Top 10 Mistakes Students Make in CFA Level 2 (And How to Avoid Them) Study Plan, Tips & Must-Know Tricks

The CFA Level 2 exam is a big hurdle on the path to earning the well-known Chartered Financial Analyst (CFA) designation. Of the 3 CFA Levels, Level 2 is often regarded as the toughest level due to its intense focus on application and item set format.

With a recent average pass rate of around 45–50%, CFA Level 2 needs solid preparation, smart planning, and steady effort. Still, many candidates lower their chances by making simple but harmful mistakes.

This helpful guide is made to support CFA Level 2 students by pointing out the top 10 common mistakes that can ruin your prep. These mistakes—from not taking the exam seriously enough to ignoring your own well-being—can have a big impact on how you perform. We’ll also share clear tips to avoid these issues, with real examples and easy steps to follow.

Whether you’re taking Level 2 for the first time, trying again, or moving up from Level 1, this guide will give you the right advice, tools, and confidence to pass CFA Level 2 and move one step closer to becoming a CFA charterholder.

Also Read- CFA Level 2 – Exam Pattern, Pass Rates, Books etc.

Top 10 Mistakes and How to Avoid Them

1. Underestimating the Difficulty of CFA Level 2

• Many candidates assume Level 2 is just a harder version of Level 1, not realising how much more complex it is.
• While Level 1 tests basic concepts and simple calculations, Level 2 focuses on deeper analysis and real-world applications.
• Questions often combine multiple topics—like financial statement analysis, valuation, derivatives, and portfolio management—making them more challenging.
• This mindset leads to weak preparation and surprises on exam day.

Solution: Respect the Exam’s Complexity and Plan Ahead

• Understand that Level 2 is uniquely difficult and plan for 300–350 study hours over 6–8 months.
• Begin by studying the curriculum layout and topic weights. For example:
  • Financial Reporting and Analysis – 10–15%
  • Equity Investments – 10–15%
    Fixed Income – 10–15%
• Know that the exam goes beyond memorisation.
  • Example: You might need to adjust a balance sheet for hidden liabilities or recalculate EPS after a stock split—much harder than Level 1’s ratio questions.
• Create a smart study plan:
  • Tackle heavier-weighted topics first.
  • Spend extra time on tough subjects like derivatives or alternative investments.
• Start solving questions early:
  • Use question banks to get used to the exam style.
  • Focus on building analytical thinking, not just learning formulas.

2. Starting Preparation Too Late

• A common mistake is waiting until only 2–3 months before the exam to begin studying.
• CFA Level 2 has a huge syllabus—10 topics, over 3,000 pages, and 88 questions spread across 11 item sets in each session (2 sessions), 22 item sets in total, each with 4 questions.
• Late starters struggle to grasp complex topics, practice enough, or review weak areas.
• This leads to rushed preparation, increased stress, and lower chances of passing.

Solution: Start 6–8 Months Before the Exam

• Begin early—November for a June exam or May for a November exam—to give yourself enough time.
• Plan to study 10–15 hours per week, balancing reading, practice, and review.

Suggested Timeline:

• Months 1–3: Focus on learning and understanding all key concepts across the curriculum.
• Months 4–5: Dive into intensive practice using vignette-based questions (item sets).
• Final Month: Take full-length mock exams, review weak areas, and polish exam strategy.

Tips for Staying on Track:

• Break the content into smaller chunks, e.g., finish one topic like Quantitative Methods every 2–3 weeks.
• Use a study planner (Excel, Notion, or an app) to track progress.
• Regularly revisit harder topics like fixed income and derivatives.

Starting early helps you understand topics deeply, practice enough, and avoid last-minute panic.

3. Ignoring the Case Study Format

• CFA Level 2 uses a case study format instead of single multiple-choice questions like in Level 1.
• Each case (vignette) includes a short scenario followed by 4 related multiple-choice questions.
• If you don’t practice this format, you may struggle to spot key details, interpret data, and manage time—big issues during the 4 hours and 30 minutes.

