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.

Exam Prep

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

  2. 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:

  1. 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.

  2. 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.

  3. 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.

  4. 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.

  5. 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

1 Like

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!))