director, Kaplan CFA Program

When you can take the exams

You can take Level I four times a year, but there are only two sittings a year for Level II.

This also impacts resits, as you can’t retake the exam in the adjacent timeframe. So for Level I you would need to wait 6 months. But for Level II retakes you’d have to wait a lot longer.

Topic weighting

The Level I CFA exam has fixed topic weightings. For example: 6% in Portfolio Management, 6% in Derivatives, and so on.

At Level II, topics have a range of weightings. For example, Level II Portfolio Management can have a weight anywhere from 5–15%. Each 5% weighting represents one item set on the exam.

Memory recall vs. analysis

Level I relies on you to remember terms, formulas and definitions, and choose the right answer from a short list of possibilities.

Level II is much more about analysis, and deciphering information to come to the correct conclusion. You have to demonstrate your ability to apply tools and relationships to analyse financial data and value assets. You’ll need to be able to link theories and concepts to provide a cohesive answer.

The basic message I would have for level II candidates is to expect level II to take at least 300 hours to prepare for even if they found they studied less hours at level I and were successful.

- Jonathan Bone, Course Director, Kaplan CFA Program


The Level I exam is a broad introduction to the concepts, and should be relatively easy to understand. However the Level II exam is just as broad, but contains numerous concepts that can be tricky to grasp.

To give you an idea, you’ll need to understand, and be able to apply swap valuation, CDS valuation, binomial options valuation, and Black–Scholes–Merton concepts to your answers.

For more information about levels and exams, visit our CFA Program pages.