Solution: Practice Case Studies Regularly

• Get used to the format by using official CFA Institute question banks, mock exams, and other trusted resources.
• Focus on spotting important data in case studies—such as ratios, market conditions, or portfolio details—and how they connect to the questions.

Example:
In a case about a company merger, you might be asked to:

• Calculate goodwill
• Understand how the merger affects financial statements
• Recalculate leverage ratios

Practice Plan:

• Aim to complete 20–30 case studies per topic
• Time yourself: ~12 minutes per vignette or ~3 minutes per question

Pro Tip:
Develop a method:

1. Skim the case
2. Read all the questions first
3. Go back to find only the details you need

This approach improves speed and accuracy, both of which are critical to doing well on exam day.

4. Skipping Topics You Don’t Like

• Many candidates spend too much time on topics they like, such as Equity Investments, and avoid harder ones like Derivatives, Alternative Investments, or Quantitative Methods.
• This is risky because all 10 topics are tested across 22 case studies (vignettes) in the exam, and weak areas can seriously lower your score.
• While the passing score is not officially disclosed, many candidates aim for at least 70% to stay on the safe side. Skipping any topic can cost you the exam, skipping any topic can cost you the exam.

Solution: Cover All Topics with a Balanced Study Plan

• Make sure to study all 10 topics, as each contributes to the 88 total questions.
• Use the CFA Institute’s topic weights to guide your time:
  • Financial Reporting and Analysis: 10–15%
  • Alternative Investments: 5–10%
  • Even lower-weight topics can still make a big difference, enough to make or break your result.

Example:
If you master Private Equity in Alternative Investments, you could score 5–10 extra points—which might be enough to help you pass.

Tips to Balance Your Study:

• Focus more time on high-weight topics like Financial Reporting and Equity Investments.
• Still give 10–15 hours to smaller sections like Ethics or Alternative Investments.
• Don’t leave tough subjects for the last minute—start them early to build confidence.
• Use practice questions from trusted sources (CFA Institute or IMS Proschool) to get familiar with how each topic is tested in the case study format.

5. Memorising Formulas Without Understanding

• Many candidates try to memorise formulas—like Black-Scholes for options or WACC (Weighted Average Cost of Capital)—without really understanding them.
• But Level 2 tests how you apply formulas in real situations, not just recall.
• Case studies may ask you to adjust WACC for a new project or price a swap, and memorisation alone won’t help with these complex questions.

Solution: Focus on Conceptual Understanding and Application

• Learn why a formula works, not just what it looks like.

Example 1:

• Don’t just memorise Black-Scholes.
• Understand how Volatility, Time to expiration, and Interest rates impact option value.
• Then practice applying the formula—like pricing a call option when a stock’s volatility changes.

Example 2:
For WACC, know how:

• Debt and equity costs combine
• Changes affect NPV in project analysis
• Practice using it in a case study to evaluate investment decisions.

Additional Practice:

• Use case-based questions to test formula use—like calculating:
  • Bond duration in fixed income
  • Currency adjustments in financial statements

Study Tools:

• Use flowcharts or mind maps to link formulas to concepts.
• Revisit the CFA curriculum if you’re confused—understanding leads to better retention and flexible thinking.

This approach helps you tackle unfamiliar or complex questions with confidence.

6. Not Practising Enough Mock Exams

• Some candidates spend most of their time on reading and notes, but skip mock exams.
• This means they miss out on testing their readiness, managing exam timing, and getting used to real exam conditions.
• CFA Level 2 mocks match the 4.5-hour format (two 2.25-hour sessions), case study structure, and question difficulty—making them essential for success.

Solution: Practice with Full-Length Mocks

• In the last 6–8 weeks, take 6–8 full-length mock exams.
• Space them out—one every 1–2 weeks—and complete them under timed conditions:
  • 7–8 minutes per case study
  • Stick to the real exam format and no breaks during each session.

