Ranking CFA Exam Topics on Difficulty

Here is a hotly debated topic about the CFA program, and the best list ever made on it.
1 (Easiest) - Economics
2 - Corporate Finance
3 - Equity
4 - Alternative Investments
5 - Ethics
6 - Portfolio Management
7- Fixed Income
8 - Quantitative Methods
9 - Financial Reporting and Analysis
10 (Hardest) - Derivatives
If you have an idea of something you want me to cover in depth, please let me know because I take your requests seriously. Will be back with more CFA Exam tips in a couple of weeks so please submit more questions you would like to hear answered. Love you all!
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** The information in this video is not intended or implied to be a substitute for professional financial advice. All content, including text, graphics, images, and information, contained in this video is for general information purposes only and does not replace a consultation with your financial or tax professional**

[@sam10coumans]

My take after sitting the Level 1 exam in Feb, regarding studying: Ethics - ALWAYS a gray area for me. I infrequently felt like these questions were black or white, but just practicing as many as possible made you more prone to pick the right answer. Doesn’t mean it’ll make any more sense though. Makes less sense the more you think about it at times. QM - stats, time value of money, hardest part was actually memorizing the different hypothesis tests and test statistics for me. Tough starting off actually. Econ - very doable. Inefficient in terms of amount of content to study vs questions on the exam, but quite straightforward. FRA - quite long, difficult, detailed. Hardest for me. Mentally draining to study. Never felt like I grasped enough of it, felt like I’d have to make up for this in other sections. Corporate Finance - pretty straightforward, I didn’t feel too phased once getting the NPV/IRR problems down pat. Equities - similar vibe to Corp fin feeling, but different content of course. Fixed Income - frustrating at first, but very doable once you get the formulas memorized. Felt most accomplishing doing these right consistently. Derivatives - a bit easier or harder depending on the day than fixed income but similar feeling. Not as satisfying because a bit easier towards the end of studying. Alts - this was very tricky because it was so random. Seems to be very little flow, rhyme or reason. Can’t say much more about it. The joker. PM - very applicable and useful, can throw a curveball at you though. Best study habits: practice practice practice, if you don’t understand something watch a video on it rather than try to understand it yourself and memorize formulas in last 2 days.

[@diamondwave100]

Are you not breaking any guidelines by telling us this? You’re giving more detail about the exams than I think you’re supposed to.

[@conwayGAMES]

do they not give you a T-table or formula sheet for hypothesis testing?? or wdym u had to memorize?

[@thomasknight604]

You forgot the hardest topic of them all: staring at yourself in the mirror at 2am debating your life choices

[@ayewohelizabeth1308]

😂 can totally relate. Like why exactly have I chosen to suffer in this manner?

[@Daniel-hs6ct]

Lmaooo

[@oyindamolazeenat8213]

Story of my life right now

[@supriyasingh1186]

How do u know the story of my life😢😢😢

[@aminerachidi9731]

So true. I thought I was the only one that happened to me

[@derekeano]

I recently started studying the CFA, I've been spending a long time on Quantitative Methods and was hoping other sections would be easier. You ranked it the 3rd hardest! I feel more encouraged to keep going. Thanks for the video!

[@straighttalks-ajsrmek323]

No problem, best of luck studying!!!

[@cesarlimones1550]

Same man, I swear I’ve been questioning this whole thing 😅

[@brandoncliffswarts5100]

How's the studying going so far, a year later?

[@TenukiRehara]

PM is my most favorite part too, and I really like fixed income and equity. The most difficult subjects for me are FRA and quants :) I agree with your ranking though.

[@LMMCDIII]

