【CFA Exam Tips】How to pass CFA Level 3 in first attempt? | Exam Skills to tackle CFA Level 3 Essay Questions| Free Resources

How to pass CFA Level 3 in first attempt? | Exam Skills to tackle CFA Level 3 Essay Questions| Free Resources



11/4/20238 min read

  • Congrats! You’ve passed the CFA Level 2 exam, the most difficult of the three levels. Now, you are only one step away from obtaining the CFA professional qualification!

  • Yet, never underestimate this final step! I came across many guys who are good at numbers like those having completed FRM or even with a statistics or risk management degree, have been stuck in CFA level 3.

  • So, their LinkedIn profilse have been showing ‘passed CFA level 2 Exam’ for years, instead of having the ‘, CFA’ suffix following their name, like Mary Chan, CFA. (Note: The CFA Institute forbids you to partially claim to be a ‘CFA Level 2’, while it’s okay state the fact that you have ‘passed CFA level 2 exam’, or you are a ‘CFA Level 3 candidate’ if you have enrolled in the exam).

  • From my personal experience, CFA Level 2 is the most difficult of the three levels because it has the most formulas, the widest range, and the most complex calculations. To compare their difficulties on a scale of 1 to 10, I think CFA level 1 is 4.5, CFA level 2 is 9, and CFA level 3 is 8.

  • However, the CFA Level 3 exam, on one hand, contains a number of vignettes each followed by several MCQs; on the other hand, a range of essay questions.

  • Essay questions makes it disadvantageous for students with weak English reading comprehension and writing skills. Not only do you need to understand the context of vignettes and questions to decide which formula to use and which numbers to extract for calculations, but you also need to know how to express your ideas clearly in English.

  • Key facts of CFA level 3

    • Exam format: Same as the CFA Level 2 exam, the CFA Level 3 exam also consists of 2 sections, totaling 4 hours and 24 minutes, divided equally into two sections with a 30-minute break in between.

    • Question format: A total of 11 sets of vignette MCQs + 11 long questions and answers. In other words, each exam section has 6 sets of vignette MCQs + 5 long questions and answers, or 5 sets of vignette MCQs + 6 long questions and answers (p.s. Before 2023, there was be one section with all vignette MCQs and another section with all essay questions). You may first take a look at the official CFA Level 3 sample questions to get a feel for it.

    • Topic areas: It’s still the same 10 topics, but CFA Level 3 exam has a lot more about applications. You’ll usually play the role as a Portfolio Manager or a Fund Manager and you’ll apply the knowledge and skills learnt at the three levels to actual situations to solve problems for your clients.

  • Pass rate: The recent 10-year average pass rate of CFA level 3 exam is 52% of candidates. The latest CFA Level 3 pass rate in Aug 2023 is 47%. Let me remind you again, this is a concept of conditional probability. Candidates for Level 3 must first pass Level 1 and Level 2. If the pass rate for the first two levels is 36% and 44% respectively, the pass rate for Level 3 is 0.36*0.44*0.47 = 0.07. In other words, out of the initial 100 candidates who applied for CFA Level 1, only about 7 were able to obtain the CFA professional qualification, irrespective of the candidates who dropped out midway.

  • How to pass CFA Level 3 in 3 months in first attempt?

    • Now that you have passed CFA level 2, I believe you are good enough at numbers to cope with CFA level 3. However, unlike level 2, essay questions require clearer steps of logical thinking which are very different from MCQs with regard to both the exam skills, studying methods and depth required.

    • I mean, when you are not so sure about an MCQ, you can try with different formulas and numbers in your calculations or even try your luck by guessing. However, in essay questions, you’ll never get a point by bullshxting some general knowledge because that will not hit the keywords or concepts in the marking scheme.

    • If you want to learn how to deal with essay questions, it is recommended that you must do all the questions in the question bank and practice exams (more than a thousand questions). The most important things to learn from official solutions are the logical steps of thinking and the answer structures.

Exam Skills to tackle CFA Level 3 essay questions

  • Essay questions sound like you are required to write a long and beautiful article. In fact, you don’t actually need to do so. Firstly, there‘ll not be enough time for you, and secondly, this will make the examiner lose his/her patience. In fact, the method of tackling essay questions is simple:

  1. Essay questions usually explicitly require you to answer a certain number of points. Let’s say, now the question requires you to give X reasons, then you should structure your response into into X separate paragraphs or X bullet points, so that the examiner can easily score them one by one (If you group 3 bullet points altogether in one massive paragraph, the examiner may judge based on the content that you only gave two bullet points, so you’ll only get up to 4 points for a 6-point question). Also, only write X bullet points if only X are required in the question. Don’t give the (X+1)th bullet point as only the first X will be marked and the (X+1)th will be ignored directly.

  2. Just write only 2–3 complete sentences for each paragraph or bullet point. You may think some official solutions are also very long, but they are only that long for candidates to learn. In the exam, don’t write too much or give some general knowledge to try to muddle through. Practise more questions and read more solutions, and you’ll know what the examiners want.

