The Importance of Ethics and Professional Standards for Passing the CFA Level 2 Exam

As an expert in the field of finance and a successful CFA level 3 candidate, I cannot stress enough the importance of understanding ethics and professional standards for passing the CFA level 2 exam. Regardless of which CFA level candidate you are, it is crucial to prioritize ethics in your study plan. In fact, I always save ethics as the last topic to study before the exam, and dedicate a couple of days solely to reviewing it. This strategy has worked for me so far, and I believe it can work for anyone. The key assumption here is that you stick to your CFA curriculum and allocate enough time to cover this important topic.

This is because the information you learn at level 1 will still be applicable to the questions at level 3.Ethics accounts for 10-15% of the weight in CFA level 3 exams, and is tested through both essay and multiple-choice questions. From personal experience, I can attest to the fact that neglecting ethics can have serious consequences. In my case, my low score in ethics was the reason I failed the exam by just one point below the minimum passing score (MPS). This goes to show just how crucial it is to understand and apply ethical principles in the CFA program. The CFA Institute places great emphasis on ethics and professional standards, as they are essential for maintaining the integrity of its members, designations, and exam programs. As a candidate for the CFA Program or the CIPM Program, or as a member of the CFA Institute, it is mandatory to adhere to the Code of Ethics and Standards of Professional Conduct (Code and Standards).If you are new to the CFA exams or an experienced CFA level 3 candidate, the ethics section is a critical component at all levels of the program.

Therefore, it is important to not only understand the theory behind ethical principles, but also to be able to apply them in real-life scenarios. If you have previously failed the CFA level 2 exam, like I did, and are looking for ways to improve your score in ethics, here are some tips that may help:

  • Consult the notes in the CFA curriculum to gain a better understanding of the theory behind ethical principles.
  • Re-read certain sections to further consolidate your knowledge of CFA ethics.
  • Pay special attention to the new section on the Code of Professional Conduct for Asset Managers and the increased focus on the Global Investment Performance Standards (GIPS) in CFA ethics level 3.
It is also important to note that when it comes to CFA ethics, attention to detail is key. This is especially true for level 2 and level 3 candidates. Make sure to carefully read the question bullets when practicing with examples and questions from the end-of-chapter (EOC) material.

Serena Lubahn
Serena Lubahn

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