Been patiently waiting until I cleared all 3 levels before I give this one a go, passed level 3 in May so here's my take. 1. Corporate Finance- shouldn't give any major trouble, concepts and calculations rather straightforward. 2. Quants- again pretty straightforward (especially for level 1), does get trickier at level 2 but it's by no means impossible and the lack of it at level 3 means this takes second spot. 3. Equity- this one is a bit frustrating tbh, material isn't overly difficult but the more theoretical questions on indexes etc can get tricky and it was actually in my weaker topics at level 1 and 2. 4. *FRA- if you get to grips with the workings of financial statements and how things are tied together, and can differentiate between GAAP and IFRS, this is not the beast it's made out to be (has an asterisk for a reason, see at the end) 5 Alts/Ethics- yes bit of a cop out I know being unable to separate these two, but my reasoning is to liken them to one of those surveys you fill out where answers range from strongly agree to strongly disagree with don't know in the middle. These two would both fall in the middle for different reasons. Alts was described in one comment as the joker and I don't think I can improve on this take. the topics are so random and seem so disconnected from everything else that it is hard to study for and master. Ethics on the other hand is something which should really be lower down on the list, it's at all 3 levels and much of the material stays the same. The subjectivity of the answers are what makes this one tricky imo, many of them you can find your way going either way between answers so for that reason it's stuck in the middle and not considered easier. 7. Fixed income- can definitely be tricky to get your head around, all the durations etc, it's something I practiced A LOT and whilst it was always one of my stronger subjects, I feel this had a lot to do with the amount of time I dedicated to it as opposed to how easy the subject is. 8. Derivatives- again the concepts can be pretty tricky, valuing all the types of contracts can melt ones brain at first but with practice comes the ability to smash the questions. Same story here with it being one of my stronger subjects but like with FI the amount of time I dedicated to the subjects means I can't really place it further up the list with the easier ones. 9. PM- at levels 1 and 2 this is reasonably straightforward, but for level 3 it encompasses so much of the curriculum, as said before everything seems to be captured through the lens of a PM, for this reason and the fact that the PM for individuals or wealth management or whatever it was called, was simultaneously one of the hardest and definitely most boring topics across all 3 levels this one gets 9th spot. 10. **Economics- this will probably surprise many people but for me it was definitely the hardest topic, so many theories to learn throughout the levels (many of them not holding up at all in the real world), so many times I'd answer a question based off of one economic theory or rationale to find that in the answer they were referencing something completely different, probably the one subject I felt I didn't master, to be honest I don't think I came close to mastering it! *FRA- Have to admit my accounting degree, tied in with the fact I always just seemed to get accounting throughout my school days definitely helps me here. For anyone who has no background in Accounting I can certainly see how this would feature higher up in their list, even with this advantage I had some moments when practicing where I'd be get multiple FRA questions wrong and end up in a rather foul mood! **Economics, here my lack of a background in the subject, tied in with the fact I felt my Prep provider at level 1 didn't do a great job with it definitely put me on the back foot! Perhaps had I used a different provider and maybe mastered it at level 1 it would be different, but I can't be sure I'd ever master the subject to be honest! Also being the only subject I didn't get above 70% at across levels 1 and 2 means I have developed a bit of a disliking to this one! Best of luck everyone!

[@mahekdhavalkaria4666]

Same

[@daviddenicola8247]

Easiest to Hardest IMO (currently studying level 3) 1. Corporate Finance 2. Quant 3. Equity 4. Fixed Income 5. Portfolio Management 6. Derivatives 7. Alternative Investments 8. Economics 9. Ethics 10. FRA

[@karanpatil3650]

Thank God I'm a Chartered Accountant. FRA is the easiest one for me.

[@testadelcomputer1839]

same, thankfully i did CPA too

[@karandodia288]

Currently CFA L1 candidate With less background on accounting, finding FRA challenging to understand. Agreed it is in the high spectrum of difficulty. Need to dial it down really well. Also for ethics the questions tested are so different than study material but with more practice I am understanding the question structure and how one should think while answering. Thanks AJ for providing all the aspirant with great content. :)

[@adityabhadauria4892]

Have you Appear for L1 ?

[@MrDeadlyCrow]

What about ranking for a specific level?

[@chipmoffatt7748]

Great video AJ. I took Level 1 in 2017 and my best to worst scores were as follows: Equity Ethics Alt/Derivatives Fixed Econ Quant FRA Corporate Portfolio Interesting the difference from what you felt--we all have our individual strengths and weaknesses for sure but also interests--I like portfolio but like derivatives and alt better--points to ease of learning? It's hard to learn stuff you find uninteresting or of course, hard. Appreciate this and all your other videos!!!! Thanks. Chip

[@straighttalks-ajsrmek323]

Good points, Chip. Anything is easy to learn if you are interested enough!

