Getting your Charter: How Level III Differs Quantitatively from Level II

CFA® candidates of all levels ask the same question: what is the difference between Levels I, II and III , and why does Level III prep require a different approach? Here’s my answer, in a (500 word) nutshell.

Consider a river as the analogy to explain levels I and II.

For Level I, you are learning basic definitions and formulas. For most candidates, it may be 20-30% new material on top of the material they have already learned as an undergrad finance student. The material – and therefore the test – can be viewed as a very wide river, but very shallow.

For Level II, the material now takes that wide river and makes it very deep. The formulas and the definitions get much more complex and deeper. The important facet about I and II is that the topics on the exams are silo’d. Stand-alone topics. Equities are equities. Bonds are bonds. They don’t cross topics. They are silo’d which makes the material relatively easy to memorize and study. Click HERE for more…