Navigating the CFA Exam Process With an Online Master’s in Finance: Exam Preparation, Requirements and Career Benefits

The Chartered Financial Analyst (CFA) credential is among the most prestigious certifications an investment management professional can earn. Business leaders understand how difficult it is to earn and respect the knowledge and dedication it takes. The CFA designation can offer numerous career benefits, giving you a competitive advantage by increasing your knowledge and boosting your professional reputation.¹

This post will cover the CFA exam, including its structure, its requirements and how you can prepare for it.

Understanding the CFA Exam

The CFA exam consists of three levels, each requiring a thorough understanding of various aspects of finance, investing and ethical standards. Level I focuses on basic knowledge and comprehension of investment tools. Level II goes deeper into asset valuation and the application of investment tools. Level III covers portfolio management and wealth planning, with a strong emphasis on synthesizing all of the concepts learned.²

Exam Structure, Format and Timing

Each level of the CFA exam has a distinct format:²

• Level I: Consists of multiple-choice questions, split into two sessions, each 3 hours long
• Level II: Features “item sets” of six questions. You will take 20 item sets total, 10 in the morning and 10 in the afternoon
• Level III: Combines essay questions with item sets, broken up over two sessions

Passing Criteria and Scoring System

The CFA Institute does not disclose the minimum passing score, which varies yearly. The passing criteria are determined through the Modified Angoff Method, involving a panel of experts who set the minimum competency level. Candidates receive a result of either “pass” or “fail,” along with their score relative to the minimum passing score line, the 90% percentile line and the 10% percentile line.³

Exam Topic Areas and Weightage

The CFA curriculum covers a comprehensive range of topics, each with its own weightage across the three levels of the exam.⁴

Level I topics and weights include:

• Ethical and Professional Standards: 15%-20%
• Quantitative Methods: 8%-12%
• Economics: 8%-12%
• Financial Reporting and Analysis: 13%-17%
• Corporate Finance: 8%-12%
• Equity Investments: 10%-12%
• Fixed Income: 10%-12%
• Derivatives: 5%-8%
• Alternative Investments: 5%-8%
• Portfolio Management: 5%-8%

Level II topics and weights include:

• Ethical and Professional Standards: 10%-15%
• Quantitative Methods: 5%-10%
• Economics: 5%-10%
• Financial Reporting and Analysis: 10%-15%
• Corporate Finance: 5%-10%
• Equity Investments: 10%-15%
• Fixed Income: 10%-15%
• Derivatives: 5%-10%
• Alternative Investments: 5%-10%
• Portfolio Management: 10%-15%

Level III topics and weights include:

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

Meeting the CFA Exam Requirements

Before you can take the CFA exam, or even pay the exam fee, you’ll need to meet the education and work experience requirements and adhere to the professional conduct standards set by the CFA Institute.

Educational Requirements

Candidates who want to take the CFA exam must have a combination of professional work experience totaling 4,000 hours and/or higher education over at least three sequential years.⁵

Work Experience Requirements and Guidelines

Candidates must have four years of professional work experience in an investment decision-making process. This experience can be accrued before, during, or after participation in the CFA Program. The work experience should be directly related to evaluating or applying financial, economic, or statistical data as part of the investment decision-making process, or in producing work that informs or adds value to this process. Candidates must describe their job duties and responsibilities in detail, which will then be reviewed and verified by the CFA Institute to ensure they meet the criteria.⁵

CFA Institute Membership and Professional Conduct

To become a CFA charter holder, candidates must apply for membership with the CFA Institute. Members and candidates must adhere to the CFA Institute’s Code of Ethics and Standards of Professional Conduct and are subject to disciplinary reviews and procedures if they violate these standards.⁶ Although it’s not mandatory to maintain the CFA charter, the CFA Institute encourages charter holders to pursue continuing education to stay up to date with the evolving field of investment management through numerous offerings such as courses and events.

Exam Preparation Strategies

Preparing for the CFA exam is a demanding task that necessitates a strategic and structured approach.

Develop a Study Plan and Schedule

Begin your preparation at least six months in advance, as the CFA Institute recommends around 300 hours of studying for each level. Craft a realistic study schedule that fits your daily life. Aim for a regular, consistent study routine rather than intermittent cramming. Studying consistently on a set schedule is more effective and helps you retain information better.⁷

Use Study Materials and Resources

Start with the materials provided by the CFA Institute, which are designed specifically for the exams, including the CFA Institute Learning Ecosystem.⁷ However, don’t shy away from supplementary resources like prep courses, study guides, and third-party materials, which can provide different perspectives and explanations.⁸ Also, engaging with online forums and study groups can bring you support and insights from fellow candidates.

Practice Questions and Mock Exams

Regular practice with questions helps test and reinforce your understanding. Full-length mock CFA exams, taken under exam-like conditions, help build your stamina and familiarize you with the exam’s format and time constraints. Analyzing your performance in these practice CFA exams, especially the mistakes, is key to understanding the areas that need more focus.⁹

Prepare for the CFA Exam With William & Mary’s Online Master of Science in Finance

William & Mary’s Online Master of Science in Finance (MSF) program will prepare you to step up and become a global leader in finance. You can earn your degree completely online in just 16 months. Our comprehensive, hands-on curriculum equips you with the knowledge and skills you need to do well on the CFA exam.

“My classes at William & Mary have helped me prepare for the CFA exam. From a theory and an application standpoint, I feel a lot more confident, better prepared and I also feel like I can critically assess any financial issues, any models, anything that they may throw at me during that exam,” said Shay P., MS in Finance ’24 Candidate.

Hear from alumni and current students as they share why they chose William & Mary online for their MSF and how the program has impacted their careers. Watch the video.

Contact one of our admissions outreach advisors today to learn more.