The portfolio management section contains a lot of material and much of it might never appear on the actual Level 2 test.  Consider that this is one of the most in-depth study sessions from the official curriculum, but a candidate may only see one item set (six questions).  That said much of this session’s content will resurface in Level 3.

Many of the concepts can seem abstract, so candidates are advised to review actual examples in preparation for the test.

Taking a zero on any item set is a setback, so candidates should obtain a general understanding of the material to ensure that some points will be obtained on the actual exam.

General guidance is to not get bogged down with it.  Candidates do not want to take a zero on PM, but they do not want to over-invest as it is time to start reviewing other sessions and hitting the practice exams.  Now is a good point for candidates to revisit their prep strategy and balance the amount of time left to exam day against topic strengths/weaknesses and topic weightings.

This module aligns with Study Session 18 material in the Level II CFA Program Curriculum ©.

Material:

I.          Portfolio Concepts

II.        Markowitz and Market Efficiency

III.       International Asset Pricing

IV.       Active Portfolio Management

V.        PM Process and the IPS