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CFA Level 3 Essay: Question Format, Grading and Tips

• By John / Stephanie

The Level 3 CFA Exam has two parts: the structured response (essay) exam in the morning and item-set multiple choice questions in the afternoon.

This post focuses on the CFA Level 3 essay section: the format, grading, preparation tips, and exam strategies for your test day.

CFA Level 3 Essay Format

This 3-hour exam has 10-15 questions, each divided into two or more parts. Points are awarded for each part of each CFA question.

There is no guarantee, but you can expect to see the following subject areas on your Level 3 exam: private wealth, institutional investors, economic analysis, fixed income, and risk management.

Ethics and GIPS will most likely be tested in the item sets.

Grading Your CFA Level 3 Essay

The full mark for your CFA essay is 180. Answers are graded on content only. That is, the CFA essays are not graded for language, style, and certainly not for length.

The examiners will indicate the number of factors in each question. For example, if three factors are required, you don’t need to list more than three. Any further points, no matter how good they are, will be considered irrelevant and not graded.

Also, if you list four factors, and the second one is incorrect, the examiners will count the first three and ignore the 4th, even if it is correct.

On a similar note, no points are awarded for general knowledge that is not a direct response to the question.

Tips for CFA Essays from a Former Grader

Here is an interesting note from JoeyDVivre , a (former) board member of Analystforum and a former CFA exam grader:

Before your essays are graded, there is an official answer that is distributed to all the graders that will be grading your question (graders each grade one question repeatedly for a week). Then the head grader and a couple of his deputies search through the answers and find examples of various classes of mistakes, plausible but different answers, better answers, etc.. These are then assembled into a packet and given to each grader. The graders then assemble in a room and spend a day going through the packet. A discussion is held about each answer and the graders try to reach consensus about how that answer should be graded. The head grader decides when each discussion is over and declares the result. These are compiled into a set of standards that each grader is supposed to abide by. There are a series of random checks while the grading is going on in which the head grader and his depuites review your grading and determine how well you are doing in abiding by the standards. They can change your grade but rarely do. I don’t know what happens to that set of standards after the grading is done, but it probably goes into a folder that collects dust. Some months later, an official answer comes out. I also don’t know who writes that but it is an answer that would be perfect according to the graders discussions. There are many, many ways of earning complete credit on an essay answer without being nearly as neat and organized and complete as the offical answer. The offical answer is not the kind of answer that someone comes up with on a timed exam and is always the result of group discussion and careful rewrites. Do not judge your own efforts against that answer. Many of those answers are even too complete so they would just take too much time to do on the exam. I think the best score I have ever seen on a CFA essay exam is in the 80’s. Such an exam is a joy to behold and is a really, really fine piece of work. You are not shooting for 100% on these and you shouldn’t write essay answers as if you were (it will take too much time).

How to Prepare for Your Level 3 AM Session

The essay section is a headache for many CFA candidates, but pretty doable for the prepared.

1. Practice using (free) past CFA papers

The best and simplest way is to write out the answers of past essay questions.

Some may be tempted to read the standard answers without working through the questions. Big mistake. You need lots of practice to get the hang of it.

There are past papers from CFAI website for free download. Answer them to the best of your abilities. Then, check your answers against the guideline. It helps to track how your performance improves from essay to essay.

2. Keep your answers short, clean and concise

Often times, the official answer from the guideline is much shorter than candidates’ version. Again, this can be learned through practice. Answer the questions directly and not try to show off how much you know. It takes practice to tune into this style of writing.

3. Pay attention to command words

Words (e.g. formulate, calculate) mean different things. They are called “command words” and they determine how you should answer the questions. Make sure you check them out (need CFA login) on the CFAI website.

4. Write in bullet points

Bullet points are great ways to present your ideas in the CFA essay exam.

The examiner will tell you how many factors (e.g. examples/reasons) they are looking for in each question. You can present them each with a bullet point.

5. Time your session

It’s a good habit to practice on time management. Having said that, if you type at average speed, time shouldn’t be a factor.

How to Ace Your CFA Essay Section on Exam Day

Here are additional tips on test taking:

1. Understand command words and answer directly

Formulate a direct response to the command words. It is important to answer to the point.

2. Make sure your assumptions are consistent

It helps the grader if you state the assumptions and make your point clear. Common mistakes include:

• Answer a question they wish they had been asked instead of the question that was asked
• Contradictory statements
• Statements with wrong casual relationships (e.g. recommended A, but justified B)

3. Answer all questions

Even if you aren’t sure, take your best guess and go for it. There will be partial credits even if you aren’t completely on.

