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CFA Level II — applied valuation
Level II is where the CFA Program shifts from definitions to judgement. Every question lives inside a vignette — a mini case study that forces you to apply the curriculum exactly the way an analyst does on the job.
CFA® Program · Level II
Level II, at a glance.
Level II is where the CFA Program shifts from definitions to judgement. Every question lives inside a vignette — a mini case study that forces you to apply the curriculum exactly the way an analyst does on the job.
CFA Institute recommends roughly 350+ hours of focused preparation — the WSU platform breaks that into topic-weighted practice, mocks, and analytics so every hour lands.
See Level II pricing
Topic Weights
What Level II actually covers.
CFA Institute publishes the weight ranges every cycle. Prioritise study time toward the heaviest blocks first — the WSU question bank is filtered to match.
Quantitative Methods
5–10%Multiple regression, time-series analysis and machine-learning concepts you'll lean on throughout the exam.
Economics
5–10%Currency exchange-rate determination, economic growth and the impact of regulation.
Financial Statement Analysis
10–15%Inter-corporate investments, employee compensation, multinational operations and quality of earnings.
Corporate Issuers
5–10%Capital structure decisions, business and financial risk, corporate governance.
Equity Investments
10–15%DDM, FCFE/FCFF and residual-income models, market-based valuation, private-company valuation.
Fixed Income
10–15%Term-structure models, credit analysis, MBS/ABS valuation, fixed-income arbitrage.
Derivatives
5–10%Forward and futures pricing, swap valuation, option-pricing models including binomial and Black–Scholes–Merton.
Alternative Investments
5–10%Private equity, real estate, infrastructure and hedge-fund strategies — valuation and due-diligence.
Portfolio Management
10–15%Capital-market expectations, portfolio risk, ETFs and trading-cost analysis.
Ethics & Professional Standards
10–15%Code & Standards plus the GIPS framework — still a heavy weight and a frequent score-tipper.
What You’ll Walk Away With
Outcomes a Level II candidate should own.
By the time you sit Level II, every item below should feel automatic. The WSU question bank, flash cards, and AI assistant are tuned to push you to exactly that band of fluency.
- Read a Level II vignette under exam pressure and pull out only the data points each item-set question actually needs.
- Build and defend an equity valuation using DDM, FCFE/FCFF, residual-income and multiples-based models.
- Value structured fixed-income products and price options with binomial trees and Black–Scholes–Merton.
- Run a multiple-regression diagnosis — multicollinearity, heteroscedasticity, serial correlation — and interpret the output.
- Adjust financial statements for inter-corporate investments and pension plans before drawing any conclusions.
- Apply the GIPS standards and recognise how Level II ethics scenarios go beyond the Level I framework.
Exam Format
The shape of the sitting.
Recent Level II pass rates have hovered around 40–50%. The exam is shorter than Level I — but the vignettes carry significantly more weight per minute.
Questions
88 vignette-based
Duration
4h 24m total
Sessions
2 × 2h 12m
How WSU Helps
The module set, tuned for Level II.
Every WSU module — question bank, mocks, analytics, AI assistant — knows it’s preparing you for Level II. The weights, format, and difficulty band adapt accordingly.
Vignette-style practice
Item sets that mirror the real Level II format — pull only the data each question needs and build the discipline before exam day.
Per-LOS performance tracking
See which Learning Outcome Statements are secure, moderate or at risk — so the heavier topics get the heavier hours.
WSU AI tutor for vignettes
Stuck on a tricky vignette? The AI walks you through the relevant LOS, the calculation, and the trap the question is testing.
Full-length Level II mocks
22-vignette simulations with real timing pressure — the closest representation of the exam outside CFA Institute itself.
Ready to prep for Level II?
Pick your sitting on the next page — every Level II tier includes vignette-style practice, full mocks, and the AI tutor.