Post-Mock Review:

• After each mock, carefully check your wrong answers to spot weak areas.
  • Example: You may have miscalculated deferred tax liabilities in Financial Reporting.
  • Or misunderstood the efficient frontier in Portfolio Management.

Fix Mistakes & Improve Speed:

• Use mock results to:
  • Review problem topics
  • Practice-related case studies
  • Improve speed on slow areas (e.g., Derivatives)

Track Your Progress:

• Monitor your mock scores.
• Aim for 70% or above, as that’s close to the real passing score.

Mock exams not only prepare you mentally but also show you what still needs work, making them one of the most powerful tools in your CFA prep.

7. Poor Time Management During the Exam

• Candidates often get stuck on difficult questions, like a tricky derivatives calculation or a financial reporting adjustment.
• This affects time management, causing them to rush through or skip later questions.
• With 88 questions across 22 item sets in 4 hours and 30 minutes, you get only 12 minutes per item set or 3 minutes per question per case study.
• Wasting time on tough questions means missing out on easier marks.

Solution: Practice Smart Pacing and Have a Clear Strategy

• Use mock exams to practice keeping 12 minutes per item set or 3 minutes per question..
• Follow a strategy:
  1. Skim the case study
  2. Read the questions first.
     Then go back to find the answers.

If You Hit a Hard Question:

• Don’t get stuck. Mark it, move on, and return to it later if time allows.

Example:
A swap valuation in derivatives might take too long.

• Aim to solve it in 1.5 minutes, or skip and come back later.

Use a Timer While Practising:

• This helps you build discipline and finish all case studies in time.

Stick to Your Timing Plan in the Exam:

• Even if a question looks solvable with more time, move on.
• You don’t want to run out of time and miss easier questions, like those in Ethics, that can be quick wins.

Practising this pacing regularly helps you stay calm, cover all questions, and avoid last-minute stress.

8. Ignoring Ethics and Professional Standards

• Many candidates assume that Level 1 ethics prep is enough and skip proper study for Level 2 ethics.
• But Level 2 dives into complex situations, including:
  • Conflicts of interest
  • Fiduciary duty
  • Insider information
• Ethics has a 10–15% weight, and skipping it means losing out on less math-heavy but high-scoring questions.

Solution: Study Ethics Seriously and Practice Case Scenarios

• Spend 20–30 hours on ethics—treat it like a core topic, not an add-on.
• Read the CFA Institute’s Code of Ethics and Standards in full.
  • Focus on:
    • Standard III – Duties to Clients
    • Standard VI – Conflicts of Interest

Practice Case Studies:

• Use CFA Institute’s ethics cases to practice:
  • For example, deciding if a portfolio manager’s actions break fiduciary duty
• Carefully read answer explanations to spot small details, like:
  • The difference between what’s “suggested” and what’s “required”

Watch for Trick Questions:

• Ethics questions can be subtle.
  • Example: A case may ask if an analyst not reporting a personal investment is a violation.
  • You’ll need to think carefully and apply the standards correctly.

Taking ethics seriously not only helps you gain easy points but also boosts your score in a key section that many candidates overlook.

9. Studying Alone Without Help

• Some candidates try to study completely on their own and avoid asking for help.
• This becomes a problem for hard topics like:
  • Quantitative Methods
  • Derivatives
  • Fixed Income
• Without support, gaps in understanding remain, especially with complex concepts that need explanation.
• Studying alone can also lower motivation and discipline, making it harder to stay on track.

Solution: Join a Study Group or Learning Community

• Being part of a study group helps you:
  • Understand difficult topics
  • Stay motivated
  • Stick to your study schedule.

Ways to Get Support:

• Join in-person or online study groups to:
  • Share notes
  • Discuss tricky topics
  • Clear doubts quickly

Example:
Your group might help explain how to:

• Calculate the value of a swap in a fixed-income case
• Understand regression in quantitative methods.