We recommend working on questions in order unless you have a particular weak area. By taking questions in sequence, you won’t accidentally miss a part of the question. You also gain confidence as you progress.

4. Think before you write

It is true that graders only look for content. As long as the writing is legible, it’s fine. You are also allowed to cross things out.

While you shouldn’t sacrifice speed for calligraphy, a paragraph that is crossed out, rewritten and recrossed out etc confuses the grader.

Therefore, we suggest spending a few seconds in formulating the framework of your answer. Keep things organized and neat in order for the grader to understand your train of thoughts and award you the necessary points.

5. Don’t be a perfectionist

At the same time, don’t keep writing just because you know the concepts well. If the examiners ask for 3 factors, use the least number of words to present such three factors. No points will be given for further elaboration.

Don’t fall in the trap of spending too much time on your strong area, and leaving too little time for weaker areas.

CFA Questions from Readers

1. should i use pen or pencil for the l3 essay.

We discuss this in our e-newsletter. Officially, CFAI is fine with either pen or pencil provided they are HB or No. 2 pencil, or a blue or black ink pen.

2. How do we approach calculation questions?

Show the steps in the calculation. You can get partial credits even if you get the wrong answers. Although it doesn’t hurt, you don’t need to list out the formula.

3. It’s the last 10 days before the exam and I am running out of prep time. Should I focus on essays or more multiple choice questions?

If you haven’t worked on the mock exam, that would be the priority.

If it is strictly exercises on essay vs EOC questions, I would go for the essay. EOC questions tend to test on the details covered in each study session. In the actual exam, such level of detail is not necessary.

Also, answering questions in the form of essays refresh concepts in a different perspective, which indirectly helps the item-set section. The reverse is less true in our opinion.

Do You Have Other Questions about the CFA Exam?

Feel free to drop a note in the comment section below. We’d love to help!

For Your Further Reading

• CFA Level III overview
• CFA mock exams

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Level III Essay Exam - Tips and Suggestions

Advice for the Level III Essay Exam

The Level III exam is made up of two parts. The first is a structured response (essay) exam and the second, a vignette multiple choice exam. This post focuses on the structured response, which, in my opinion, is the greatest obstacle lying between you and the CFA charter.

Until now, you’ve only been answering multiple choice questions in your CFA exams. At Level I and II, if you had an idea of what the question was about, there was a reasonable chance of you picking the right answer.

Level III is an entirely different story. Suddenly, not only do you need to know your concepts well, but you need to communicate those concepts in a clear and precise manner . Every year approximately 50% of students who have cleared Level II, fail the Level III exam. This is due primarily to insufficient preparation and poor exam-taking approaches.

Know your concepts. There is no excuse for not knowing the core concepts before the exam.

Practice, practice, practice. This includes examples and practice problems. As part of your practice, work through essay exams from 2006 to 2015. The CFA releases past exams yearly. Get your hands on these and go through them thoroughly. If you’re pressed for time, doing the past papers takes precedence over the curriculum exams and practice problems. As you practice, you’ll automatically understand which mistakes to avoid. (Note: the curriculum changes every year so if a question looks unfamiliar check the reading and learning outcome reference in the guideline answers.)

Pre-Exam Tips

Log on to the CFA Institute website > Candidate resources (link at the end of this post), and go through the resources there. These include exam tips, mock and essay exams, documents of LOS command words and acronyms that are common in the CFA exams. It is important that you familiarize yourself with the exam, its structure and its execution.

Though it seems tedious, practice writing . It’s a three-hour exam of just penning down answers on paper, and you don’t want your hand to start cramping or your handwriting to become illegible mid-exam.

During the Exam – Manage your time & follow instructions.

On the first page of the exam, you are told what topic each question is based on, and how many questions there are. Spend the first few minutes jotting down the start time and end time for each question. It sounds inconvenient, but a plan will make you more likely to stay on track and not stress out about how much time is left towards the end of the exam.

You don’t have to do the questions in order, although it is highly recommended.

Exam Questions

Each question typically has two to six parts. Each question will be preceded by a short text explaining the scenario. First, scan the question and understand what is being asked. Then as you read, underline key information that you will need to solve the question.

Each question comes with a footnote telling you how long to spend on the question and where to answer it. It’s a good idea to stick to the time advised by the examination. Another thing to note is that the time allotted tells you how many marks a question is worth. For example, 5 minutes means 5 marks - so allocate your time accordingly.

