# Chartered Financial Analyst (CFA): Definition and Exams

> **Definition**
>
> A chartered financial analyst (CFA) is a globally recognized designation awarded by the CFA Institute to professionals who have demonstrated a high level of knowledge in the investment field.

## What Is a Chartered Financial Analyst (CFA)?

The chartered financial analyst (CFA) charter is a professional designation offered by the [CFA Institute](https://www.investopedia.com/terms/c/cfainstitute.asp), an organization that measures and certifies the competence and integrity of financial analysts. Candidates must pass three levels of exams covering accounting, economics, ethics, money management, and security analysis.

From 1963 through May 2025, more than 3.9 million candidates had taken the CFA exam. The overall pass rate was 45%. From 2016 through 2025, the 10-year average pass rate was 43%.

### Key Takeaways

*   Candidates must have a bachelor’s degree and at least 4,000 hours of relevant professional experience over a minimum of three years.
*   Passing the CFA Program exams requires strong discipline and an extensive amount of studying.
*   There are more than 200,000 CFA charter holders worldwide in 164 countries.

![Chartered Financial Analyst (CFA): The gold standard in the field of investment analysis.](https://www.investopedia.com/thmb/M1zUXuE1z8Z4-patsSskOk-25Nc=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/cfa.asp-final-93e4ce833657472c9e1924243f782195.png)

*It takes, on average, about four years for an individual to earn the CFA designation. — Julie Bang / Investopedia*

## The Basics of Becoming a Chartered Financial Analyst (CFA)

The CFA charter is one of the most respected designations in finance and is widely considered to be the gold standard in the field of investment analysis.

The designation is handed out by the CFA Institute, which is a global nonprofit professional organization of more than 200,000 charter holders, [portfolio managers](https://www.investopedia.com/articles/financial-advisors/121515/portfolio-manager-career-path-qualifications.asp), and other financial professionals in 164 countries and 160 local member societies.

The CFA’s meaning concerns the stated mission of the CFA Institute, which is to develop and promote a high level of educational, ethical, and professional standards in the investment industry.

### Requirements

Before becoming a CFA charter holder, a candidate must meet one of the following educational requirements:

*   The candidate must have four years of professional work experience, a bachelor’s degree, or be in the final year of a bachelor’s degree program.
*   Or they must have 4,000 hours of work experience over a minimum of three years.
*   For the undergraduate qualification, the bachelor’s program must be completed before registering for the Level III exam.
*   In addition to the educational requirement, the candidate must have an international passport, complete the assessment in English, meet the professional conduct admission criteria, and live in a participating country.

After meeting the enrollment requirements, the candidate must pass all three levels of the CFA Program in sequential order. Professional reference letters are also required. The candidate must then become a member of the CFA Institute and pay annual dues.

Finally, they must sign off annually that they are following the CFA Institute [code of ethics](https://www.investopedia.com/terms/c/code-of-ethics.asp) and standards of professional conduct. Failure to adhere to the code of ethics and standards is grounds for the possible lifetime revocation of the CFA charter.

## Exams

Passing the CFA Program exams requires strong discipline and an extensive amount of studying. The Level I exam can be taken four times a year, in February, May, August, and November. The Level II exam can be taken three times a year, in May, August, and November. The Level III exam can be taken twice a year, in February and August.

Although the exams can be taken as many times as needed, each exam typically requires candidates to study over 300 hours. Given the considerable amount of time that must be spent studying, many candidates are deterred from continuing the CFA Program after failing one of the levels.

The exams are difficult. Only 45% of candidates passed the exams from 1963 to 2025. Having the right plan and the discipline to follow the plan are essential skills for passing all three exams. Notably, 2019 saw the most test takers of any year. But numbers have not rebounded from the sharp decline seen during the COVID-19 pandemic.

The CFA Institute has over 400 test centers worldwide. It has been adding testing locations in Asia due to increased demand in that region.

> **Important**
>
> The pass rate for the exam is below 50% in recent decades, making the CFA charter one of the most difficult financial certifications to obtain. A minimum of 300 hours of study is recommended for each exam.

### Level I Exam

The CFA Level I examination focuses on financial analysis using the tools of the 10 topic areas of the candidate’s [body of knowledge](https://www.investopedia.com/terms/b/body-of-knowledge.asp).

These areas are ethical and professional standards, quantitative methods, economics, financial statement and analysis, corporate finance, equity investments, fixed income, [derivatives](https://www.investopedia.com/articles/optioninvestor/10/derivatives-101.asp), alternative investments, and portfolio management. The exam format is 180 multiple-choice questions to be completed within four and a half hours.  

![Level I exam topics](https://www.investopedia.com/thmb/lGh1SuqC87acGYaFr2PljGW9mu4=/640x0/filters:no_upscale():max_bytes(150000):strip_icc()/cfa1examweight-5c1c342f46e0fb00015c8e48.jpg)

*CFA Level I Exam Topic Weights.*

### Level II Exam

The Level II exam focuses on the valuation of various assets and emphasizes the application of investment tools and concepts in contextual situations.

Exam questions referring to Financial Reporting and Analysis are typically based on [International Financial Reporting Standards (IFRS)](https://www.investopedia.com/terms/i/ifrs.asp). The exam has 22 item sets (mini case studies) with 88 multiple-choice questions (110 questions total).

![Level II exam topics](https://www.investopedia.com/thmb/4C9foYKTAxlAJwep61Y0KTOBYP8=/640x0/filters:no_upscale():max_bytes(150000):strip_icc()/cfa2examweight-5c1c346ac9e77c00018bdeed.jpg)

*CFA Level II Exam Topic Weights.*

### Level III Exam

The Level III exam focuses on effective wealth planning and portfolio management. It requires the candidate to synthesize all the concepts and analytical methods learned from the entire curriculum.

