CFA Level 2 Syllabus & Subjects 2024 - Pattern, Important Topics

Ethical and Professional Standards

• Professional Standards of Practice
• Ethical Practices
• Asset Manager Code of Professional Conduct
• Presentation of Performance Results (GIPS)

• To understand about the ethics and related challenges to ethical behavior.

• Know the about the role that ethics and professionalism play in the investment industry

10–15%

Financial Statement Analysis

• Analysis of Financial Statements
• Financial Reporting Quality
• Analysis of Off-Balance-Sheet Assets and Liabilities
• Analysis of Stock Compensation and Other Employee Benefits
• Analysis of Intercorporate Investments and Business Combinations
• Analysis of Global Operations
• Building a Company Financial Model
• Ratio and Financial Analysis
• Financial Analysis of Banks and Insurance Companies
• ESG considerations in Financial Statement Analysis

• Aims to provide thorough explanation of financial reporting procedures

• Understand the standards that govern the financial reporting disclosures

10-15%

Equity Investments

• Types of Equity Securities and Markets
• Fundamental Equity Analysis
• Valuation of Individual Equity Securities
• Equity Market Valuation
• Equity Portfolio Management
• ESG considerations in Equity Investments

• Understand the workings of equity investments, security markets, and indexes

• Know how to analyze industries, companies, and equity securities as well as the use of basic equity valuation models

10-15%

Fixed Income

• Types of Fixed Income Securities and Markets
• Fundamental Fixed Income
• Term Structure Determination and Yield Spreads
• Valuation of Individual Fixed Income Securities
• Analysis of Interest Rate Risk
• Analysis of Credit Risk
• Valuing Bonds with Embedded Options
• Structured Products
• Fixed Income Portfolio Management Strategies
• ESG considerations in Fixed Income

• Learn about the fixed income securities and their yield measures, risk factors, markets, and valuation measurements.

• Calculating yields, the securitization of assets, fixed income securities, bond returns and risks, credit analysis.

10-15%

Corporate Issuers/ Finance

• Corporate Structures and Strategies
• Corporate Ownership and Governance
• Risk Factors (including environmental and social)
• Corporate Financing Decisions
• Corporate Actions, Combinations, and Restructuring

• Introduction to corporate governance

• Know the growing impact of environmental and social considerations in investing

5-10%

Quantitative Methods

• Time Value of Money
• Probability Distributions and Concepts
• Sampling and Estimation
• Regression Analysis
• Artificial Intelligence/Machine Learning and Big Data Analysis and Applications
• Time-Series Analysis
• Back-testing, Simulation, and Scenario Analysis

Exploring about quantitative concepts and techniques used in financial analysis; investment decision making

5-10%

Economics

• Market Forces of Supply and Demand
• The Firm and Industry Organization
• Business Cycles
• Inflation and Deflation
• International Trade and Capital Flows
• Currency Exchange Rates
• Monetary System, Monetary and Fiscal Policy
• Economic Growth and Development
• Effects of Regulations
• Economic Analysis and Setting Capital Market Expectations
• Effects of Geopolitics on Economies and Investment Markets
• Applications of Economic Factors in the Investment Process

• To analyse the fundamental concepts of supply and demand

• Understand various market structures, macroeconomic concepts and principles

5-10%

Portfolio Management and Wealth Planning

• The Investment Policy Statement
• Modern Portfolio Management Concepts
• Investment Vehicles (including ETFs and Mutual Funds)
• Market Efficiency and Passive Investing
• Market Indexes
• Behavioral Finance
• Environmental, Social, and Governance (ESG) Investing
• Management of Individual/Family Investor Portfolios
• Tax Impact of Investment Decisions
• Management of Institutional Investor Portfolios
• Investment Manager Selection
• Asset Allocation
• Portfolio Construction and Revision
• Currency Management
• Liability – Driven Investments (including Asset Liability Management and Goal-Based Investing)
• Risk Management (including environmental risk)
• Execution of Portfolio Decisions (including Trading and Market Microstructure)
• Performance Attribution and Appraisal

Learn about the fundamentals of risk and portfolio management

10-15%

Derivatives

• Types of Derivative Instruments and Markets
• Valuation of Forwards and Futures Contracts
• Valuation of Option Contracts
• Valuation of Swap Contracts
• Uses of Derivatives in Portfolio Management

• Valuation concepts such as swaps, forwards, futures, and contingent claims

• Conceptual framework related to derivative markets and derivatives

5-10%

Alternative Investments

• Types of Alternative Investments
• Real Estate
• Real Assets (including Infrastructure, Timber and Farm Land)
• Private Capital (including Private Equity, Private Credit and Venture Capital)
• Hedge Funds
• Commodities
• Alternative Investments Portfolio Management
• ESG considerations in Alternative Investments

Know about edge funds, commodities, private equity, real estate, and infrastructure

5-10%

Ethical and Professional Standards

10–15%

Financial Statement Analysis

10-15%

Equity Investments

10-15%

Fixed Income

10-15%

Corporate Issuers/ Finance

5-10%

Quantitative Methods

5-10%

Economics

5-10%

Portfolio Management and Wealth Planning

10-15%

Derivatives

5-10%

Alternative Investments

5-10%

Format of questions

Vignette-supported multiple choice questions

Total questions

88

Time duration of CFA Level 2 exam

4 hours and 24 minutes (divided in two equal sessions)

Each session time

2 hours and 12 minutes

Medium of exam

English

Marking scheme

3 points for each question

Negative marking

No