[@MohammedAB2030]

If you think Economics is the easiest! you are blessed bro. I'm currently IS-LM in level 1 and I havent been more confused.

[@ImBruces]

Economics is def the hardest in L1 lol

[@MohammedAB2030]

@@ImBruces definitely also the longest

[@marylee570]

From me, I didnot score well on Ethics both L1 and L2, others are fine. I am on L3 now and found Derivatives took me a month to study, it's not difficult, but a lot to read

[@RG-zq2dw]

Hi AJ, can you make video regarding how to prepare to L2 effeciently without burning out :)

[@merc340sr]

As my old high school teacher used to say..."KNOW IT COLD!"....

[@shubhodasgupta4497]

Fortunately, 90% of the Level 1 and Level 2 econ & quant curriculum got covered in my undergrad economics majors.

[@josesantoso1010]

As an auditor and an accounting graduate I find the FRA section relatively easier than economics (I didn't get much exposure to economics other than introduction to econ classes in university) lmao

[@kacksonjeel442]

Went to a non-target yet competitive program and every subject besides some of alts/derivatives overlapped with the curriculum and was presented the same way.

[@looomze]

For me as a finance grad the easiest were FI, Equity, Alternatives, Derivatives and ethics. I failed Feb exam but scored above 70% in those with FI way above 70%. FI was the easiest because the course I took in uni was much difficult and the FI in CFA level I came as a breeze no Tranches calculations or MBS.

[@mohit3494]

Hi AJ. Amazing video. I'm studying derivatives right now n I just wanna nail this subject. Completely agree with your rankings :)

[@straighttalks-ajsrmek323]

Thanks, Mohit!

[@sumamanjunath2480]

Easy to hard: Economics Corp. Finance Equity Alternative investments Ethics Portfolio Management Fixed Income Quantitative Methods FRA Derivatives

[@loganfrank3134]

Majoring in accounting is the ultimate cheat code to level 1

[@straighttalks-ajsrmek323]

Big time.

[@TheTruthFadeswithTime28]

I wonder how much an accounting background and Asset & Wealth Management Audit experience as well as a passing the CPA exams will help.

[@straighttalks-ajsrmek323]

Having the CPA helps a lot!

[@MK-eu3es]

I have to respectfully disagree about your derivatives take, but otherwise great video 🎉 you can make the “already available information” argument for FRA and Equity information as well - Bloomberg has forward / trailing Multiples available, but you still have to understand the input to this information and the nuances in the accounting. Same with fixed income durations and binomial trees. If you are going to be working in options trading, hedging, etc, it’s important to understand.

[@sokhasen8146]

I do agree that Derivatives is difficult.

[@dakshpreetkaur2248]

Really helpful AJ thnks 👍

[@Lhawga]

Good stuff my guy

[@kamranalavi2012]

If you come from any mathematics-like undergrad, quant should be a breeze.

[@straighttalks-ajsrmek323]

True

[@patrickmacarilay7062]

I agree - I had a blast with quant coming from a stem background… that quickly started going downhill with the ethics section

[@i123456987654]

super helpful thank you

[@david7890]

Have you taken CFA practice exams or looked through the curriculum since the CBT conversion? The curriculum MAY have changed slightly since you passed.

[@straighttalks-ajsrmek323]

No, have not. I know a couple LOSs have been updated but the rest of the curriculum is supposed to not have changed.

[@sgk7835]

Having done a degree in economics and finance, Will I have an advantage in CFA? will it be abit easier for me?

[@straighttalks-ajsrmek323]

Yea it might be slightly easier.

[@renzzo_contreras]

So RFA is one of the most difficult topics. Interesting because that is basically Accouting and that's my career. The future is telling me something :")

[@straighttalks-ajsrmek323]

Right. An accounting background can help. But I have heard CPAs say the material in FRA is a bit different from public accounting, Mostly because you need to know bits from both USGAAP and IFRS.

[@emilianoperez2385]

Hey! I’m a Finance Sophomore at a non-target Mexican university, I want to eventually work towards getting the CFA certification. Do you recommend that I start studying now even if I can’t do the exams for 2 more years? If so, what do you think I should focus on? Thanks btw, love your content!

