CFA Level 2 Exam – 21 Week Study Plan, Part 3 of 6

Introductory Remarks and General Guidelines – see part 1

Upto week 5 - see part 2

Week 6 – Financial Statements, Part 3; Progress Test 1

Financial Statements – This is the “synthesis” of financial statement analysis. You will be tying together FSA material from L1 and L2 within the broader scope of evaluating companies. Be prepared to make adjustments to financial statements based on footnote data. Like the other FSA sections, this one is mission critical.

Progress Test 1 – Take a progress test at this point, covering weeks 1 – 6: Ethics, Quant, Econ, and FSA. If you do not have a Stalla or Schweser test bank, then build a progress test with the CFAI materials. You could do 2 Ethics item sets, 1 Quant item set, 1 Econ item set, and 4 FSA item sets. Do your best to replicate exam conditions, particularly with time limits.

Since this will be your first test, do not get too concerned about the score. I recommend noting questions that you are unsure about. When you grade the test, check to see if your instincts were correct or not. For any questions you get wrong, write down why you got them wrong in your notebook. This reduces your odds of repeating the mistake.

Week 7 – Corporate Finance, Part 1

This is one of your middle tier subjects (higher than Quant or Econ, but below Financial Statements and Equity). In my opinion, it is an easy place to rack up points.

You will see: methods of analyzing capital projects, issues in capital investment analysis, operating and financial leverage, theories on capital structure, and dividend policy issues.

Week 8 – Corporate Finance, Part 2

This is a fairly small section. You will look at corporate governance and M&A issues. Either could form part or all of an item set.

Given the light reading in week 8, I recommend hitting extra practice problems from prior weeks on top of the Corporate Finance part 2 material. This will help keep older stuff somewhat fresh.

Week 9 – Equity, Part 1

This is the start of another heavy-weight. Equity is likely 15-25% of the exam.

If you feel like the sequence for Equity is a bit random, I would tend to agree with that. Feel free to rearrange in any manner that suits your learning needs.

In 2009, I started with alpha, methods of determining the required equity return, and introductory issues in international equities. Plenty more to come on Equity in the next two weeks.