The CFA Level 3 Exam is Actually 2 Separate Exams

The CFA Level 3 Exam is Actually 2 Separate Exams

We could have also called this post 'Understanding the L3 Exam' because this post is all about breaking apart the L3 exam and talking about how it should be approached. By the end of this email you'll have a clear picture of two things

  • How the exam is structured
  • Key things to be aware of when preparing

The first thing to know is that Level 3 is really two entirely separate 3 hour exams, both worth the same 180 points.

The Afternoon Section - Old Territory

The afternoon section has the same familiar format as Level II.

You will have 10 vignettes or short passages and then six multiple choice questions asking you about the passage. Each question in the afternoon is therefore worth 3 points.

Generally candidates find this section to be easier. That's usually because it's more familiar, they feel like they have more time, and/or they're more comfortable answering quantitative/calculation type questions. It also doesn't hurt that it's multiple choice and you can always guess without penalty.

The Morning Section - The Key to Passing L3

The morning section is what makes L3 so different.

The morning section, or the so-called "essay" portion of the exam, is made up of somewhere between 8-12 questions. These questions aren't really essays though, they're actually constructed response questions. Each question in the morning is broken down into 2-5 smaller sub-parts that each require an answer. Generally, the sub-parts fall into two categories.

The first category is actual written out responses. This can include calculations, descriptions, answering an IPS question and so on and so forth.

The second category of constructed response will usually provide a template and then ask you to select from a list of potential answers. This could be something simple like "agree" or "disagree" or it could involve choosing between multiple categories and then justifying why you choose that response (if you've read our BF chapter, choosing between "emotional vs. cognitive error is a commonly tested one).

If you want to see what this looks like on an actual exam you can check out our blog post on the topic too.

The most common issue candidates face with the morning section is failing to manage their time. We will get into specific time management techniques later, but for now you should know that each sub-question in the morning is assigned a certain amount of time to answer. Each minute = 1 point. That means you will need to learn to balance being more or less thorough depending on the time assigned to each question. Practice writing in bullet points (yes that's allowed!).

Keys for Succeeding in both sections

For both sections each question is stand-alone. Getting one question wrong should not impact your ability to answer the next question. In the essay AM section, the questions are also stand-alone in the sense that a grader only grades a single question. They are not looking at your entire exam. So if you repeat information across problems, but that information is applied correctly, there will be no penalty for reusing the same key pieces of information. In fact, no one will even know!

The strategy therefore is simple: leverage what you know to get enough points to pass. We'll go into how you can do that in more depth in later posts. We also encourage you to subscribe to our emails where we share everything we know.

In our next post we take a look at the perspective of the test makers. After all, if you know what they're really looking for, you can better understand how to think about the exam material. It will make your studying that much more focused.