How to pass Level 3

When i passed L2, I came on the L3 forum and there were some pretty nasty posts from L3 people awaiting results and telling people not to pester them. I don’t want to be that person, so here are my thoughts on L3 keeping in mind I don’t have my results but passed the vast majority of my 8 practice tests.

Differences between L2 and L3 The L2 material is on balance probably a little harder than L3 but the L3 test is on balance harder than L2 largely because of the AM session. There’s no opportunity to guess in the morning session and time management is much harder (see below).

The test itself is the invisible study session Unlike the other levels, the morning session requires you to actually write short answers (and they prefer responses in pen although pencil is allowed). This means you have to actively recall information and be able to explain topics rather than passively choose the best answer. For me, this meant you have to know the information a lot better than you did at the other levels because you are actively recalling it. It’s kind of the difference between being a student and being a teacher. The student needs to understand the information enough to pass; the teacher needs to understand it enough to explain it thoroughly.

Start Earlier Because the test requires active knowledge and the format is completely different in the AM session, you need a lot more time to practice the test format itself and learn how to answer succintly. This means considering the question thoroughly and then considering your response before you commit the answer because if you decide you are wrong, you have filled up the space to answer and need to start again. So i would aim to finish the reading about two months early and do as MANY PRACTICE TESTS AS YOU CAN.

Time Management From my experience and the experience of Schweser professors, the most difficult thing about L3 AM is time management. In L1 and L2 you could manage your time by looking at where you were in the question block versus the time because all questions were an equal number of minutes. In L3, you will have 9-15 questions, each with multiple sub parts. Each sub part has minutes allotted to it which can VARY WILDLY. Part A may be 18 minutes while part B may be 4mins. Keeping track of time is crucial and I found it to be very challenging in the heat of the real exam especially.

Answering ‘essay questions’ The ‘essay’ questions are really short answer and you can use bullet points etc. to get across your knowledge. There is a tendency to want to write tons to display your knowledge but the real key is actually understanding what they are asking and write as little as possible to answer the question. In L1/L2, if you didn’t quite get what the question was asking, you could deduce it from the responses provided. Here there are no responses to guide you and you will be frequently frustrated by the model answers given in practice tests e.g. “That’s not at all what the question asked!” “How can you just put that sentence and get it right!?” I’ve written an expanded post on tackling essay questions here.

Partial Credit The only good thing about essay questions in the AM is that you can receive partial credit so SHOW YOUR WORK on calculations. This can be frustrating as well since we have been trained to just get to the answer as quickly as possible and I needed to train myself to write out all the steps. You also have a chance to really explain yourself but remember to keep it brief.

Cross Pollination of Topics More so than any other level, this one combines topics and asks questions that were never asked in the curriculum. In L1 and L2, you are tested pretty much how the material is explained. In L3, you can get pretty much anything and it will likely combine lots of different study sessions together in one question. Basically, when you are studying, think about how the topic you are reading connects with other areas you have already read.

Practice Tests The Schweser practice tests are good but you are grading yourself in the AM session. For those of you, like myself, who loved getting metrics from L2 and L1 on how you are doing in each topic to target your revision, this throws a spanner in the works. You are asked to grade your written answers against a model answer. This causes many challenges: (1) it’s not always clear how to grade yourself and (2) you are asked to be hard on yourself in the grading which is difficult psychologically when all you want to do is hit 70% and (3) the graders have discretion your answer can still be correct even though it is different from the model answer but you have no way of knowing when this will be the case. It is very frustrating to finish an AM session and then find out that you misunderstood a 15 pt question and got zero on it.

Grading The CFA graders grade individual questions. i.e. the person grading question 1 will not be the same as the one grading question 2. So don’t be afraid to be redundant if you feel it is correct to do so since the info you put in question 1 will not have been seen by the grader grading question 2.

GIPS GIPS are a significant part of the curriculum. Unfortunately, there are chock full of arcane rules that vary by investment line and year and you have to know them pretty darn well. It’s still not clear to me how you study them since they are not conceptual really so you are really force feeding your brain lots of little rules. Make sure you go through this material a lot. Flash cards are probably a good way to go but you are talking about a very large stack of cards.

IPS Most years you will find a bunch of IPS questions. I found these extremely difficult to study for since they can be absolutely anything. The variety of questions is as varied as there are individual circumstances in life. I found it useful to write “base case” IPS’s for most of the institutional investors and the individual investors so that I could have a ready response already honed if the typical case came up and adapt it to a different case. Answering IPS questions takes a lot of practice in my view to get them whittled down to a good, succinct response.

Topic weights Level 2 was made harder than L1 by the fact that thetopic weights were ranges rather than absolute percentages. In L1, you can more or less game the system by focussing on FRA, Ethics, Quant and one other topic. L2 at least gives you comfort that if you know Equities, FRA, Ethics, and a couple of other topics well, you can make it through. L3 is made harder still since,not only are there ranges, but “Portfolio Management” accounts for 45-55%. This vague subject heading makes it very difficult to know how to target your studying. For instance, you have a reading on Economics but Economics is not listed as one of the topic areas on the CFA website. This is because Economics, like several other topics, are all pooled under the PM heading so it is very difficult know whether you should place a lot or a little emphasis on this and other topics. All this speaks to knowing the material better than L2.

Calculate, Evaluate, the stuff for which you want your calculator In L1 and L2 you could count on the action verb in the LOS to tell you whether you needed to learn the calculation or just learn the concept. As you will see from the past exams in L3 on the CFA website, there are several instances where you are asked to perform a calculation even though the action verb is something like “explain X”. Be prepared. All this speaks to starting your studies earlier.

