CFA Level 2 study guide · 2026

The 10 CFA Level 2 domains, explained

10 domains and 33 official topic areas. Ethical and Professional Standards carries the most weight at 10-15%. Each guide explains what the domain covers, how its questions are framed and where candidates lose marks.

Start with Domain 1 See all domains
Questions
88 (22 item sets of 4 questions)
Time
Two 132-minute sessions (about 4.4 hours)
Passing score
Minimum Passing Score set by the Board (not published)
Outline
2026 CFA Level II Curriculum (current)

Exam blueprint

Bar widths follow the official weights. Weight ranges are drawn at their midpoint.

  1. 1 10-15%
  2. 2 5-10%
  3. 3 5-10%
  4. 4 10-15%
  5. 5 5-10%
  6. 6 10-15%
  7. 7 10-15%
  8. 8 5-10%
  9. 9 5-10%
  10. 10 10-15%
  1. 1 Ethical and Professional Standards
  2. 2 Quantitative Methods
  3. 3 Economics
  4. 4 Financial Statement Analysis
  5. 5 Corporate Issuers
  6. 6 Equity Investments
  7. 7 Fixed Income
  8. 8 Derivatives
  9. 9 Alternative Investments
  10. 10 Portfolio Management

All 10 domains

33 official topic areas 275–375 hrs suggested study

  1. Domain 01 10-15%

    Ethical and Professional Standards

    Ethics remains a top-weighted Level 2 topic, now tested through dense vignettes. It covers applying the Code and the seven Standards to complex cases, soft dollars and research objectivity, and GIPS compliance and performance presentation.

    Inside this domain

    • The Code and Standards applied in vignettes
    • Soft dollars, research objectivity, and complex conflicts
    • GIPS compliance and performance presentation

    Watch for Soft dollars for firm costs

    Topic areas
    3
    Questions est.
    ~11
    Study time est.
    35–45 hrs
  2. Domain 02 5-10%

    Quantitative Methods

    At Level 2 this topic deepens into modeling. It covers multiple regression and model building, model misspecification and its violations, and time-series analysis and machine learning.

    Inside this domain

    • Multiple regression and model building
    • Model misspecification, heteroskedasticity, and multicollinearity
    • Time-series analysis and machine learning

    Watch for Significant model, significant coefficients

    Topic areas
    3
    Questions est.
    ~7
    Study time est.
    20–30 hrs
  3. Domain 03 5-10%

    Economics

    At Level 2 economics narrows to two deeper areas. It covers currency exchange rates (their determination and forecasting) and economic growth and the effects of regulation.

    Inside this domain

    • Currency exchange rates: determination and forecasting
    • Economic growth and the effects of regulation

    Watch for Higher-rate currency at a premium

    Topic areas
    2
    Questions est.
    ~7
    Study time est.
    20–30 hrs
  4. Domain 04 10-15%

    Financial Statement Analysis

    This is one of the heaviest and hardest Level 2 topics. It covers intercorporate investments, employee compensation (pensions and share-based), multinational operations and currency translation, and analysis of financial institutions and quality.

    Inside this domain

    • Intercorporate investments
    • Employee compensation: post-employment and share-based
    • Multinational operations and foreign currency translation
    • Analysis of financial institutions and quality

    Watch for Consolidate at 30%

    Topic areas
    4
    Questions est.
    ~11
    Study time est.
    35–45 hrs
  5. Domain 05 5-10%

    Corporate Issuers

    At Level 2 this topic deepens corporate finance. It covers the analysis of dividends and share repurchases, environmental, social and governance (ESG) considerations, and the cost of capital and capital structure in greater depth.

    Inside this domain

    • Analysis of dividends and share repurchases
    • Environmental, social, and governance (ESG) considerations
    • Cost of capital and capital structure in depth

    Watch for Dividend raises EPS

    Topic areas
    3
    Questions est.
    ~7
    Study time est.
    20–30 hrs
  6. Domain 06 10-15%

    Equity Investments

    This is one of the heaviest Level 2 topics and the core of valuation. It covers discounted dividend models, free cash flow valuation, market-based and residual income valuation, and private company valuation.

    Inside this domain

    • Discounted dividend valuation models
    • Free cash flow valuation (FCFF and FCFE)
    • Market-based and residual income valuation
    • Private company and industry valuation

    Watch for FCFF at the cost of equity

    Topic areas
    4
    Questions est.
    ~11
    Study time est.
    35–45 hrs
  7. Domain 07 10-15%

    Fixed Income

    This is one of the heaviest Level 2 topics. It covers the term structure and interest rate dynamics, valuing bonds with embedded options, credit analysis and strategies, and structured and securitized products.

    Inside this domain

    • The term structure and interest rate dynamics
    • Valuing bonds with embedded options
    • Credit analysis and credit strategies
    • Structured and securitized products

    Watch for Volatility helps the callable holder

    Topic areas
    4
    Questions est.
    ~11
    Study time est.
    35–45 hrs
  8. Domain 08 5-10%

    Derivatives

    At Level 2 derivatives move into pricing and valuation. It covers the pricing and valuation of forward commitments, the valuation of options (contingent claims), and the binomial model and option strategies.

