CFA Exam Topic Weight Guide (Level 1, 2, & 3)

Why Topic Weights Are Important

Since each level of the CFA exam is going to take about 300 hours of study time, knowing how each topic is weighted for each exam level will allow you to budget and allocate your study time more effectively. This will help you study more efficiently based on your own strengths and weaknesses.

One of the major changes to the Level 1 scoring weight system is that the weights are given in ranges. This means that the testing candidates will no longer be able to figure out exactly how many questions will be asked per topic ahead of the testing date.

CFA Level 1 Weighting By Topic

The CFA Level 1 topic weights are bracketed as follows:

• Ethics: 15% to 20%
• Quantitative Methods: 8% to 12%
• Economics: 8% to 12%
• Financial Reporting and Analysis: 13% to 17%
• Corporate Finance: 8% to 12%
• Equity Investments: 10% to 12%
• Fixed Income: 10% to 12%
• Derivative Investments: 5% to 8%
• Alternative Investments: 5% to 8%
• Portfolio Management: 5% to 8%

As you can see from these weight ranges, the most important topics to do well on are the Ethics component and the Financial Reporting and Analysis component. Successful test-takers recommend you spend approximately one-third of your total studying on these two topics.

While the exact number of questions cannot be known ahead of time, there are some fairly accurate assumptions that can be made based on the weight percentage breakdowns. The minimum and maximum possible number of questions, along with a ballpark expectation of the number of test questions are:

• Ethics: 36 to 48, with 40 questions likely
• Quantitative Methods: 19 to 28, with 24 questions likely
• Economics: 19 to 28, with 24 questions likely
• Financial Reporting and Analysis: 31 to 41, with 36 questions likely
• Corporate Finance: 19 to 29, with 20 questions likely
• Equity Investments: 24 to 29, with 26 questions likely
• Fixed Income: 24 to 29, with 26 questions likely
• Derivative Investments: 12 to 19, with 14 questions likely
• Alternative Investments: 12 to 19, with 12 questions likely
• Portfolio Management: 12 to 19, with 18 questions likely

Before this change, the Ethics topic was worth 15%, Financial Reporting and Analysis was worth 15%, Equity Investments worth 11%, Fixed Income worth 11%, Quantitative Methods worth 10%, Economics worth 10%, Corporate Finance worth 10%, Derivative Investments worth 6%, Alternative Investments worth 6%, and Portfolio Management worth 6%.

This shows the trend of the CFA Institute toward a more heavy emphasis on portfolio management.

CFA Level 2 Weighting By Topic

The second level of the Chartered Financial Analyst exam has the following weight brackets:

• Ethics: 10% to 15%
• Quantitative Methods: 5% to 10%
• Economics: 5% to 10%
• Financial Reporting and Analysis: 10% to 15%
• Corporate Finance: 5% to 10%
• Equity Investments: 10% to 15%
• Fixed Income Investments: 10% to 15%
• Derivative Investments: 5% to 10%
• Alternative Investments: 5% to 10%
• Portfolio Management: 10% to 15%

Based on the above data, you can see that the most important topics in the second level of the CFA exams are Equity Investments, Financial Reporting and Analysis, Fixed Income, Portfolio Management and Ethical and Professional Standards.

Level 2 has fewer questions than Level 1, but it does come with substantially more reading. The test is broken into item sets or mini-cases, each with four or six multiple-choice questions.

It is recommended that you spend around 60% of your study time focused on these five areas. With a suggested study time of 300 hours per testing level, you should be spending 180 hours on these five subjects alone.

Keep in mind that if there is an area that you are struggling with, extra study time is never a bad idea. To get prepared, check out the study guides that are available on the CFA Institute’s website. They have the most valuable study materials available, as there is nothing in the guides that won’t appear on the tests.

CFA Level 3 Weighting By Topic

The shorter topic list for Level 3 does not mean increased topic weight for all the subjects. In fact, the combination of just two of the seven topics comprises more than half of the entire exam grade. The topic weights for Level 3 are:

• Economics: 5% to 10%
• Alternative Investments: 5% to 10%
• Derivative Investments: 5% to 10%
• Equity Investments: 10% to 15%
• Ethical and Professional Standards: 10% to 15%
• Fixed Income Investments: 15% to 20%
• Portfolio Management and Wealth Planning: 35% to 40%

As you can see, the scoring for Fixed Income Investments and Portfolio Management and Wealth Planning can account for up to 60% of your total score, so that should be reflected in your study time and preparation. For example, if you are spending 300 hours preparing and studying for the Level 3 exam, then you should be spending a minimum of 150 hours between those two topics alone.

The testing time has been recently reduced on the Level 3 exam, to just 4.5 hours. This breaks down into exam sessions that are approximately 135 minutes long. The questions are compiled into what is called “item sets”, which consist of either 4 or 6 multiple choice questions based around a vignette, short description, or premise.

The four-question sets are worth two-thirds of the points of the six-question sets. However, be prepared as there will also be some open-ended questions.