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Changes to CFA level II: Effective February 2023

Changes to CFA level II: Effective February 2023

CFA has been known to make changes to its curriculum every year. For the year 2023, there have been significant revisions in the CFA levels II curricula as a result of extensive practice analysis and curriculum development. 

The revisions include updates that involve small changes, for instance, in data, examples, and references brought up to date. There are also some revisions that bring about a medium degree of change, where clarity and accuracy have been improved by content adjustment and improvement. There are major revisions in some areas where content has been rewritten or significantly altered to reflect advances in the industry. Some areas of content have been introduced, and some material that is no longer relevant has been dropped. 

Other than the changes in content, there are also structural changes as well as changes in the pedagogical approach with the goal of improved outcomes.

What has changed in the Level II CFA curriculum?

CFA level II candidates for 2023 should expect the following structural changes in addition to the above-mentioned changes in content coverage.  These changes should inform how you prepare for the coming exams.

Like in level I, the new CFA level II curriculum structure is as follows.

$$\textbf{Topic}\ \ \longrightarrow\ \ \textbf{Learning Module}\ \ \longrightarrow\ \ \textbf{Learning Outcome Statements (LOS)}\ \  \longrightarrow\ \ \textbf{Lessons}$$

Where we had Readings in 2022, now we have easier-to-consume Learning Modules, and learning outcomes are not numbered as they were in the previous versions. There is also expanded use of spreadsheet modelling, and Real Estate readings have been subdivided into three readings with more streamlined content. These are the main highlights of changes in the 2023 cycle.

Level II content Revision

Quantitative Methods

In quantitative methods, there were major revisions in the Reading “Introduction to Linear Regression.” The content coverage has been divided into four Learning Modules, which include;

  • Basics of Multiple Regression and Underlying Assumptions
  • Evaluating Regression Model Fit and Interpreting Model Results
  • Model Misspecification
  • Expansion of Multiple Regression

The content has also been updated with Investment-focused datasets and the coverage expanded in the last module on the Evaluation of Influential Observations and Outliers.

The reading (Introduction to Linear Regression), now a learning module, has been dropped from level II and moved to level I.

Time-Series Analysis, Machine Learning, and Big Data Projects remain unchanged.


The three Readings on this topic have been revised into three Learning modules.

  • Currency Exchange Rates: Understanding Equilibrium Value has been updated.
  • Economic Growth has undergone some revision and 
  • The Economics of Regulation remains unchanged.

Financial statement Analysis

Financial Statement Analysis had six readings which have now become learning Modules, and another module has been added to make them seven. These are:

  • Intercorporate Investments
  • Employee Compensation
  • Multinational Operations
  • Analysis of Financial Institutions
  • Evaluating the Quality of Financial Reports
  • Integration of Financial Statement Analysis Technique
  • Financial Statement Modeling

In all these Learning Modules, the content coverage remains the same except in Financial Statement Modeling (Previously Industrial and Company Analysis). This module has undergone some revision. Spreadsheets have been introduced in LES for financial modelling, and some content has been added on behavioral biases in forecasting.

This Reading(learning Module) has been moved here from the topic “Equity Valuation”

Corporate Issuers

This topic had five readings in 2022.  Two of the Readings(Capital structure and Capital Budgeting) have been dropped, and a new Learning Module ( Cost of capital) has been added. 

  • Cost of Capital: Advanced topics has been added to this topic. This module focuses on extensions and complexities in estimating rates of return required for equities and fixed income and issues in constructing the Weighted Average Cost of Capital. 
  • Corporate restructuring (Previously Mergers and Acquisitions) has undergone major revisions. This module has been completely rewritten. Most of the content is new, with a broader focus on a variety of corporate restructuring events, their analysis, and incorporation into financial modelling for forecasting and valuation. Supporting spreadsheets have also been introduced into the LES.

Equity Valuation

This topic had eight readings previously. One reading, “Return Concepts ”, has been completely dropped, while “Industry and Company Analysis” has been revised to “Financial Statement Modeling and moved to the Financial Statement Topic.

The remaining six readings have been revised to learning Modules without any alteration in content. They are:

  • Equity Valuation: Applications and Processes
  • Discounted Dividend Valuation
  • Free Cash Flow Valuation
  • Residual Income Valuation
  • Private Company Valuation

Fixed Income

All the readings on this topic have been revised to Learning Modules without any changes in content coverage. They are:

  • The term Structure and Interest Rate Dynamics
  • The Arbitrage-Free Valuation Framework
  • Valuation and Analysis of Bonds with Embedded Options
  • Credit Analysis Models
  • Credit Default Swaps


The two readings on this topic are now Learning Modules, but the content coverage remains the same:

  • Pricing and Valuation of Forward Commitments
  • Valuation of Contingent Claims

Alternative Investments

This topic had three readings in 2022, two of which have not undergone any alteration in content coverage but one has been revised considerably. They include:

  • Private Equity Investments
  • Introduction to Commodities and Commodity Derivatives
  • Real Estate Investments – Here, Public and Private Real Estate readings have been combined, and the content has been streamlined and divided into three learning modules.

Portfolio Management

All the readings on this topic have been revised into learning modules with no alteration to the content. The modules are as follows:

  • Exchange Traded Funds: Mechanics and Applications
  • Using Multifactor Models
  • Measuring and Managing Market risks
  • Analysis of Active Portfolio Management
  • Trading costs and Electronic Markets

Ethical and Professional Standards

In this topic, the first two readings have been revised to learning modules without any changes in content coverage. They are:

  • Code of Ethics and Standards of Professional Conduct
  • Guidance for Standards I- VII
  • Guidance for Standards I- VII

The last module, Application of the Code and Standards: Level II, has seen new cases added to ensure complete coverage of the Code and Standards.

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