When answering the questions:

Pay attention to command words. Words such as formulate, calculate, etc., all mean different things, and these words determine how you should answer the questions. The command words document on the CFA Institute website, is a must-read for every student.

Answer everything . Answer all subparts of all questions. Understand what the question is asking and state your answers clearly. Even if you are stuck, don’t skip the question, but write down the best answer you can think of. Best case scenario, you’ll get a few marks for it.

Don’t get hung-up on a question you can’t answer. If your allotted time for that question is over, jot down the best answer you have and move on. If you have time in the end, come back and take another look.

Keep your answers short and to the point. Bullet points are strongly recommended. Avoid irrelevant or tangential information. If the question asks you for 2 points and you write 4, the third and fourth points will be struck out by the examiners.

Within a question your assumptions should be consistent. State important assumptions you make, and avoid contradictory statements.

I have made a video blog of this same post, so be sure watch that too!

All the best,

Arif Irfanullah, CFA

Link to the CFA candidates login page: https://goo.gl/lNzSYi

I take time to read the case. I have to read and reread to answer correctly. What do you recommend me to do so that I can read the case faster and understand the main points?

Was thinking to post a question on where to start with essay questions - read question first or go through the entire case; I think I will scan the question first then case and the question again.

CFA essay questiones usually mark in bold some key words like: describe, calculate, discuss… is there any recomendation on how to answer each question depending on how is asked? Looking forward your response,

This is critical advice.

Unfortunately, the command word definitions on the CFA Institute website do not offer a lot of practical advice on how to respond to specific command words. As a supplement to that, I wrote a Survivor’s Guide to the CFA Institute Command Words that discusses how to respond to each command word (or, at least, to each one used on the actual morning exams over the last 20 years).

Not “usually”.

I wrote my Survivor’s Guide to answer exactly that.

helpful and practical answers!))

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Level III of the CFA® Exam

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What Should You Expect from Level III of the CFA Exams ?

As you can see, the curriculum from Level III is much different from previous levels:

* The exam weights are subject to change on a year-to-year basis.

Questions Format

Half of the Level III CFA exam will be based on item sets. Just like in level II, you will be given cases followed by six multiple-choice questions.

The other half will be essay-type format, which requires candidates to write down long-form answers to complex questions.

Becoming a CFA Charterholder

The Level III exam is the last exam of the CFA Program conducted by the CFA Institute. Candidates who have relevant 4 years of experience can finally put the three letters next to their name if they are successful in their Level 3 exam. Apart from having the most prestigious and valued qualification in the finance and investment industry, all these efforts put throughout the process to pass the exams ensure candidates are walking a financial encyclopedia which grants them to become more confident in their professional lives and job interviews. Plus, it is nice to meet a CFA charterholder who also follows the same path in the networking events. Global recognition is another benefit. CFA charter is recognized by not only financial institutions globally but also by any corporation which reaches a certain size, required to allocate its sources efficiently. If randomly selected finance job postings are reviewed, it is not unusual to see that a considerable number of them require the CFA designation or at least mention it. Demand for CFA charterholders seems to increase in the future because they continue to contribute to society by adhering to high ethical standards.

General Information about the Level III CFA Exam

The Level III CFA exam is only offered in June. The afternoon session, similar to the Level II exam, includes item set questions. Each item set has 6 multiple-choice questions, and there are 10 item sets in total.

The unusual part of the Level III exam is the morning session, where candidates have to write answers in essay format. The essay format consists of 8 to 12 questions, and each question has two or more sub-parts.

Unlike other CFA exams, the curriculum for level III focuses mainly on portfolio management and wealth planning. Topics such as Quantitative Methods, Economics, Corporate Finance, Financial Reporting, and Analysis have been removed from the curriculum. Ethics, Alternative Investments, Derivatives, Equity Investments, and Fixed Income topics mostly preserve the weightings assigned in previous exams. Meanwhile, Portfolio Management and Wealth Planning topics’ weightings now comprise 45%-55% of the Level 3 exam.

Answering Essay Format Questions

Knowing how to answer essay type questions is one of the most noteworthy criteria for success in the Level III exam. Rule number one is not answering these questions in essay format. Candidates waste their time if they try to answer these questions by using long sentences and paying too much attention to grammatical choices and vocabulary. Rather, they should give concise answers focusing on what CFA Institute wants to assess. It is important to keep answers understandable, but as CFA Exams do not assess the ability of candidates to master English spelling, candidates should not spend too much time on word choices.