    Inside this domain

    • Pricing and valuation of forward commitments
    • Valuation of contingent claims (options)
    • The binomial model and option strategies

    Watch for Forward has value at inception

    Topic areas
    3
    Questions est.
    ~7
    Study time est.
    20–30 hrs
  9. Domain 09 5-10%

    Alternative Investments

    At Level 2 alternatives deepen into valuation. It covers private equity and real estate valuation, commodities, infrastructure and hedge funds, and alternative investment performance and due diligence.

    Inside this domain

    • Private equity and real estate valuation
    • Commodities, infrastructure, and hedge funds
    • Alternative investment performance and due diligence

    Watch for Commodity return is just spot

    Topic areas
    3
    Questions est.
    ~7
    Study time est.
    20–30 hrs
  10. Domain 10 10-15%

    Portfolio Management

    This is one of the heaviest Level 2 topics. It covers exchange-traded funds and portfolio construction, multifactor models and risk, the economics of active management and attribution, and trading and performance evaluation.

    Inside this domain

    • Exchange-traded funds and portfolio construction
    • Multifactor models and risk
    • The economics of active management and attribution
    • Trading, performance evaluation, and the investment process

    Watch for Sharpe for active skill

    Topic areas
    4
    Questions est.
    ~11
    Study time est.
    35–45 hrs

Study the heaviest domains first

Marks follow weight. This order puts the most marks behind you first, across about 275–375 hrs of study.

  1. 1 Ethical and Professional Standards 10-15% · 35–45 hrs
  2. 4 Financial Statement Analysis 10-15% · 35–45 hrs
  3. 6 Equity Investments 10-15% · 35–45 hrs
  4. 7 Fixed Income 10-15% · 35–45 hrs
  5. 10 Portfolio Management 10-15% · 35–45 hrs
  6. 2 Quantitative Methods 5-10% · 20–30 hrs
  7. 3 Economics 5-10% · 20–30 hrs
  8. 5 Corporate Issuers 5-10% · 20–30 hrs
  9. 8 Derivatives 5-10% · 20–30 hrs
  10. 9 Alternative Investments 5-10% · 20–30 hrs

Try one

Practice questionDomain 1: Ethical and Professional Standards

In a vignette, a portfolio manager directs client trades to a broker in exchange for soft-dollar (client brokerage) benefits. She uses the soft dollars to purchase an equity research service that benefits her clients' portfolios, and also to pay part of her firm's office rent. Which use, if any, violates the CFA Institute Standards?

One trap from every domain

The answer that looks right, and the clue that gives it away.

  • Domain 1

    Soft dollars for firm costs

    Clue Client brokerage is used for the firm's own overhead.

  • Domain 2

    Significant model, significant coefficients

    Clue The model is significant but individual coefficients are not.

  • Domain 3

    Higher-rate currency at a premium

    Clue A currency has the higher interest rate.

  • Domain 4

    Consolidate at 30%

    Clue The stake gives significant influence, not control.

  • Domain 5

    Dividend raises EPS

    Clue The question compares the EPS effect of a dividend versus a repurchase.

  • Domain 6

    FCFF at the cost of equity

    Clue The cash flow is FCFF, to be used for firm value.

  • Domain 7

    Volatility helps the callable holder

    Clue Volatility rises and the bond is callable.

  • Domain 8

    Forward has value at inception

    Clue The forward was just initiated at the fair price.

Other Finance certifications

Study guides for exams that overlap with CFA Level 2.

Practise what you read

CFA Level 2 domains: common questions

How many domains are in the CFA Level 2 exam?

CFA Level 2 has 10 domains with 33 official topic areas between them: Ethical and Professional Standards, Quantitative Methods, Economics, Financial Statement Analysis, Corporate Issuers, Equity Investments, Fixed Income, Derivatives, Alternative Investments and Portfolio Management.

Which CFA Level 2 domain carries the most weight?

Ethical and Professional Standards is the heaviest at 10-15%, followed by Financial Statement Analysis (10-15%). The lightest is Alternative Investments (5-10%). Weights come from CFA Institute's official outline.

What is the CFA Level 2 exam format?

Questions: 88 (22 item sets of 4 questions). Time allowed: Two 132-minute sessions (about 4.4 hours). Passing score: Minimum Passing Score set by the Board (not published).

How long should I study for CFA Level 2?

Our planning estimate is 275–375 hrs across all domains, split by weight. It is an editorial estimate, not an official figure, so adjust it to your experience and to how you score on practice questions.

Where should I start?

Start with Ethical and Professional Standards, because it carries the most marks, then work down by weight. Use the checklist on each domain page to confirm you can do what the domain asks before moving on.

Which outline is this guide based on?

This guide follows 2026 CFA Level II Curriculum (current), published by CFA Institute. It was last reviewed in October 2026.

Domain names, weights and topic areas come from CFA Institute's official outline (2026 CFA Level II Curriculum (current)). Question counts and study hours are editorial planning estimates, not official figures. Last reviewed October 2026.