Hmmm, this one's a tough but here are our thoughts!
Every exam level presents its own challenges, so determining which is the most difficult is somewhat subjective.
While the CFA Level 1 and 2 exams cover the same content, Level 1 focuses more on a larger breadth of material at the foundational level, while Level 2 goes into greater depth on a narrower topic.
Since every candidate is different, each CFA Exam experience will be unique for each candidate. CFA Institute emphasises various areas tested in each exam, so the difficulty level (in some cases) depends on the particular test that a candidate takes.
Again, there are many factors to consider but we've rounded up our opinion as objectively as possible. We hope this helps answer your query!
The Level 1 CFA Exam mainly features questions over memorised definitions and formulas. This exam is really about information recall.
This exam statistically has the lowest pass rate at 42%. Although one could argue that this level is the hardest CFA Exam (especially if a candidate does not have a solid background or any work experience in finance or a related field), it is also the exam with the highest number of candidates sitting for it.
The relatively great news is that the concepts found in Level 1 tend not to be covered in as much detail, so they can be easier to learn. Yaay!
Level 1 is mostly focused on the memorisation of the content. As a result, those who move on to Level 2 usually have a solid foundation of knowledge. So, just because the test has the lowest pass rate doesn't necessarily mean that it is the most difficult exam.
Unfortunately, there is a large information spread between Level 1 and Level 2 CFA Exams. The main difference between Level 1 and Level 2 CFA Exams are the difficulty of concepts for each. While Level 1 requires knowledge of basic concepts, Level 2 concepts are covered more intensely.
The Level 2 exam assesses the ability to apply Level 1 knowledge to real-world situations, presenting 20 different item sets based on vignettes, scenarios illustrated with data, tables, financial statements, and textual descriptions. Each item set will contain between four and six multiple-choice questions relating to the information presented.
This is exactly why memorisation is no longer enough to pass the exam. Instead, a deep understanding of the principles is required to pass this level.
Generally, most CFA charter-holders call Level 2 the hardest of the CFA Exams because of the difference in exam style.
The Level 3 CFA Exam contains two types of questions: the morning session consists of eight to eleven “constructed response” short-answer, open-ended questions based on a fact pattern. In the afternoon session, candidates face 10 item sets with multiple-choice questions constructed and presented similarly to those in Level 2. The constructed response questions test candidates’ understanding of the topics and ability to explain the reasoning.
You should thoroughly understand the theories and topics associated with the Level 3 CFA Exam to help develop problem-solving skills when studying for the exam. One thing to note about this test is that the exam assesses your portfolio management skills and your ability to solve problems that might arise in real-world applications.
The Level 3 CFA exam can be extremely challenging because of the complexity of the content and the time needed to complete it. Some do consider the Level 3 CFA Exam the most difficult because of the time and thought needed to answer the constructed responses successfully.
While the Level 3 CFA Exam pass rates are the highest of the CFA Exams, only around 56% of CFA candidates pass the exam. Candidates should not take passing the Level 2 Exam to mean that the Level 3 Exam will be easier. For many, the Level 3 CFA Exam may be the most difficult because of the constructed response section’s open-ended structure.
Regardless of which CFA Level Exam you are taking, the key to successfully passing the exam is to prepare with an effective and efficient study plan. A well-structured study plan should balance your career, your school, and your personal life. Regardless of your particular situation(s), remaining diligent in accounting for any extra time to study is critical.
Many students make the mistake of thinking they can study after work or during the weekend without planning out all of their activities from the moment they wake up. Without seeing and adhering to a schedule, it's difficult to hold yourself accountable for the hours needed to pass the CFA Exam.
To get started, it helps to write down a daily schedule of activities. List each activity that you accomplish on a typical day, including weekends. Once you have captured an entire week of priorities and obligations, it is easier to integrate CFA Exam study sessions. With all of your weekly priorities and obligations in order, it’s much easier to integrate CFA Exam study sessions.
Once you've created a schedule or plan for how much time you need to study for each exam, consider how many weeks or months that is for each CFA Exam level. Because every CFA candidate’s schedule is different, it is impossible to say how long an individual needs to study and adequately prepare for the exam.
In order to succeed in CFA, it’s important to remember that all candidates are different, and you may need more or less time on each or all sections. That is totally normal, and it is much better to be realistic about your own unique needs than rely on what other people have achieved with their own CFA Exam studies.