Exam success is directly connected with improving essay performance before walking into the exam hall, for evaluating essay questions is not as easy as for multiple-choice questions. Self-grading comes into play here. To do self-grading correctly, candidates must be objective at first. Only if they do self-grading properly can candidates discover their gaps in knowledge and develop an innate knowledge that is essential to give structured responses.

Partial credit is another point to be considered. Candidates get used to multiple-choice questions, which are evaluated based on marked answers. However, for essay format questions, they should show all their calculations step by step to get partial credit rather than only writing the results of the calculations. Also, it is beneficial for candidates to write their best guesses if they are not sure what the answers are. Because it is harder to make guesses for essay questions than for multiple-choice questions, candidates should still try their best guess without wasting too much time.

Level III CFA Exam Results

Besides its disparate topic weightings and newly introduced question format, another variation of the Level 3 exam is the date on which results are issued. Test takers receive their results 90 days after the exam date, whereas Level 1 and Level 2 exam results are issued after 60 days. The reason for the 30-days delay is the essay format questions which require more time for grading.

Analyzing pass rates is also a hot topic among candidates. The level III exam pass rates – above 50% for the past few years – are the highest among all three CFA exams. One reason for that would be that level 3 candidates are the ones who successfully passed the first two exams. As such, they have already mastered the necessary skills to pass CFA exams.

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CFA Level 3 Study Guide: Top Tips From Candidates

I know the feeling – you’ve just beat the beast that was Level 2 – that was the hardest one, isn’t it?

Well… yes and no.

While on paper  Level 2 is harder due to the sheer amount of material , Level 3 is a challenge for other reasons.  CFA Level 3 tends to be underestimated  and also the most misunderstood – it’s not that candidates don’t spend enough time preparing, but rather sometimes don’t spend the time to understand  how  Level 3 works.

That’s where these 10 golden rules of Level 3 come in in our CFA Level 3 study guide – distilled from thousands of experienced candidates and CFA charterholders – that every Level 3 candidate needs to bear in mind.

You’re nearly there!

CFA Level 3 study guide: Our 10 golden rules, summarized

#1 – CFA Level 3 is like Level 2, but with a twist

Level 2 is heavily quantitative and mostly calculation-based .

On the other hand,  Level 3 is very qualitative and more conceptual in nature  – understanding the spirit and concept behind the topics is what will get you points in the exam.

Even though Level 3 covers less material overall,  the difficulty for most candidates stems from the “constructed response” format unique to Level 3, which forms 50% of the exam . Constructed response is basically “non-multiple choice”, where you have to write your answers down (see #5 for more details).

In Level 3, the range of what can be asked is extremely broad, which is worsened by conceptual readings that can feel quite vague and dry to go through at times.

On average, CFA Level 3 candidates spent 344 hours for their exam preparation.

​#2 – Utilize the CFA curriculum more (selectively)

The CFA Institute curriculum materials are particularly useful for Level 3 candidates  precisely due to the conceptual nature of the exam, as it gives you a flavor of the style of questions and how to answer them.

Whilst some candidates swear by it and use it exclusively for Level 3 preparations, other candidates may find the endless chunks of text unbearable and choose third party materials instead. I’ve seen both camps of these Level 3 candidates pass, so choose whichever works best for you. 

However, if you’re using third party materials only,  it is worth considering utilizing the CFA curriculum materials selectively to complement your studies , namely:

• Do the End-of-Chapter and ‘Blue Box’ questions after completing each reading (and more) . This gives you an initial gauge of your understanding so far (useful info when it comes to practicing), as well as an opportunity to get used to the style of questions. Leaving this too close to the exam may cause a panic scramble later. You can also re-do these questions after completing all your readings for another soft assessment of your overall understanding of the curriculum.
• Refer to the Curriculum materials to clarify  any ambiguous areas, especially for constructed-response practice questions or areas you choose to make summary notes.
• Refer to the Curriculum for Ethics and GIPS  to supplement your understanding as GIPS can be a pain. Read our top CFA Ethics tips for guidance too.

#3 – Do not underestimate your fatigue

After 2 years (or more) of sacrifice and testing your willpower, usually this round will be the hardest in terms of the mental strength needed to see this through properly. This can lead to cutting corners in your preparation that will affect your performance.

Instead draw strength from the fact that  if you do this right, this is the last time you’re going to have to do this, ever.  So knock this last one right out of the park. ​​ ​Pro tip: Don’t start studying  too  early , for example in August (9 months in advance). Because this is likely to  lead to burn out  towards the end, when you need the willpower and focus most.