Ask Experts for Help:

• Talk to CFA charterholders or instructors for help with tough areas like:
  • Option strategies
  • Lease accounting
• If you’re enrolled in a course (like IMS Proschool), attend:
  • Live classes
  • Doubt-clearing sessions

Don’t Hold Back Questions:

• Asking one question may help you understand many connected ideas.
• Regular discussions with others also help you stay focused and follow your study plan.

Collaborating with others turns preparation into a more effective—and more motivating—experience.

10. Ignoring Health and Well-being

• Studying too much without proper rest or care leads to burnout.
• Skipping sleep, exercise, or good food lowers your:
  • Focus
  • Memory
  • Performance on exam day
• Long study hours without breaks harm brain function, and poor habits increase stress and fatigue, especially in the final weeks before the exam.

Solution: Follow a Healthy and Balanced Routine

• Sleep well: Get 7–8 hours of sleep every night to help with memory and problem-solving.
• Take breaks: After every 90 minutes of study, take a 20–30 minute break.
  • Use breaks for light stretching or a short walk to stay alert.

Exercise Regularly:

• Do 30–60 minutes of activity 3–4 times a week, like:
  • Jogging
  • Yoga
  • Gym workouts
• This helps cut stress and improve focus.

Eat Well:

• Have balanced meals with:
  • Proteins
  • Whole grains
  • Vegetables
• Avoid too much caffeine or sugar, which can cause energy crashes.

Take Time to Recharge:

• Take one full day off each week to:
  • Relax
  • Enjoy hobbies
  • Spend time with friends

Handle Exam Stress:

• Use simple tools like:
  • 10-minute meditation
  • Deep breathing exercises

A healthy routine keeps your mind and body strong so you’re ready to perform your best during the 4 hours and 30 minutes exam.

Also Read- CFA Level 2 – Your Ultimate Guide to Exam Structure, Fees, Syllabus, Prep, Classes & More

Study Plan and Tips for CFA Level 2 Success

Having a clear study plan is one of the best ways to pass CFA Level 2. Here’s a step-by-step 6-month plan with simple, useful tips:

Months 1–3: Build Strong Basics (120–150 hours)

• Spend 10–12 hours each week reading the CFA curriculum.
• Cover 1–2 topics each month, like Quantitative Methods or Financial Reporting.
• Focus on understanding concepts, taking notes, and doing end-of-chapter questions.

Examples:

• Adjust financial statements for leases in Financial Reporting.
• Calculate beta in Quantitative Methods.

Use flashcards to learn key formulas like duration or WACC, but also solve practice questions to apply them.

Aim to complete 50–100 questions per topic to check your understanding and find weak spots.

Months 4–5: Practice Deeply (100–120 hours)

• Focus more on case study practice now.
• Complete 1,000–1,500 questions across all topics.
• Do about 20–30 case studies per topic, timing each at 7–8 minutes.

Take 2–3 mock exams to see how ready you are.
After each mock, go over your mistakes to fix problem areas.

Example:

• If you miscalculate deferred tax liabilities, review the concept and practice more questions on it.

Based on mock scores, spend more time on low-scoring topics like derivatives or ethics.

Month 6: Revise and Simulate Exam (60–80 hours)

• Go back to weaker topics, using 15–20 hours per week to review.
• Take 4–5 full mock exams, sticking to real exam timing.

Keep up your time management:

• Spend 7–8 minutes per case study.
• Skip hard questions if needed and come back later.

Example:

• Move past a tough derivatives question so you can answer easier ethics questions and earn more points.

Do a quick review of all topics using notes or summaries, with extra time on Equity Investments and Fixed Income (high-weight topics).

Study Tips

• Use tools like Excel or Notion to plan your week and track your scores.
• Mix things up each week:
  • 4 hours of reading
  • 4 hours of practice
  • 2 hours of review
• Set weekly goals to stay on track, like finishing 100 practice questions or mastering one topic.
• Study in 90-minute blocks with short breaks to boost focus.
• Celebrate milestones—treat yourself after completing a topic to stay motivated.

