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Item Sets Define the Level II Exam

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CFA Exam Prep

Multiple choice questions are used to test knowledge on both the Level I and II exams, but there is a significant difference in the formats of the two exams. The Level I exam is an onslaught of multiple choice questions grouped by subject, but not tied to another question in any way. Level II, on the other hand, groups questions in "item sets". This difference in exam format changes the way candidates need to prepare for the exam.

Item sets contain a vignette of information from which 6 multiple choice questions are asked. There are 20 item sets on the exam (10 in the morning and 10 in the afternoon), for a total of 120 questions—half the number of questions on the Level I exam. Accordingly, Level II candidates receive more time per question than their Level I counterparts. At first glance it would seem that having twice as much time per question is a bonus, but there is no such thing as a free lunch. Despite the doubling of time per question, you need to factor in the increased amount of reading required in this exam. Time management becomes a more critical issue because you need to be good at two additional skills, reading speed and reading comprehension.


Based on a quick look at Wikipedia1, an average native English-speaking adult reads about 200 to 250 words per minute for analytical reading. The chart below shows word counts from a 2009 Level II mock exam's vignettes and calculates how long the average adult would take to read the vignettes.

CFA Level 2 Mock Exam – Morning Session (2009)

Item Set Subject Word Count Time 200 wpm Time 250 wpm
1 Ethics
629 3.1
2 Quantitative Methods 286 1.4 1.1
3 FSA 417 2.1 1.7
4 FSA 322 1.6 1.3
5 Corporate Finance 441 2.2 1.8
6 Economics 513 2.6 2.1
7 Equity 574 2.9 2.3
8 Fixed Income 450 2.3 1.8
9 Derivatives
612 3.1 2.5
10 Portfolio Management 294 1.5 1.2
Total* 4,538 22.8 18.3
(Word counts include numbers)

That means that out of a three-hour exam, between 18 and 23 minutes, or about 10-13%, is spent just reading. And that assumes full comprehension the first time through. If you have any difficulty reading or if English is not your first language, then you could be spending significantly more time than this. Therefore, improving reading speed is a key factor in being successful on this exam.


You not only need to be able to read quickly, but you also need to understand what you read. The vignettes will not try to trick or deceive you, but their structure makes it very easy to miss a relevant piece of information.



•    Read the questions first—know what you are being asked. Then read the vignette and find the facts required to answer the questions. Otherwise you will end up reading the scenarios and questions multiple times—and that eats into valuable ‘question-answering’ time.

•    Take practice exams and time how long it takes you to complete each item set. Are there certain topic areas that take you longer to complete than others? This is good information to know so you can strategize on how to tackle the exam. [So you don’t have to stop and record completion times after finishing each item set, it may be helpful to record a video of yourself taking the exam so you can determine completion times later.]

•    Practicing item sets will help you become accustomed to the way that pertinent information for certain styles of questions will be embedded into the vignette. The more familiar you are with the patterns of questions, the less you will have to adapt on the day of the test.

•    Commit the key word definitions to memory. When you know what to look for, the text of the vignette can jump out at you.

More on tackling item sets next month!


*Totals may be slightly different because of rounding.

–Linda Lam

Linda Lam has worked with a candidate review program since 2000.

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Thank you very much Linda

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