#4 – Consider using our recommended  Level 3 topic study order

Since 2019,  Level 3 curriculum has been going through a massive overhaul in terms of content and topic weight changes .

We have taken into account the topic weights and difficulty of each topic and devised an  optimal Level 3 topic study order  to utilize your time more efficiently. 

Check out her  Level 3 Best Topic Study Order  article for more details.

​#5 – Understand the constructed response format and its implications

The construction response paper’s “essay” format will be hard, but not hard in a way you will expect it to be.

In fact, ‘essay question’ is a misnomer – it’s just  not  multiple-choice where written answers are required.

They fall into one of two broad categories:

• Calculation-based answers , in which case show all your workings/methods to make sure you get all the points you can;
• Word-based answers , in which they’re looking for specific answers to the questions.

It’s the second type that most candidates have trouble getting used to. You need to make sure understand exactly HOW to answer the short answer questions in the first exam session:

• Be concise and get straight to the point : Remember, it’s not really an “essay” question. The examiner is looking for key concepts, not a Pulitzer novel. You will find that for most of these you either know the answer (in which case it takes just a few minutes to type it down in bullet-point form) or you don’t. And if you don’t, writing about all these other concepts that you know isn’t going to help.
• Type efficiently to save time, but show your workings and thought processes , if you have time: You can use simple sentences in bullet points and common notations (e.g. formulae, arrows, equal signs, etc.) but make sure to write enough on the page to get full points. Identifying the right answer is one thing, you need to show that you actually understand the concept and apply it directly to the question.
• Be familiar with computer-based-testing format : This is all new to us this year, hopefully typing is your strong suit!

​#6 – Don’t forget preparations for the item set paper, though

For most Level 3 candidates (including  Sophie’s past experience ), constructed-response format in the first paper tends to be the tougher section.

While practicing for the essay section is important, please  don’t forget the item sets because you’ll need to do well here to boost your overall score.  Most of the points on your exams are secured in the item-set paper because everybody drop 20-30% on average in the first paper. 

CFA Institute recognizes this trend and has changed the format to include both a mix of item sets and essay questions in each paper since Feb 2023.

​#7 – Mock till you drop (under time constraint)

I won’t delve into the specifics of practicing for the item set paper format (vignette-supported multiple-choice questions) given your previous Level 2 experience. You know what to do here. Having done it before doesn’t mean you pay less attention to it though, especially given its importance (see #6). 

A common challenge for Level 3 candidates is how to go about practicing the constructed response section in the first paper. Here are a few tips and advice:

• Save at least 6 weeks for practice exams and revision : from our experience, it is best to go through the readings quickly once and start trying out practice questions under timed constraints. You’ll learn the most during this period as you “plug the gap” in your knowledge.
• Do actual timed practice papers  with typing  for first paper : You need to practice this for computer-based exam .
• Grade your constructed response practice papers conservatively (like a robot) : It is crucial to bear in mind that when you’re practicing past papers, what you’re really learning is the  way  to respond to the exam, not  what  exactly will be tested. In general, don’t mark yourself as right if you didn’t mention the concept the guideline answers is looking for by name.
• Make summary notes on areas you’ve gotten wrong after each practice paper : this is a neat way to “plug the gap” in your knowledge as you go along, and handy for last minute revisions later.

#8 – Learn to skip questions to maximize your score

We talked about  importance of time management since Level 1 . In Level 3, you’ll need to hone this technique further.

For item sets , you already know how to do this as it is the same as Level 2:

• ​give yourself a set time per question to choose an answer (say 1.5 minutes since you need to allocate some time to read the vignette as well),
• choose the best answer you can when the time is up,
• circle the question (so you can come back to it later) and move on to the next. 

For the constructed-response questions , the spirit of this technique is similar:

• When time is up, skip the question (or sub-question) : you need to learn to recognize when you’re about to waste a bunch of time, make peace with giving up (for now) and moving on to the next question. This may sound counterintuitive to maximizing scores, but it gives you a chance to skim the WHOLE paper’s questions quickly and tackling the ones you’re confident in, leaving you time to ponder over those you skipped earlier to gain as much partial credit as you can. A good rule of thumb is to give yourself 30 seconds to scan the question and decide if you know how to tackle it. If not 100% sure, move on and come back to it later. 
• You need to reach the end of the exam with reasonable time : because it is likely that each question has some easier parts to it which you can score on. The opportunity cost of missing these “sure win” answers are high, if you didn’t leave enough time to have a chance to write your answers down.