 

Also Read- Unlock Job Opportunities After CFA Level 2 

Must-Know Tricks for Success

Focus on High-Weight Topics

Spend 40–50% of your total study time on Financial Reporting, Equity Investments, and Fixed Income. These three topics carry a combined weight of 30–40% and can make a big impact on your final score.

Example:
Understand key concepts like lease accounting adjustments in Financial Reporting or DCF valuation methods in Equity Investments. These often appear in case studies and give you a scoring advantage. It’s important to cover all 10 topics, but prioritise the ones that give the highest return.

Practice with CFA Institute’s Official Materials

Use the CFA Institute’s official question bank, topic tests, and mock exams regularly. These materials match the actual exam in style, level of difficulty, and case study format. Practising with them helps you understand what to expect and builds your exam confidence.

Review Incorrect Answers to Understand Mistakes

Don’t just move past wrong answers. Review each mistake and figure out why you got it wrong.

Example:
If you miscalculate a swap’s value in a Fixed Income question, review the formula, revisit the concept, and then do at least 10 similar questions to reinforce learning.

Keep an error log for topics where you make repeated mistakes—like ethics or financial reporting—and track improvements over time. Fixing these weak areas can improve your overall score.

Stay Consistent and Motivated Throughout the Preparation

Stick to a regular study schedule of 10–15 hours per week, even during busy periods. Break your prep into small, clear goals, such as mastering one topic every 2–3 weeks.

Example:
If you complete a mock exam, reward yourself with something enjoyable—like a movie night or a day off. These small rewards keep you motivated. Also, join a study group or IMS Proschool’s online community to stay accountable and engaged.

Also Read- Essential Insights into the CFA Level 2 Syllabus & Course Outline

How IMS Proschool Helps You Avoid These CFA Level 2 Pitfalls

Structured Learning to Prevent Underestimation

IMS Proschool provides a clear 6-month study plan, guiding students to dedicate 300–350 hours across all topics. The course is structured to match the exam’s level of difficulty, so you don’t underestimate it.

Classes are led by CFA charterholders and finance experts with 20+ years of experience. They simplify tough concepts like derivatives and portfolio management.

Example:
Teachers clearly explain how to apply models like Black-Scholes or binomial trees in a case study setting—giving you more clarity and confidence.

Case Study-Focused Practice

The course emphasises case study practice, offering over 1,000 questions and 8–10 full-length mock exams.

You’ll get better at identifying key data points in long case studies, such as calculating goodwill in a merger or spotting important ratios in portfolio analysis. You’ll also learn to manage your time properly—7–8 minutes per case study, just like the actual exam.

Practice sessions are designed to reflect exam conditions, helping you avoid common problems like poor time management or unfamiliarity with the format.

Understanding Over Memorisation

Rather than just teaching you to memorise formulas, IMS Proschool focuses on building a deep understanding.

Example:
Instructors use real-world examples to explain concepts like WACC or regression analysis. You’ll learn how to use these in practical settings—such as calculating NPV for a corporate finance case or adjusting financials for foreign currency changes.

This approach helps you apply your knowledge to complex problems, not just recall facts.

Full Topic Coverage

The course fully covers all 10 topics in the CFA Level 2 curriculum, including those often skipped, like Alternative Investments and Ethics.

You’ll get 20–30 hours of ethics-focused learning, helping you handle tough scenarios like conflicts of interest, fiduciary duty, or insider information. Lesser-weight topics like Alternative Investments are also taught in enough depth to help you grab every available mark.

Community and Mentorship

IMS Proschool creates a team-based learning environment. You’ll have access to study groups, live classes, and online discussion forums.

Example:
You can get your doubts cleared in areas like fixed income or quantitative methods, and join doubt-clearing sessions focused on detailed topics like bond duration or currency risk adjustments. This support helps you stay focused and reduces the stress of studying alone.

