CFA Level 3 Practice Questions by AnalystPrep

While Levels 1 and 2 emphasize memorization and calculation, Level 3 takes a broader and more applied approach. You’ll need to weave descriptive knowledge with analysis, understanding the “why” behind investment strategies. This shift means candidates must go beyond rote learning to demonstrate critical thinking and analysis.

The CFA Level 3 exam is split into two distinct sections: item sets and constructed response (essay-style) questions. Knowing the format inside out can significantly boost your performance.

Note, starting in 2025, the CFA Level 3 exam consists of two parts: Core topics, which cover Asset Allocation, Portfolio Construction, Performance Measurement, Derivatives & Risk Management, and Ethics, and a Specialized Pathway of your choice. Candidates can select one of three pathways: Portfolio Management, Private Markets, or Private Wealth. Our CFA Level 3 practice questions ensure you are well-prepared for both the Core topics and your chosen pathway.

• What are item sets? Think of them as mini-case studies. Each item set presents a vignette, a short narrative on a financial scenario, followed by six multiple-choice questions.
• This format tests your ability to pull insights and make informed decisions based on the scenario. 

  Here’s a sample breakdown of topics often covered:

• Ethics and Professional Standards – Ethics aren’t going anywhere!
• Portfolio Management – The cornerstone of Level 3.
• Wealth Planning – Tailored for high-net-worth individuals.

• Essay section? Yes, but don’t worry, you’re not writing a novel! This part requires brief, clear, and to-the-point answers.
• Here are a few pointers to excel:
  • Be direct: Each point you make should add value. Long-winded answers won’t earn extra marks.
  • Use bullet points and clear language: The CFA examiners prefer answers that show logical thought, so structuring your response can really help.

Your study approach for CFA Level 3 should be as strategic as the portfolios you’ll one day manage. Here’s a straightforward guide to squeezing every drop of value from AnalystPrep’s practice questions:

• Familiarize Yourself with Real-World Scenarios: AnalystPrep’s item sets are crafted to mimic real-life financial dilemmas. For instance, you might analyze a retiree’s investment needs, balancing risks and returns.
• Focus on Weak Areas: Use practice questions to identify gaps. If alternative investments aren’t your strong suit, dedicate more time there.
• Practice Time Management: With only a few minutes per question, timing is crucial. Regularly practicing item sets will help you stay sharp and efficient.
• Review Every Explanation: Even if you answer correctly, read the explanation. This builds a deeper understanding and cements your learning.

Mastering item sets requires more than knowledge—it’s about approach. Here are some strategies to keep you ahead of the curve:

• Scan First, Answer Later: Start by skimming the vignette to get a sense of the case. Then dive into the questions, revisiting relevant details in the vignette as you go.
• Look for Keywords: Words like “maximize return” or “minimize risk” tell you what the question is really asking.
• Make Educated Guesses: When you’re stuck, eliminate obviously incorrect choices to improve your odds.
• Don’t Overthink It: The exam isn’t trying to trick you. Stick to the information in the vignette and avoid unnecessary assumptions.

• Allocate roughly 10-12 minutes per item set. Pace yourself to ensure you have enough time to tackle every question with a calm mind.
• Use a watch or timer during your practice sessions to simulate exam day conditions.

With so many resources available, why pick AnalystPrep?

Here’s why we stand out:

• In-Depth Explanations: Each practice question is paired with detailed answers to reinforce learning. You’ll not only know the correct answer but understand why it’s correct.
• Performance Tracking: Identify your strengths and weaknesses with our personalized analytics, focusing your study time where it counts.
• User-Friendly Platform: Access questions, quizzes, and study resources on any device, anytime. Whether you’re at home or commuting, you can keep learning.
• Proven Success: Thousands of candidates have used AnalystPrep to pass the CFA exams. Join them and get a head start on your CFA journey!

Ready to test your skills?

All item sets from AnalystPrep’s CFA Level 3 Question Bank are well organized by chapter and cover most of the important concepts that have been tested in past CFA Level III exams. 

Register a free account to test out 10 item sets (60 free questions) and see why AnalystPrep has helped thousands of candidates pass CFA exams!