​#9 – Level 2 commandments still apply

Half of the CFA Level 3 exam is the same format as Level 2, so you definitely need to know the  10 golden rules of Level 2 , too.

​With the exception of Level 2 rule #1 (which is already covered and updated above), almost all rules from Level 2 should apply.

​Refer to the  Level 2 Commandments  now.

​#10 – Expect chaos regardless: keep calm and carry on

The exam questions can literally ask about any part of the CFA Institute syllabus.

While this is fine in the multiple-choice second paper ( guessing strategies anyone? ), but you’ll be drawing a blank in the constructed response paper. 

The important thing is to  expect this to happen  on exam day and not panic. It may be hard to accept, but you won’t know everything regardless how much preparations you have put in. 

When this happens,  just focus on the technique of maximizing your score (see #8 above) , and try to keep calm and carry on till the end. Now is not the time to give up, it is the last exam and you may have just scored enough to pass by applying this technique alone. 

Level 3 is tough, but the good news is it is the last one! Do you have other tips to share? Let me know via comments below!

Meanwhile, here are other useful articles that should help your Level 3 preparations:

• CFA Level 2 – Top 10 Tips and Advice From Previous Candidates  (for PM paper prep)
• Free and Upgraded –  300Hours CFA Study Planner
• CFA Level 3: How to Prepare and Pass CFA in 18 Months
• CFA Level 3 Topics: What Is The Best Study Order?
• 2023 CFA Exam Curriculum and Topic Weight Changes
• Fast Track CFA Charter: How to Pass the CFA Exams in the Fastest Way Possible
• Free 300Hours Guides , including the 10 Commandments
• Free CFA Study Materials 2023

3 thoughts on “CFA Level 3 Study Guide: Top Tips From Candidates”

Following your tips Sophie….

Actually, I invest a lot of time in solving constructed response questions… Any advice to improve the journey of this part?

Which are the best 3rd party exam prep providers for CFA Level 3? I used Wiley and Salt Solutions for Level 2 and really liked Salt Solutions. I am considering Salt Solution for Level 3 but I’m apprehensive because I couldn’t find any reviews from Level III candidates.

Hi Alisha, Salt literally just launched their Level 3 offering a month ago in January, that’s why there isn’t much reviews yet. But do expect the same useful, beautiful interface coupled with quality practice questions and videos. Worth giving them a go if you already liked your Level 2 experience with them. Let me know how it goes!

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Level III Past Paper Essay Exam Question Videos

This course folder contains videos created by IFT that show how to solve the past actual CFA Institute Level III Essay Exam questions. You will find the exam year and question number referenced in the title of each video file.

IMPORTANT NOTE:  The 2024 Level III exam curriculum has changed considerably from previous years. What this means is that concepts contained in the majority (more than 50%) of the videos here will not be relevant for the 2024 Level III exams.  You should refer to the “Past Level III Essay Questions” document for questions that are fully/partially relevant for the 2024 Level III CFA Exam [ click here ]. For partially relevant questions, the document mentions which parts are based on the 2024 curriculum and which parts are not. Attempt the relevant questions then watch the video solutions.

We have also added suffixes to the video file names to help you quickly identify the relevance of questions: FR = Fully relevant, PR = Partially relevant, NR = Not relevant . For example, 2012Q4_FR.mp4 means that the question is fully relevant for 2024.

Regarding the past paper questions that are ‘Not relevant’ for 2024: You can still view these videos if you have time to review the ‘Strategy and Tips’ recommended by IFT which is important for exam success.

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Exam Structure

Exam curriculum, asset classes.

• Portfolio and Wealth Management
• CFA Level III Exam FAQs

The Bottom Line

• Degrees & Certifications

What to Expect on the CFA Level III Exam

The CFA Level III exam is the last in the series of three exams conducted by the CFA Institute . Coupled with at least 36 months of relevant work experience, successful completion of the final level yields a charter membership.

While the first two levels revolved around basic financial knowledge, investment valuation comprehension, and the application of both, the CFA Level III exam focuses on portfolio management and wealth planning.

Key Takeaways

• The CFA Level III exam is the last in the series of three exams conducted by the CFA Institute, and it is held twice annually—in February and August of 2024 and 2025.
• Coupled with at least 36 months of relevant work experience, successful completion of the final level yields a charter membership.
• The CFA Level III exam focuses on wealth planning and portfolio management, and many of the questions are posed in essay form.
• The exam is divided into two sessions; over two hours each.
• The syllabus is very comprehensive and introduces new concepts. These include behavioral finance, risk management concepts, and tools and techniques for managing risk are also discussed.