The exam format is multipart, with 11 item sets and 11 essay questions to be completed within four hours and 24 minutes. The handwritten answers are graded by hand.

![Level III exam topics](https://www.investopedia.com/thmb/mVuqkZQN95jdrrwBsYXAB738tKQ=/640x0/filters:no_upscale():max_bytes(150000):strip_icc()/cfa3examweight-5c1c3480c9e77c00015bd519.jpg)

*CFA Level III Exam Topic Weights.*

### Pass Rates

For the 10 years of 2016 through 2025:

*   **Level I**: 41%
*   **Level II**: 46%
*   **Level III**: 51%

## Challenges of Achieving the CFA Charter

The CFA charter is widely respected, globally recognized, and a worthwhile undertaking to accomplish. However, it is not a guaranteed path to riches and glory. So, before taking the plunge, carefully consider how difficult it can be to earn one.

1\. The CFA is not a quick fix for an ailing career. If that’s why you’re enrolling in the program, you should carefully consider the work involved in the CFA path ahead of you. You might instead choose to improve your [soft skills](https://www.investopedia.com/terms/s/soft-skills.asp), such as your work ethic and communication capability.

2\. The CFA requires a huge investment of time—a recommended minimum of 300 hours of studying per exam for three exams. If you don’t pass an exam the first time, you’ll have to reapply your efforts. You will likely sacrifice time with family, friends, and the hobbies that you enjoy. And after committing all that time, there is no guarantee that you will earn the charter.

3\. While cost may not be a major consideration, it is worth careful deliberation. A Level I candidate pays a one-time program enrollment fee plus an exam registration fee. Level II and III candidates pay a registration fee as well. There is also the cost of the books and study programs you’ll need. Altogether, you should expect to spend several thousand dollars each time you attempt the exams.

## How Long Does It Take to Pass the CFA Exams?

The CFA exams are difficult and have a high failure rate. Each exam requires at least 300 hours of study, on average. Successful candidates take an average of more than four years to earn the designation.

## How Much Do the CFA Exams Cost?

Each of the three levels of the CFA exam costs $1,290 (which is reduced to $990 if you register early). In addition, there is a one-time enrollment fee of $350. With early enrollment, you would end up paying a total of $3,320. With regular enrollment, the total cost is $4,220.

## Are the CFA Exams Multiple-Choice?

The CFA Level I exam is entirely multiple-choice, with 180 questions. The Level II exam consists of 22 item sets and 88 multiple-choice questions. Level III consists of 11 constructed response (essay) questions and 11 item sets. Constructed response items typically have several parts related to a case study that describes one or a series of investment challenges.

## Are CFA Charter Holders Paid More?

Industry reports indicate that CFA charter holders are paid more than those who have not completed the program. According to test prep provider 300Hours, a CFA charter holder earns, on average, 57% more than a Level I candidate when controlling for years of work experience.

## The Bottom Line

The financial designation of CFA is respected worldwide. It can be a highly valuable achievement for those willing and able to devote the time, effort, and money to meeting its requirements, which include studying for and passing three difficult exams.

> **Article Sources**
>
> 1.  CFA Institute. “[1963–2025 Candidate Examination Results](https://www.cfainstitute.org/sites/default/files/docs/programs/cfa-program/candidate-resources/1963-current-candidate-examination-results.pdf).”
>     
> 2.  CFA Institute. “[Annual Report Fiscal Year 2024](https://www.cfainstitute.org/sites/default/files/docs/about/governance/cfa_annual-report-2024_final_03-05-25_w-financials.pdf).”
>     
> 3.  CFA Institute. “[CFA® Program: How to Become a CFA Charterholder](https://www.cfainstitute.org/en/programs/cfa/charter).”
>     
> 4.  CFA Institute. “[CFA Program Exam Schedule](https://www.cfainstitute.org/-/media/documents/support/programs/cfa/2024CFA-Program-Exam-Schedule.pdf).”
>     
> 5.  CFA Institute. “[CFA® Program Exam Information](https://www.cfainstitute.org/programs/cfa-program/exam).”
>     
> 6.  CFA Institute. “[CFA® Program Test Centers: CFA Program Test Center Locations](https://www.cfainstitute.org/programs/cfa-program/test-center-locations).”
>     
> 7.  CFA Institute. “[CFA® Program Level I Exam](https://www.cfainstitute.org/programs/cfa-program/candidate-resources/level-i-exam).”
>     
> 8.  CFA Institute. “[CFA® Program Level II Exam](https://www.cfainstitute.org/programs/cfa-program/candidate-resources/level-ii-exam).”
>     
> 9.  CFA Institute. “[CFA® Program Level III Exam](https://www.cfainstitute.org/programs/cfa-program/candidate-resources/level-iii-exam).”
>     
> 10.  CFA Institute. “[CFA® Charter](https://www.cfainstitute.org/-/media/documents/factsheet/cbt-cfa-charter-factsheet.pdf).”
>      
> 11.  CFA Institute. “[CFA® Program: CFA Exam Dates and Fees](https://www.cfainstitute.org/programs/cfa-program/dates-fees).”
>      
> 12.  300Hours. “[CFA Salary: How Much Does a CFA Charter Increase Your Pay By?](https://300hours.com/cfa-salary-increase/#1-having-a-cfa-charter-increases-average-salary-by-53)”