CFA® Level II: free lessons, practice and mock exam
Application and analysis: value assets through vignette-based cases. 22 vignette-based item sets with 4 multiple-choice questions each (88 questions), in two sessions of 2 hours 12 minutes.
Quantitative Methods 5–10%
Multiple regression, time-series analysis, machine learning and big data projects.
- Basics of Multiple Regression and Underlying Assumptions
- Evaluating Regression Model Fit and Interpreting Model Results
- Model Misspecification
- Extensions of Multiple Regression
- Time-Series Analysis
- Machine Learning
- Big Data Projects
Economics 5–10%
Currency exchange rates and their equilibrium value, and the sources of economic growth.
Corporate Finance 5–10%
Dividends and buybacks, ESG in investment analysis, advanced cost of capital and corporate restructuring.
- Analysis of Dividends and Share Repurchases
- Environmental, Social, and Governance (ESG) Considerations in Investment Analysis
- Cost of Capital: Advanced Topics
- Corporate Restructuring
Financial Statement Analysis 10–15%
Intercorporate investments, employee compensation, multinational operations, banks, insurers and earnings quality.
- Intercorporate Investments
- Employee Compensation: Post-Employment and Share-Based
- Multinational Operations
- Analysis of Financial Institutions
- Evaluating Quality of Financial Reports
- Integration of Financial Statement Analysis Techniques
Equities 10–15%
The valuation process, dividend discount, free cash flow, market multiples, residual income and private company valuation.
- Equity Valuation: Applications and Processes
- Discounted Dividend Valuation
- Free Cash Flow Valuation
- Market-Based Valuation: Price and Enterprise Value Multiples
- Residual Income Valuation
- Private Company Valuation
Fixed Income 10–15%
Term structure models, arbitrage-free valuation, bonds with embedded options, credit analysis models and CDS.
- 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
Derivatives 5–10%
Pricing and valuation of forwards, futures and swaps; option valuation with binomial and Black-Scholes-Merton models.
Alternative Investments 5–10%
Commodities and commodity derivatives, real estate investment types, REITs and hedge fund strategies.
- Introduction to Commodities and Commodity Derivatives
- Overview of Types of Real Estate Investment
- Investments in Real Estate through Publicly Traded Securities
- Hedge Fund Strategies
Portfolio Construction 10–15%
Economics and markets, active portfolio management, ETFs, multifactor models, market risk and backtesting.
- Economics and Investment Markets
- Analysis of Active Portfolio Management
- Exchange-Traded Funds: Mechanics and Applications
- Using Multifactor Models
- Measuring and Managing Market Risk
- Backtesting and Simulation
Ethical and Professional Standards 10–15%
The Code and each Standard in its own module, applied to complex Level II case studies.
- Code of Ethics and Standards of Professional Conduct
- Guidance for Standard I: Professionalism
- Guidance for Standard II: Integrity of Capital Markets
- Guidance for Standard III: Duties to Clients
- Guidance for Standard IV: Duties to Employers
- Guidance for Standard V: Investment Analysis, Recommendations, and Actions
- Guidance for Standard VI: Conflicts of Interest
- Guidance for Standard VII: Responsibilities as a CFA Institute Member or CFA Candidate
- Application of the Code and Standards: Level II