The format of the exam, which is offered in February and August of 2024 and 2025, is a mix of item set questions (similar to Level II) and essay type questions. Like the other exams, the Level III exam is conducted in two sessions.

Each session lasts for 2 hours and 12 minutes, with a combination of multiple-choice question sets and essay sets. Altogether there are 11 question sets and 11 essay sets, with each set worth 12 points.

Starting in 2025, the institute will introduce two specialized pathways: private markets and private wealth. CFA candidates will choose their preferred pathway at registration. 65-70% of their exam material will relate to the shared core material, while around a third will relate to their chosen pathway.

The exam is graded for 264 points, which corresponds to one point per minute.

As mentioned earlier, the focus of the exam is on portfolio management and wealth planning, but it also covers seven topics that are grouped into two other areas, namely, Ethical and Professional Standards and Asset Classes. The following table provides weighting of these topics and broad areas for the exam:

Investopedia / Sabrina Jiang

As is evident from the table, the Ethics and Professional Standards gets as much importance as in the other levels of the exam. The investment tools are not tested separately, except economics, which is a part of the portfolio management and wealth planning section for level III.

The majority of the exam revolves around portfolio management and asset classes in the portfolio context.

In level III, ethical and professional standards primarily consist of the Code of Ethics and Global Investment Performance Standards (GIPS) . Standards account for 10-15%. The Code of Ethics section will most likely be an item set in the second session. However, GIPS could be tested either as an essay question in the first session or as an item set in the second session.

The average passage rate for the CFA Level III exam in 2023 and 2024.

The exam tests your knowledge on all of the major asset classes, including alternative investments, derivatives, equity investments, and fixed-income investments. However, the focus is now on the portfolio management aspects of these investments.

For example, around 15-20% of the exam is dedicated to fixed-income portfolios, covering investment objectives, benchmarking, return analysis, portfolio immunization strategies, relative value analysis, and so on. The syllabus also covers strategies used in international and emerging markets and how derivatives are used to manage interest rate and credit risks in fixed-income portfolios.

The second asset class is equity securities, which are an essential component of most investment portfolios and crucial for the portfolio's success. The discussion here surrounds equity investment strategies, evaluation of equity fund managers, and equity indexes. The syllabus also discusses the corporate governance issues related to conflicts between managers and shareholders that erode value and have a direct impact on equity portfolio managers . Finally, there is a discussion on measuring and managing portfolios in international and emerging markets.

The section on alternative investments primarily discusses the alternative investment classes and how derivative instruments such as swaps, futures, and forwards are used to manage some alternative investments.

Portfolio Management and Wealth Planning

This comprises the largest portion of the exam and will account for 35-40% of the 264 possible points. The syllabus is very comprehensive and introduces new concepts such as behavioral finance, which forms the basis for financial decision making. Risk management concepts, covering tools and techniques for measuring and managing risk are also discussed. Apart from these, you are likely to be tested on questions related to individual and institutional wealth.

The number of concepts that can be tested are limited but are important. One such important concept is the Investment Policy Statement and its components, which is highly testable. Economics, which was a part of the investment tools in Level I and II, is included under portfolio management in the exam. Other important concepts are managing portfolios of institutional investors, asset allocation, risk management applications, and evaluating portfolio performance.

Within the portfolio management section, the CFA Institute provides no hints about which topics are more important. However, it does make available sample essay questions , which can be very useful for practicing and developing your exam strategy.

Exam Details

Time Limit:  4 hours and 24 minutes Cost : $990 to $1,290 Number of Questions : 44 multi-part essay/structured response Passing Score:  Varies Annually Passing Rates: 49% (as of February 2024) Format : Item Sets and Essay Questions Prerequisites : Passing grade on CFA Levels I & II exam, and a U.S. Bachelor's degree or equivalent. Corequisites : In order to receive your designation as a CFA charter holder upon successful completion of level 3, you are required to have at least 36 months of experience in a related field. Exam Date(s) : February and August Exam Results : Usually provided within five to eight weeks. Official Exam Websit e:  CFAInstitute.org

How Hard Is the CFA Level III Exam?

The exam to become a Chartered Financial Analyst (CFA) is considered relatively difficult. In 2023-2024, the pass rate for the Level I exam ranged from 35-46%, and the Level II exam had a pass rate of 44-59%. For the Level III exam, the pass rate was 47-49%.