[@straighttalks-ajsrmek323]

Hey Emiliano, thanks for the kind words! No I don't think you should start towards the CFA now. Maybe in your final year of university though. For now focus on making the highest grades that you can because employers will care about this a lot after university.

[@xweb46]

Hi, I recently saw another of your videos in which you explained a little bit of the long term investment strategy. Actually, I already read The Intelligent Investor Graham and the Warrent Buffet Way. During all my time spent reading I was wondering about 1 fact. What does exactly a trader does? And why so many banks have these position? Maybe they operate only on common stocks...? dunno... hopefully you will enlighten me! Thank you for your time.

[@straighttalks-ajsrmek323]

They trade securities back and forth for short periods of time. They can trade in stocks, bonds, currencies, commodities, and many other things.

[@antonio_rdz710]

Do this rank per level pls, specially for level II

[@straighttalks-ajsrmek323]

I can do this, sure.

[@antonio_rdz710]

@@straighttalks-ajsrmek323 great!! Thanks AJ

[@ianchen9217]

nah I failed stats in university twice.. so Ill say quant is the hardest. FRA is not hard tbh.

[@rosmaryalgarin9292]

we need to know everything about that thanks for the advice

[@asel4968]

Hello, I am studying FRA omg I am so confused , could you please tell me how did you study for that ? , appreciate you help ☺️ level 1

[@straighttalks-ajsrmek323]

Do tons of practice questions!!

[@asel4968]

Like read and do practice questions? Thank you for your reply! ☺️ I am so stressed

[@michaeljamescollins6800]

I am a chem eng graduate who went into academia after graduating. I have 3 years experience as a lead research associate in an electrical engineering school. Academia is horrible and I want to leverage my research and technical skills in a financial research role. Any advice on career change and getting in the door so to speak?

[@straighttalks-ajsrmek323]

The CFA program can be a great way into the finance field.

[@michaeljamescollins6800]

@@straighttalks-ajsrmek323 thanks, I'm currently enrolled and studying for level 1. But I'm not sure if anyone will care until I pass level 3

[@UnappreciatedTaste]

I tend to agree

[@matthewlittler8387]

I hate the way CFA asks the econ questions. I took much more advanced econ classes during my undergrad but did the worst on the econ section for my first level 1 attempt while I did much better on ethics, FRA, equity, and PM.

[@joaquinms8891]

Finished my L2 Exam last week. I knew Derivatives was going to be No. 1

[@aryanrao3231]

want to know more about financial reporting does it require some basic knowledge prior diving into this topic for cfa

[@straighttalks-ajsrmek323]

Basic knowledge will definitely help, but it is not required.

[@62294838]

Lv2 Econ is not easy

[@gregorybattis9588]

Got it spot on with Derivatives being absolute junk.

[@wholesalingtony1588]

Struggled through some college courses, is it best to get FINRA & series licenses before taking CFA courses & CFA exam? Just to be familiar with some information & exam won't be as difficult.

[@straighttalks-ajsrmek323]

Finra licenses are good for getting investment related jobs, but not good for preparing for the CFA exams.

[@wholesalingtony1588]

@@straighttalks-ajsrmek323, I understand but isn't the material the same and of course CFA being more in depth. I only want a head start on the difficult CFA exam. Study twice, instead of once...

[@straighttalks-ajsrmek323]

@@wholesalingtony1588 Not really no. The only overlap is the options section which is a pretty big chuck of the series 7 but only a very small piece of the L1 CFA exam.

[@theurbanpandit7151]

I could learn fr&a intuitively but quant 😭

[@i123456987654]

oh yeah, bloomberg terminal is the best

[@1live2your3life]

That's completely subjective. Derivatives for me is the absolute easiest topic, but again, that's what I do for living.

[@mikesmacedo]

Sounds like a lot of minutiae

[@straighttalks-ajsrmek323]

Definitely.

[@georgemwangi2167]

Why does he sound like the guy on Casually Explained? :-/

[@mufazzalmansoorali3284]

Can you please tell me what are the chances of clearing CFA exams with an average brain ?

[@straighttalks-ajsrmek323]

Extremely low. Watch my CFA exam IQ test video.

[@HelLo-dl4ne]

12:46 hahahahaha hahahahahaha

[@Terrencetulani]

Forza ferrari