My results I think that the above really summarises a good, productive approach to L3, however, I think I failed so bear that in mind. I hit a time warp in the AM session and spent a long time on two 4 minute questions (worth just over 1% each). I thought I was doing ok since there were roughly 10 questions and halfway through the exam I was on question 5. The problem was that the bulk of the minutes were in the latter half so I was wayyyyy behind and panicked and rushed through making mistakes no doubt and also not finishing by a long shot. I probably finished only 70% of the morning session. When that happened in L2, I could just guess A, B, or C but here you are left with no way of getting ANY points on the ones you didn’t complete. Bottom line is that I definitely knew the material much better than L1 or L2 (both of which I passed first time) but the format of the exam and poor time management probably sunk me. That’s why I think it is the key difference between L3 and L2.

Bombing the morning session

As I noted above, I thought I bombed the morning and, indeed, I did. I’m proof you *can* still pass while sinking the morning. One thing I did that saved me is shake it off. At lunch after the morning session, I was devastated that i didn’t even finish the morning. I decided that the only thing to do now would be to shake it off and refocus because half the test was still sitting there waiting for me and I could at least kick ass in the afternoon which very fortunately I managed to do.


Update - my actual results

i Passed!!! Looks like I squeaked by but who cares!? I had to wait an excruciating 10 hours to get the email and use up a miracle or two but it is done. Good luck all!

You wrote too much. Nobody will follow your hints because the process of learning and preparation to this level exam is unique for each candidate depending on one’s mental abilities, age, education, marital status, experience, way of life and work load, etc. Also, many have troubles with English - this is very important topic you have missed since it affects the writing of the AM session a lot via mental translation of English content into the first language and backwards.


Thanks for the feedback, ua_bender. You are absolutely correct - there is no way anybody can ever give advice on how to approach these exams. It was silly of me to try and I sincerely apologise. I honestly don’t know what I was thinking (except that I wished somebody had done that for me when I was starting my L3 studies).

trimonious2, thanks for this post. It is really useful and will help me alot.

This is all great advice for people who have not taken the test. Thanks trimonious.

I think that saying " The test itself is the invisible study session" is an invaluable piece of advice for new Level III candidates. Without a doubt, learning the format and structure of the AM section of the test is critical to successfully taking the test.

Thank you trimonious2 for this very detailed account. Forget about the haters. I started a thread yesterday specifically asking for such advice and I am very glad you decided to share yours. This is what AF is for. I wish you all the best on Aug 7!

Trimoinous2, great post. I just passed Level 2 and am trying to gather as many opinoins as I can before I start studying for Level 3. Thanks for your comments.

This is the best post on passing the L3 exam i have read. All new L3 candidates who are running around here looking for the L3 “secret” - HERE IT IS in the OP.

i must have read 4 or 5 times in advice to start practice exams early (like at least 2 months) and I therefore set my study schedule to do this. Yet with 2 months to go, I decided I would do a few more weeks of reading revision and didn’t start the practice exams until 6 weeks before. I got nothing from reading the notes again and everything from the practice exams and only just managed to get all 10 exams I had access to done. Lesson, start as early as you can on practice exams at this level, even up to 3 months out, and don’t worry (like we all have the tendency to do) that you aren’t “ready” to take your first practice exam yet! I doesn’t matter if your first practice exam sucks, it’s only the last one that counts.

@ trimonious2 - don’t worry about the crap coming out of ua_bender.if he actually gave a sh!t he would translate this for his non- English speaking brethren as you have, in my opinion the essence of understanding and passing this exam. Great job

I think it is a pretty good post. I think that a new L3 candidate could print this and put it along with the materials, and those tips can be helpful further alog their studies.

I also think past exams (and also mocks) are very important, even more than EOCs at this level. In my opinion a good approach is to start with them as early as you can, learn the Los/session you got wrong, and keep doing that. There are a lot of available past exams + provider mocks to keep you busy - if you have the time/discipline, you can probably spend a few hundred hours doing just that.

Thank you for taking the time to write your this Trimonious. It is very helpful to read detailed advice like this early on and I have bookmarked it to look back on during my studies.

Thank you trimonious2. That was very well explained.

Ignore ua_b.

haha ua_bender getting lots of hate here!

Thanks Trim,

Im a level 3 failer and found this to be a great post.

Thanks US_Bender for providng me with a great belly laugh whether intentionally or unintentionally. I’m still trying to work through the mental translation of your post into English and backwards. Maybe it started backwards and then went to English? In any case. GLORY BE TO GOD!

I’m a level III candidate awaiting for results. I think trimonious2 did a wonderful job on formulating the strategy to tackle L3. I wish I had seen this great post a year ago. Thanks. Fingers crossed for you and myself!

LMAO…ua_bender “…since it affects the writing of the AM session a lot via mental translation of English content into the first language and backwards…”

I would like to extend a piece of advice that Trimonious touched on…the material appears to be much easier than level II, but don’t get overconfident. As he stated you’re expected to know it much more thoroughly. Also while each LOS may be easier…they don’t dovetail together as nicely as L2…so that the end of the readings you have many more unrelated areas to know. You’ll start realizing this when you start the practice tests…so if you start practice tests early enough (2 months should be more than sufficient) you’ll have time to adjust as necessary. If you start feeling like the material is easy just remember…the L3 pass rate is generally around 50%. And that’s 50% of a group that has proven to be motivated, intelligent, and have good study habits.

trimonious2 Thank you very much for sharing, the best for Aug 7!.

I too, think it was helpful trimonious2! Thanks for the tips, and good luck for August 7th!

As for the translation back into one’s first language, I think that getting a good grasp of the materials for level 1 and 2 implied to think in English rather than to try and translate 7 kilos worth of words (my experience as French is my 1st language) which is a tedious exercise…

Thanks trimonious2. Good luck for the test results. I will definately follow your advise.