  3. Feel free to directly use commonly used abbreviations in textbooks to save your time, such as NPV, IRR and CDS instead of Net Present Value, Internal rate of return and Credit default swap.

  4. Don’t worry about grammar or vocabularies. CFA Level 3 is a financial professional exam, not an IELTS/TOFEL English test. If you make a grammatical mistake, you won’t be deducted points. Just express your ideas clearly clearly and use simple and direct vocabularies. Of course, it is still best not to wrongly spell some keywords though such as those in the ethics part, like ‘misrepresentation’.

  • CFA Level 3 Exam tips, Shortcuts, Free Resources:

    1. Tutorials on CFA level 3 essay questions (Recommended ★★★★☆)

    Essay questions at CFA Level 3 are unprecedented in the previous two levels, so the learning and practising method should also quite different. After reading this article, you can also learn more about this type of questions from other tutorials to familiarise yourself with it.

2. CFA Official Practice Question Bank and Mock Exams (Recommended ★★★★)

  • The free practice question bank provided by the CFA official website contains about a thousand MCQs and essay questions andsolutions. The format is similar to the difficulty and examination. The most important thing is that you can learn and take notes from the detailed solutions of the the essay question. Practising is the most important for CFA Level 3 than previous levels. So it is recommended to complete all the questions in the question bank. If you really don’t have time, at least read the solutions of the whole question bank.

  • The official mock exam is an absolute must-do! CFA Level 3 provides four mock exams, which are four PDFs with full sets of questions and solutions for your to download and manually practise, unlike CFA Level 1 and 2 where you can answer and submit directly on the online portal.

  • It is recommended to complete mock exams 1–2 weeks before the exam. First, you can have a taste of the actual exam and time yourself to test your speed. Second, you can enrich your notes thanks to the solutions of mock exams. Third, you can identify your weakest topic areas and spend more time to review them.

3. CFA Level 3 Schweser’s Secret Sauce (Recommended ★★★★★)
  • Condensing thousands of pages of official cirriculum into around 200 pages. For CFA Level 3, I use Schweser’s Secret Sauce instead of the Quicksheet for a bird view, a formula sheet, or a table of contents for an overview, so I raise the level of recommendation to 5 stars this time.

  • Given essay questions, it is recommended to first read the official cirriculum or Schweser’s notes to learn the concepts.

  • If time is too tight, you can also just read the Secret Sauce and then do the questions. But you’ll surely find at least 1/4 to 1/3 questions not fully covered by Secret Sauce. Then, you’ll need to take your own notes after learning from the solutions and add them to Secret Sauce, so that the two combined can make an ultimate tool for review.

4. Official Cirriculum/ Schweser Notes(Recommended ★★★★☆)
  • The official cirriculum and the Notes that condenses it into more than a thousand pages. I think these two are substitues that you can just pick either one.

  • If time allows, reading this directly is the best way. Because essay questions require you to know how to both calculate and express your ideas, so you need to have a deeper understanding of all concepts.

5. IFT CFA Level 3 Paid Tutorials (Recommended★★☆☆☆)

  • IFT puts their CFA level 1 teachings on YouTube for free as a promotion, but they start charging for level 2. Although his English had a bit of an Indian accent, the instructor was very exam-oriented, straight to the point, and very capable of explaining concepts for the CFA exam. He speaks a bit slowly, so you might as well listen at 1.5x or 2x speed. Of course, you can also try to use your own channels (such as some telegram groups) to purchase unofficial old versions, but you do so at your own risk and consequences.

6. CFA Level 3 Schweser’s Quicksheet (Recommended★☆☆☆☆)
  • Bought it and regreted it, because I barely used it. This quicksheet of several pages was very useful for CFA Level 1, not that useful for CFA Level 2, and feel like almost useless for CFA Level 3, so my recommendation level is greatly reduced to 1 star.

  • To deal with the essay questions at CFA Level 3, even for a final review or a bird view, 200 pages of secret sauce are needed, combined with the notes written after doing the questions and looking at the solutions.

7. Youtube tutorials on financial calculator (Recommended★☆☆☆☆)
  • You won’t need to use your financial calculator so frequently in your CFA level 3 exam as your Level 2 exam. Also, as you have passed CFA Level 2, you are already a veteran that such a tutorial has become nothing but a refresher to you. Therefore, my recommendation level has been greatly reduced from 5 stars to 1 star.


  • Don’t underestimate the CFA Level 3 essay questions. Your learning methodology and exam skills must be largely adjusted to deal with the essay questions.

  • Learning from the Secret Sauce is often not in-depth enough, and you will find that many items not covered enough when doing the questions. So, you’d better also learn from both the Schweser Notes and official question solutions. Better spend like half a year to get yourself prepared.

  • Just one final step from your CFA Charter. Good luck! Hope this article is helpful to you. You can find more finance career advice articles in this Medium publication Financial Career Coaches (FCC).

Good luck! Hope this article is helpful to you.