CFA® Program Level III exam

Key information about the CFA Program Level III exam, including structure, topic outlines, and exam tips.

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Integrate and apply

Tests how you integrate concepts and apply knowledge to real-world scenarios.

Mixed format questions

11 item sets and 11 essay sets. Both question types combine vignettes with accompanying multiple-choice items.

Two 132-minute sessions

Made up of either 6 item sets and 5 essay sets or 5 item sets and 6 essay sets.

Level III specialized pathways

Choose one of three specialized pathways – Private Wealth, Private Markets, or Portfolio Management. Candidates will have the opportunity to select the path most directly related to their interests and aspirations.

Learn about specialized pathways

How long does it take to study for the Level III exam?

The CFA® Program enables candidates to customize their preparation to match their individual needs and circumstances. Successful candidates report studying on average over 300 hours for each level of the CFA Exam.

Level III curriculum topics and weights

The curriculum is organized into topics, and each topic contains learning modules. There are learning outcome statements at the beginning of each learning module. Below you'll find current outlines.

Topic weights

Topic	Exam weight
Asset Allocation	15–20%
Portfolio Construction	15–20%
Performance Measurement	5–10%
Derivatives and Risk Management	10–15%
Ethical and Professional Standards	10–15%
Pathways (Portfolio Management or Private Markets or Private Wealth)	30–35%

2025 Level III topic outlines combined

Core curriculum topics

Asset Allocation

This topic explores capital market expectations and asset allocation approaches. You’ll learn about economic models, analysis, and approaches to economic forecasting across a range of asset classes. Challenges and limitations in forecasting are also explored. An overview of strategic and tactical asset allocation methodologies is provided along with portfolio optimization and management approaches, including mean-variance, Monte Carlo simulation, Risk Budgeting, and Liability management.

Derivatives and Risk Management

The focus of this topic is on derivative option strategies used within portfolio management. This includes option strategies, such as straddles, spreads, covered calls, protective puts, and the creation of synthetic positions. Swaps, Forwards, and Futures Strategies are also explored including the management of interest rate, currency, and equity risks, and the broader use of these derivatives in portfolio management. A section on currency details a range of derivative markets and strategies for managing and taking on currency exposure within a portfolio.

Ethical and Professional Standards

In this part of the curriculum, you’ll build the conceptual framework for understanding the basic derivatives and derivative markets. You’ll then be introduced to essential features and valuation concepts for forward commitments such as forwards, futures, swaps, and contingent claims. Finally, you’ll look at arbitrage, a critical concept that links derivative pricing to the price of the underlying asset.

Performance Measurement

Learn about approaches to evaluating portfolio performance, including benchmark selection, attribution analysis, and performance appraisal. Frameworks and a decision-making process for investment manager selection are also explored. Finally, the objective and scope of the Global Investment Performance Standards (GIPS) are covered.

Portfolio Construction

In this part of the curriculum, we cover a range of portfolio management approaches and considerations. This includes coverage of these activities within equity, fixed income, and alternative investment asset classes. Portfolio Management for private wealth investors is covered and compared with managing investments for Institutional Investors. Finally, processes and factors relevant to trading are explored. This includes cost considerations, markets, and platforms.

Portfolio Management Pathway

The Portfolio Management Pathway builds on the core content in Level III. It explores index-based equity strategies, comparing market-cap and factor-based approaches, replication techniques, and tracking errors. Active equity investing is addressed including Active Share, risk budgeting, and various management approaches. Fixed-income strategies covered include liability-driven investing, yield curve positioning, credit strategies, and the challenges of index replication. Trade strategy and execution are discussed from a portfolio manager’s perspective, focusing on execution benchmarks, automation, and regulatory aspects, and finally, a case study integrates asset allocation, derivatives, ESG considerations, and portfolio management techniques.

Private Markets Pathway

The Private Markets Pathway builds on the core content in Level III. Private and public markets are compared and types of investment structures, costs, and performance metrics detailed. The role and activities of the general partner are explored. Private equity strategies, including venture capital, growth equity, and buyouts, are conveyed, alongside valuation methods and debt financing options such as leveraged loans, mezzanine, and unitranche debt. Special situations, including distressed debt and unique investment strategies, are analyzed. Finally, private real estate and infrastructure investments are discussed, highlighting valuation processes, economic drivers, and their roles in strategic asset allocation.

Private Wealth Pathway

The Private Wealth Pathway builds on the core content in Level III. It explores the private wealth management industry, covering business models, fee structures, regulatory principles, and the role of advisers. Family dynamics and strategies for profiling and advising ultra-high-net-worth individuals are detailed, along with goals-based financial planning approaches focused on managing lifetime financial exposures, tax impacts, and liquidity strategies. A section on investment planning addresses portfolio allocation within legal, tax, and jurisdictional contexts. Also explored are risk mitigation strategies, including financial and insurance products, to protect against inflation and globalization risks. Finally, a section on wealth transfer planning emphasizes strategies for controlled intergenerational transfers, charitable bequests, and addressing complex client needs.

Curriculum errata

Find the latest updates and corrections to the curriculum. You can also submit suspected errors for review to ensure the most accurate and up-to-date content.

