What Is the CFA Exam? All Three Levels Explained

This guide covers what each level involves, how the three differ, what the pass rates look like, who is eligible, and how to approach preparation.

What is the CFA designation?

The CFA designation is awarded to investment professionals who have:

• Passed all three levels of the CFA examination
• Accumulated at least 4,000 hours of relevant professional experience across a minimum of three years
• Submitted professional references
• Committed to the CFA Institute Code of Ethics and Standards of Professional Conduct

Charterholders work across portfolio management, equity research, fixed income, risk management, wealth advisory, and investment banking at institutions around the world. The charter signals a rigorous command of investment analysis, ethics, and professional standards.

The three levels at a glance

Formats and schedules evolve, so always verify current details at cfainstitute.org.

Candidates must pass Level I before sitting Level II, and Level II before Level III. There is no time limit on completing the program; most candidates finish all three levels in three to five years.

CFA Level I: investment tools and foundations

Format: 180 multiple-choice questions across two sessions (90 questions each, 2 hours 15 minutes per session). Three answer options per question; no negative marking. Frequency: multiple windows per year.

Level I is deliberately broad (ten topic areas from ethics to derivatives) to ensure candidates have the tools for deeper analysis later. The skill being tested is recall and speed: roughly 90 seconds per question. See our full topic-by-topic curriculum breakdown.

CFA Level II: asset valuation and application

Format: item-set questions (vignettes). Each presents a detailed case with exhibits, followed by a linked set of questions; roughly 88 questions across two sessions. Frequency: multiple windows per year.

Level II is significantly more analytical. Rather than testing whether you know a concept, it tests whether you can apply it to a realistic, multi-layered scenario. The vignette format demands reading dense material under time pressure and identifying which information matters.

CFA Level III: portfolio management and wealth planning

Format: a mix of item-set questions and constructed-response (essay) questions requiring written answers, graded by human graders against guideline answers. Frequency: multiple windows per year.

Level III shifts from analysis to decision-making. Where Level II asks “how do you value this asset?”, Level III asks “given this client’s situation, what should you recommend, and why?” The essay section is unlike anything at Levels I or II and requires deliberate, separate practice; our guide to Level III essay questions covers it in depth.

Who can take the CFA exam?

At the time of Level I registration you must meet one of the following:

• Hold a bachelor’s degree (or equivalent) from an accredited institution, or
• Be within a set window of finishing your bachelor’s degree, or
• Have four years of relevant professional work experience (it does not need to be investment-related)

There is no minimum grade requirement, no required undergraduate subject, and no age restriction. Candidates come from every academic and professional background.

How hard is the CFA exam?

Demanding, by design. The full journey typically requires 900–1,100 study hours across three to five years. At every level, a large share of candidates do not pass on a given attempt: recent sittings put Level I around 39%, Level II around 43%, and Level III around 50% (see our full pass-rate breakdown).

The material is not impossible; the volume, depth, and rigor of application are simply high, and most candidates underestimate the preparation required. Those who succeed share common traits: they start early, they practise relentlessly, they track performance by topic, and they treat weaknesses as data rather than discouragement. Our study-plan guide turns those traits into a concrete schedule.