Well-Being Support

Studying for CFA Level 2 is intense, but IMS Proschool helps you stay balanced. The program includes tips and resources for:

• Taking breaks at the right times
• Managing stress and fatigue
• Following flexible learning schedules

You can choose from online classes or attend sessions in cities like Mumbai, Delhi, Bangalore, Pune, and 15+ cities across India—whatever works best for your routine. This helps avoid burnout and keeps your energy high during the long prep period.

Career Support

IMS Proschool goes beyond the exam. It helps you move into top jobs with:

• Resume-building workshops
• Mock interviews
• Connections with top companies like Deloitte, PwC, Goldman Sachs, and JP Morgan

With a 70% placement success rate, students often get roles as financial analysts or investment bankers, with starting salaries between ₹7–15 LPA in India, according to Digit Insurance.

This means your hard work during CFA Level 2 prep turns into real job opportunities and career growth.

Conclusion

CFA Level 2 is a tough challenge—but it’s absolutely possible to pass with the right approach. By avoiding mistakes like starting late, underestimating case studies, or ignoring your health, you can greatly improve your chances.

Stick to a clear study plan, practice regularly with mock exams, and focus on high-weight topics to stay on track. IMS Proschool gives you everything you need—expert guidance, real-world resources, and career support—to not just pass the exam, but grow in the finance industry.

Don’t wait. Enrol in IMS Proschool’s CFA Level 2 course today and take your next big step toward becoming a Chartered Financial Analyst.

FAQs

1. When should I start preparing for CFA Level 2?

Start 6-8 months before (November for June, May for November) to allocate 300-350 hours. This gives time to cover the curriculum, practice case studies, and review weak areas. For example, starting in November means 12 hours weekly for 6 months, totalling 312 hours, enough for solid preparation.

2. How is the case study format different from Level 1?

Level 1 has single multiple-choice questions testing one idea, while Level 2’s case studies are 1-2 paragraph stories with 4-6 questions. They require finding key data, like financial ratios or portfolio details, and applying ideas, like calculating goodwill in a merger, underเวลา pressure.

3. Why study all topics in CFA Level 2?

All 10 topics are tested across 22 case studies (vignettes) in the exam, and weaknesses in any, even smaller ones like alternative investments (5-10%), can lower your score. A full study ensures you gain points everywhere, as the passing score is about 70%. For example, mastering ethics and alternative investments can add 10-15 points.

4. How do I manage time in the CFA Level 2 exam?

Practice pacing with mocks, spending ~12 minutes per vignette or ~3 minutes per question. Skim case studies, read questions first, and mark tough ones to return later. For example, skip a hard derivatives calculation to secure ethics points, ensuring you finish all 44 case studies.

5. What resources are best for practising CFA Level 2 questions?

Use CFA Institute’s question bank, topic tests, and mocks for exam-like practice https://www.cfainstitute.org/. Add case study questions. Practice 20-30 case studies per topic and 6-8 mocks to build familiarity and fix weaknesses, like miscalculating ratios.

6. How important is the ethics section in CFA Level 2?

Ethics (10-15% weight) is key, testing complex scenarios like fiduciary duty or conflicts. It’s less math-heavy but needs careful use of the Code and Standards. Spend 20-30 hours practising 50+ case studies to secure 10-12 points, which can make a big difference.

7. Should I join a coaching institute for CFA Level 2?

Yes, places like IMS Proschool offer structured plans, expert guidance, case study practice, and community support, helping avoid mistakes like starting late or skipping ethics. Their resources, mocks, and job placement support improve preparation and career prospects.

8. How do I balance study and well-being?

Take 20-30 minute breaks every 90 minutes, sleep 7-8 hours nightly, and exercise 3-4 times weekly (e.g., jogging, yoga). Eat balanced meals, avoid too much caffeine, and take one day off weekly for hobbies or friends. Practice 10-minute meditation to manage stress, ensuring focus and exam readiness.