How Hard Is the CFA Level III Exam?

The CFA Level III exam has a relatively straightforward structure. You will have 4 hours and 24 minutes to complete the entire test. The exam is separated into two parts of 2 hours and 12 minutes each, with an optional break between. Comprehensive CFA Level III study guides are available to help you prepare.

The CFA Level III exam begins with 8-11 vignette-supported essay sets with questions that could have three different methods of entering a response: essay, numerical entry, or multiple choice. Essay questions require a written response while numerical entry questions only require the answer to be entered. Multiple-choice questions within the constructed-response section require selecting the correct answer and may include a written justification for the answer you gave.

Session two of the exam consists of 44 multiple-choice-style questions worth three points each divided into 4- to 6-question sets. Each set of question items will relate to a specific vignette. Remember, even if the questions seem arbitrary, they all demonstrate your skills as a CFA charterholder.

How hard is the CFA Level III exam? Due to the difficulty of the essay format of the CFA Level III exam, it’s deemed the most challenging CFA exam to pass although it has a higher pass rate than the Level II exam. Although the essay-style questions may relate to core topics of all three exams, the justification for a response requires extra effort.

That said, the essay questions have different point values. If you perform poorly on one essay question, you may still pass if it has a low point value. And 4 hours and 24 minutes may seem like plenty of time, but many test-takers find completing the exam quite a feat.

Despite rumors on the internet, there is no CFA Level IV test. Level I, Level II, and Level III are the only levels of CFA exams. CFA Level III is the final exam.

According to CFA Institute, about 40% of the people who took the CFA Level III exam in 2021 passed. This pass rate is much lower than the 10-year average of 52%. The rate is the lowest it has been in 58 years, but receiving a passing score is still possible.

The average person taking the CFA Level III exam spends 328 hours studying and preparing. Completing all three tests takes about four years. The CFA program has very high professional standards, so they only want the best of the best.

Equivalent to the CFA Level III exam, the CFA Level I exam typically requires upwards of 300 hours of preparation and studying. However, the CFA Level I exam has much less content than the other two levels and is overall easier, although it has a pass rate of only 41%. This is presumably due to many less qualified candidates attempting the exam.

The CFA Level II exam is slightly less demanding than the CFA Level III exam. This exam contains many questions involving financial analysis. The 10-year pass rate for the CFA Level II exam is 45%, which is higher than Level I (41%) and lower than Level III (52%). Some people who have taken all three tests claim that Level II is the most difficult of the three due to mathematical problem solving.

Ensure you spend plenty of time brushing up on your math skills since performing poorly on the math problems could be detrimental to your test results. Many people taking the CFA Level II exam have not taken a math course in years and have to study their derivatives and quantitative reasoning extensively before exam day.

Learn more about the latest CFA Program fees in our helpful resource.

Preparing for the CFA exam is arguably the essential part—but many CFA candidates procrastinate or delay studying until weeks (or even days) before the exam and end up feeling rushed and do not perform at their peak. You can reach your highest potential if you follow wise practices and allow yourself several months to prepare.

Third-party preparation programs outside the official CFA curriculum can make studying and preparing more time efficient. Try finding a CFA study plan that suits your learning type—if you are a visual learner, you may find reading the lessons more suitable. Auditory learners may find instruction videos better suit their needs.

Another option is hiring a tutor, although that can become expensive across multiple study sessions. On the other hand, having a tutor may help your chances of passing the first time you take the exam—so you will not have to shell out more money for registrations in the future.

Mock exams are also available. Set aside time each week to complete a practice exam. Time yourself to determine if you can complete the exam in the allotted time. Taking a mock exam is the best way to get comfortable with the actual exam.

As much preparation as the CFA Level III exam takes, remember that rest is crucial as well. Never pull all-nighters or lose focus on your daily life to pass an exam. The sooner you begin preparing, the better, as it gives you more time to balance studying with your life outside of the CFA test!

Five days before your exam date, you should stop studying relentlessly and focus on the key points or subjects you are having trouble with for a few hours a day. Look over your study materials to ensure you have gone over everything. As exam day approaches, time management becomes even more instrumental.

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The night before the exam, get plenty of sleep and don’t keep yourself up all night worrying about the outcome.

Many things can determine how much a CFA Level III candidate makes in the United States. The two most important of those are experience and location. Different areas in the United States have different pay scales or fixed incomes. Using NYC as an example:

• Someone with little work experience that works for a large firm starts between $75,000 and $100,000.
• Someone with some experience or in a management position can make between $100,000 and $200,000.
• Specialized CFA Level III’s can make between $300,000 and $500,000. Some companies will pay more for someone they think can benefit their business.
• On average, a CFA Level III in New York makes around $175,000.

Conventional jobs for a CFA charterholder include portfolio managers, data analysts, traders, consultants, and alternative investors. Other popular careers are wealth management and equity investments.

Overall, getting a job with a high-paying salary is relatively simple for a CFA Level III candidate, even without extensive work experience. Just making it to the third exam is proof that you have high professional competence. If you have already passed the first two exams, Level III is the final step in getting your dream job.

Do not let factors such as cost or readiness keep you from taking the exam. The combined price of all three tests may seem daunting, but it is worth the cost in the long run.