See curriculum errata

Level III exam format

Exam structure

The Level III exam consists of item sets and constructed response (essay) sets. Both question types combine vignettes with accompanying multiple-choice items for item sets and constructed response items for essay sets.

All questions must be answered based on the information in the vignette. Hence, the items are not free-standing, as in the CFA Level I exam. You'll need to refer to the vignette before answering each item.

Each session will have either 6 item sets and 5 essay sets or 5 item sets and 6 essay sets. This mixed distribution of item types across the two exam sessions creates a more balanced delivery of questions throughout the exam. Overall, the Level III exam contains 11 item sets and 11 essay sets for 12 points each. Twenty of these question sets are scored, and two (one item set and one essay set) are being trialed and will not be scored.

The CFA Program curriculum topic areas for Level III will be randomly placed on the exam. All topics may be covered in either the first or second sessions, and possibly both sessions. Each vignette will begin with a statement of the topic and the total point value, which is always 12 points.

EXAMPLE

TOPIC: ASSET ALLOCATION
TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS

Exam duration

The Level III exam will be 4 hours and 24 minutes, split into two equal sessions of 2 hours and 12 minutes, with an optional break in-between.

Constructed response (essay) format

Essay questions:

In the question stem, command words used will be bolded.
A text box is available for the response.
If more than one answer is requested, (for example, “Explain, with two reasons…”), the following note is included: “Note: Each explanation should be in a separate paragraph”.
Bullet points are acceptable, as well. An important message to note – when asked to provide more than one response, the responses will be evaluated up to the number requested, and in the order presented by the candidate. Anything more than the number requested will not be evaluated.

Calculation responses in essay questions:

An essay text box will accept typed words and numbers. Note that a correct numerical value typed in the essay box by itself receives full credit – formulas and explanations are not required to earn full credit. However, if a candidate chooses to describe steps used in the calculation or show values using either a math editor function or typing out variables in an equation, they may be able to earn partial credit.
A multiple-choice question format may occasionally be used in the essay portion of the exam and it is possible that there may be more or less than 3 answer choices. (See examples 1 and 2 below).

Important information about essay question structure

Each essay set will have a variable number of items, with each item worth a variable number of points. Points per item are not disclosed.

There may be multiple questions within one essay item. It is important to understand how many answers a candidate is expected to provide. Three examples are presented:

EXAMPLE 1

Determine which bond best meets the advisor’s objective.

(Bond X, Bond Y, Bond Z)

Justify your response.

For this question, a candidate is expected to type two answers in the response box: the name of the bond that best meets the objective, and a reason why it best meets the objective.

EXAMPLE 2

Determine, based on the client’s IPS, the most appropriate index to use as a benchmark.

(Index 1, Index 2, Index 3)

Explain why each of the other two indices is less appropriate.

Note: Each explanation should be in a separate paragraph.

For this question, a candidate is expected to type three answers in the response box: the name of the index that is most appropriate, and reasons why each of the two not selected is less appropriate.

EXAMPLE 3

Discuss one weakness in the risk management process for each of the following:

i. Company A
ii. Company B

Note: Each discussion should be in a separate paragraph.

For this question, a candidate is expected to type two answers in the response box: a discussion of the weakness for Company A and a separate discussion of the weakness for Company B.

Item set format

Each item set on the Level III exam consists of a vignette followed by 4 multiple-choice questions. The 44 multiple choice items are each worth 3 points.

Item set vignettes will begin with a statement of the topic and total point value, for example:

TOPIC: PORTFOLIO CONSTRUCTION
TOTAL POINT VALUE OF THIS QUESTION SET IS 12 POINTS

Examples of level III item set questions (PDF)

Level III exam tips

Here are some practical tips to help you perform your best on the CFA Level III exam.

No penalty for guessing: There is no penalty for incorrect answers, so be sure to answer every question
Know your calculator: Make sure you know how to use the calculator features needed to solve the formulas and examples shown in the curriculum. Familiarity with your calculator will save valuable time during the exam
Dress for comfort: There’s no official dress code, but dressing in layers will allow you to adjust to the room temperature and remain comfortable during the exam
Exam hardware and software: Make sure you’re aware of how hardware and software at test centers might affect your experience
Practice, practice, practice: Take a mock exam in the Learning Ecosystem to practice answering exam questions
Proctor assistance: During the normal course of the exam, candidates may find they need assistance from proctors. Proctors will come to workstations as quickly as possible to assist. If able, we encourage candidates to continue working on their exam until a proctor has assisted. Our exam writers have designed the exam to account for minor disruptions or pauses in order for candidates to still have adequate time to respond to all questions

Practical Skills Modules (PSM) requirement

In addition to completing the exam, you must complete one PSM at each level in order to receive your exam result (beginning February 2025 for Level III candidates). The same module cannot be completed at multiple levels. For example, if you complete the Python Programming Fundamentals module at Level I, you must complete a different module (Python, Data Science & AI or Analyst Skills) to meet the PSM requirement at Level II. Learn more about PSM's and see the PSM Policy for more details.

How practice analysis keeps the CFA exam relevant

The CFA Program curriculum and exams are shaped by our practice analysis process, which gathers insights from top industry professionals to ensure that the content reflects current investment practices. This process directly influences the Candidate Body of Knowledge (CBOK), which outlines the essential competencies for success in the investment profession.

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