What Do You Need to Become a CFA?

To become a chartered financial analyst (CFA) you will need to take and pass the three-part CFA exam. You also need to fulfill the education/professional background requirements, which can be satisfied by having either a Bachelor's degree or 4,000 hours of relevant work experience over the three years before you sit for the exam. You will also need to provide 2-3 professional references and pay membership fees to the CFA Institute.

How Much Does a CFA Make?

According to the CFA Institute, the average chartered financial analyst (CFA) earns an annual salary of $180,000. It is not clear if that figure includes bonuses or any other compensation.

The Level III exam is considered one of the tougher exams for the CFA, as many of the questions are posed in essay format.

The key to success is to practice as many essay type questions as possible and master topics specifically related to portfolio management, which is at the heart of this exam.

CFA Institute. " Make the Right Choice with CFA Program ."

CFA Institute. " Exam Information, Dates and Fees ."

CFA Institute. " Level III CFA Exam Structure ." 

CFA Institute. " Level III CFA Exam Structure ."

CFA Institute. " Level III Specialized Pathways ."

CFA Institute. " Curriculum & Exam Topics ."

CFA Institute. ' CFA Exam Results and Pass Rates ."

CFA Institute. " Curriculum and Exam Topics ." Expand "Fixed Income."

CFA Institute. " Curriculum and Exam Topics ." Expand "Portfolio Management and Wealth Planning."

CFA Institute. " Sample Level III Item-Set Questions ."

CFA Institute. " CFA Exam Results and Pass Rates ."

CFA Institute. " How to Become a CFA Charterholder ."

CFA Institute. " CFA Charter vs. MBA vs. CPA vs. CFP ."

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CFA Level III Study Packages

Level iii specialized pathways.

New for the 2025 Level III exams, CFA Institute is introducing specialized pathways. This will impact every candidate looking to sit for the Level III exam in 2025 and beyond. Each pathway was developed to give you more options to learn content directly related to your interests and career goals. The three specialized pathways are the traditional Portfolio Management, Private Markets, and Private Wealth. 

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What Kaplan Schweser Customers Say

Cfa ® level iii exam faqs, can i switch my specialized pathway if i change my mind, how hard is level iii of the cfa ® exam.

The CFA exam as a whole is difficult by design. It’s an exclusive designation that truly demonstrates mastery. The Level III pass rate is 56%, and the average candidate spends 344 hours preparing.

How long should I study for Level III of the CFA ® exam?

CFA Institute recommends 300 hours of study, and our experience is that 300 hours is the minimum that most people need to be successful. The average Level III candidate spends 344 hours preparing.

Tips to Prepare an Effective Study Plan »

How much of the curriculum is Common Core between each of the three pathways?

Is the private markets pathway similar to the caia ® charter, is the private wealth pathway similar to the cfp ® certification, what are the cfa level iii specialized pathways.

Beginning with the 2025 Level III exams, CFA Institute introduced specialized pathways. Each pathway was developed to give candidates more options to learn content directly related to their interests and career goals. The three specialized pathways are: 

• Portfolio Management: This traditional CFA Program pathway focuses on constructing, managing, optimizing, and measuring portfolios of public market equity, fixed income, and derivative securities.
• Private Markets: This pathway addresses private markets investing primarily from the perspective of the general partner (GP). It builds on key valuation and other competencies in the CFA Program from all four asset class domains.
• Private Wealth: This pathway offers a global perspective on and universal principles for serving high-net-worth clients (worth US$5M+). It is structured as an arc from a young adult being onboarded to generating wealth through wealth transfer.

What are the exam fees for Level III of the CFA ® exam?

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What are the weights of the topics on the CFA ® Level III exam?

Cfa level iii exam topic weights.

Here are the topic weights for the CFA Level III exam:

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

These topic weights were used to develop a Level III study plan you can follow to ensure complete coverage of the material. The study plan is included in all of our packages .

What is the difference between Schweser’s pathways exam prep products?

What is the passing score for level iii of the cfa ® exam.

The Minimum Passing Score (MPS) is the benchmark used to determine whether a candidate has passed or failed the exam and it is different each year. The MPS for Level III is set about six weeks after the exam, and CFA Institute does not release the MPS, although research indicates that it hovers between 60 and 70 percent.

Exam Grading Details »

When is Level III of the CFA ® exam?

CFA Institute administers the Level III CFA exam twice per year, with exam windows in February and August.

Learn More About Exam Dates and Changes »

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