A Simple Step by Step Guide to Prepare for Your CFA® Level III Exam

Congratulations on passing your CFA® level I and level II exams. While it was not easy to get here, only one level remains towards attaining your CFA charter.

As you prepare for the final level of the CFA exams, here are a few tips to prepare for and pass your exam on the first try.

Take note of the CFA level III curriculum and exam format

The CFA level III exam is computer-based, but unlike CFA level I and level II, the exam consists of vignettes and essay-type questions. Candidates sit for two exam sessions, one in the morning and another in the afternoon. Each exam session is two hours and fifteen minutes long. 

The morning exam session comprises nine to twelve questions and a constructed response section that requires essay-type answers. According to the CFA Institute, these questions require candidates to give highly specific answers. These questions comprise varying structures and case studies that present an investment challenge that candidates should solve. On the other hand, the afternoon session has six vignettes, each with ten questions.

You will apply your knowledge to real situations with clients and firms, and the CFA level III exam tests your ability to pass judgment. Therefore, you should aim to understand the concepts in-depth because memorization will not help you make decisions.

According to the CFA Institute, the exam topics and weights for CFA level III are;

• Portfolio Management: 35–40%
• Fixed Income: 15–20%
• Ethics: 10–15%
• Equity Investments: 10–15%
• Economics: 5–10%
• Alternative Investments: 5–10%
• Derivatives: 5–10%

It is essential to plan your study sessions based on these exam topics to ensure they are productive.

Use the CFA level III exam rate to prepare for your exam

According to the CFA Institute, the average pass rate in the last decade for CFA level III is 50%, and the number of candidates registering for the exam increases yearly. Due to this large number of exam answer sheets and the written part of the exam, the graders use a standardized process to score the exams.

A large part of the CFA level III exam is written, and candidates who fail tend to think they can pass if they write creative answers. However, if you want to pass your exam, you should keep in mind that it is a standardized exam that requires specific answers.

Start a study routine as early as possible

Successful CFA charter holders’ most common success tip is their dedication to a study routine. To pass your Level III exams, you need to understand the material and have the skills to apply it. The exam will test how to apply what you learned to different scenarios.

We recommend that you dedicate at least 300 hours to studying for your exam, and starting a study routine as early as possible will go a long way in helping you achieve this. You should set apart time to study and develop a study strategy to ensure that you get the most out of each session.

You should focus on the CFA Institutes’ learning outcome statements, which refer to what you should be able to do by the end of your CFA curriculum. The actual knowledge, skills, and abilities that the lecturer or instructor intends for you to learn or develop. Therefore, you should plan out your study sessions around the core topics and the specific learning outcomes for your study sessions to be more focused and successful.

To prepare for your examinations, you should simulate examination conditions. Simulating exam conditions will help you assess how ready you are for your tests and identify areas for improvement. In addition, review workshops provide new perspectives to topics that help candidates remember solutions to different exams.

Practice taking the exam with mock exams

The last but equally important step in preparing for your CFA Level III examinations is to practice taking the exam as much as possible. It would be best if you simulated realistic exam conditions while practicing. We recommend that you use one to two months before the exam to practice using mock exams.

The CFA level III exam consists of constructed response questions that need practice to develop the skill to apply your knowledge to answer these questions. It would be best if you used mock exams to identify and learn from your mistakes. You will also understand the terms used during testing, the calculations required, and how to apply the knowledge to solve problems.

You will be given a mock exam by the CFA Institute and buy additional resources from Analystprep.com. CFA societies in over 120 locations worldwide also offer a six-hour live mock exam, including a multimedia tutorial that helps you understand how to answer the questions.

If you need additional resources to help you prepare for your CFA Level III exam, enroll in Analystprep.com study packages. We provide instruction from our experts and supplemental study materials including, online study notes and video lessons, question banks, mock examinations, and customizable quizzes. You will have the most reliable partner on your journey to becoming a successful CFA charter holder.