The CFA Level III exam is the last in the series of three exams conducted by the CFA Institute. Coupled with at least 36 months of relevant work experience, successful completion of the final level yields a charter membership.

While the first two levels revolved around basic financial knowledge, investment valuation comprehension, and the application of both, the CFA Level III exam focuses on 澳洲幸运5官方开奖结果体彩网:portfolio management and wealth planning.

Exam Structure

The format of the exam, which is offered in February and August of 2024 and 2025, is a mix of item set questions (similar to Level II) and essay type questions. Like the other exams, the Level III exam is conducted in two sessions.

Each session lasts for 2 hours and 12 minutes, with a combination of multiple-choice question sets and essay sets. Altogether there are 11 question sets and 11 essay sets, with each set worth 12 points.

Starting in 2025, the institute will introduce two specialized pathways: private markets and private wealth. CFA candidates will choose their preferred pathway at registration. 65-70% of their exam material will relate to the shared core material, while around a third will relate to their chosen pathway.

Exam Curriculum

As mentioned earlier, the focus of the exam is on portfolio management and wealth planning, but it also covers seven topics that are grouped into two other areas, namely, Ethical and Professional Standards and Asset Classes. The following table provides weighting of these topics and broad areas for the exam:

As is evident from the table, the Ethics and Professional Standards gets as much importance as in the othe꧟r levels of the exam. The investment tools are not tested separately, except economics, which is a part of the portfolio management and wealth planning section for level III.

The majority of the exam revolves around portfolio management and asset classes in the portfolio context.

Standards

In level III, ethical and professional standards primarily consist of the Code of Ethics and 澳洲幸运5官方开奖结果体彩网:Global Investment Performance Staꦇndards (GIPS). Standards account for 10-15%. The Code of Ethics section will mo🐬st likely be an item set in the second session. However, GIPS could be tested either as an esꦅsay question in the first session or as an item set in the second session.

Asset Classes

The exam tests your knowledge on all of the major asset classes, including alternative investments, derivatives, equity investments, and fixed-income investments. However, the focus is now on the portfolio management aspects of these investments.

For example, around 15-20% of the exam is dedicated to fixed-income portfolios, covering investment objectives, benchmarking, return analysis, portfolio 澳洲幸运5官方开奖结果体彩网:immunization strategies, relative value analysis, and so on. T🎶he syllabus also covers strategies used in international and emerging markets and how derivatives are used to manage interest rate and credit risks in fixed-income portfolios.

The second asset class is equity securities, which are an essential component of most investment portfolios and crucial for the portfolio's success. The discussion here surrounds equity investment strategies, evaluation of equity fund managers, and equity indexes. The syllabus also discusses the corporate governance issues related to conflicts between managers and shareholders that erode value and have a direct impact on equity 澳洲幸运5官方开奖结果体彩网:portfolio managers. Finally, there is a discussion on measurin꧋g and managing portfolios in international and emerging markets.

The section on alternative investments primarily discusses the alternative investment classes and how♋ derivative instruments such as swaps, futures, and forwards are used to manage some alternative investm🦹ents.

Portfolio Management and Wealth Planning

This comprises the largest portion of the exam and will account for 35-40% of the 264 possible points. The syllabus is very comprehensive and introduces new concepts such as behavioral finance, which forms the basis for financial decision making. 澳洲幸运5官方开奖结果体彩网:Risk management concepts, covering tools and techniques for me🅷asuring and managing risk are also discussed. Apart from these, you are likely🔯 to be tested on questions related to individual and institutional wealth.

The number of concepts that can be tested are limited but are important. One such important concept is the Investment Policy Statement and its components, which is highly testable. Economics, which was a part of the iꩵnvestment tools in Level I and II, is included under portfolio management in the exam. Other important concepts are managing portfolios of institutional investors, asset allocation, risk management applications, and evaluating portfolio performance.

Within the portfolio management section, the CFA Institute provides no hints about which topics are more important. However, it does make available , which can be very useful for practicing and developing your exam strategy.

Exam Details

Time Limit: 4 hours and 24 minutes
Cost: $990 to $1,290
Number of Questions: 44 multi-part essay/structured response
Passing Score: Varies Annually
Passing Rates: 49% (as of February 2024)
Format: Item Sets and Essay Questions
Prerequisites: Passing grade on CFA Levels I & II exam, and a U.S. Bachelor's degree or equivalent.
Corequisites: In order to receive your designation as a CFA charter holder upon successful completion of level 3, you are required to have at least 36 months of experience in a related field.
Exam Date(s): February and August
Exam Results: Usually provided within five to eight weeks.
Official Exam Website: 

The Bottom Line

The Level III exam is considered one of the tougher exams for the CFA, as many of the questions🍒 are posed in essay format.

The key toꦦ success is to practice as many essay type qu🐼estions as possible and master topics specifically related to portfolio management, which is at the heart of this exam.