CFA Level 2 Curriculum Changes 2022

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Each year, CFA Institute makes some changes to the exam curriculum. This year, there have been some updates throughout the CFA Level 2 curriculum. Well, here we will share information about CFA Level 2 Curriculum changes 2022.

CFA Level 2 Curriculum Changes 2022

In short, CFA Level 2 curriculum experienced a light update this year.

Here are some changes of the CFA Level 2 Curriculum:

  • In CFA Level 2 curriculum 2022, Machine Learning has been updated to apply some data cases to investment issues.
  • A reading “new Backtesting & Simulation” provides an accessible introduction to explain how those tools are utilized in evaluating investment strategies and to compare their strengths and weaknesses.
  • In CFA Level 2 curriculum 2022, Corporate Finance is renamed as Corporate Issuers. It focuses on understanding the motivations, interactions, and impacts on the investors of securities issued by corporations. Corporate Issuers brings together foundation areas like economics and financial statement analysis to give a starting point for equity and fixed income valuation.
  • In CFA Level 2 curriculum 2022, fixed Income readings were revised across all levels to set for ease of reading and consistency.
  • The Alternative Investments readings in CFA Level 2 curriculum 2022 have been updated to include a single reading on Real Estate and revisions to Private Equity.

Apparently, there are 47 readings in CFA Level 2 Curriculum 2022.

3 readings from 2020/2021 were deleted/removed:

  • Reading 9: Excerpt from Probabilistic Approaches
  • Reading 22: Corporate Governance & Other ESG Considerations in Investment Analysis
  • Reading 40: Publicly Traded Real Estate Securities

2 new readings were added in CFA Level 2 Curriculum 2022:

  • Reading 17: ESG (Environmental, Social, and Governance) Considerations in Investment Analysis
  • Reading 41: Backtesting and Simulation

14 readings were updated in CFA Level 2 Curriculum 2022, mostly minor changes, except R33: Pricing & Valuation of Forward Commitments (Derivatives), R18 Mergers and Acquisitions (Corporate Issuers) and R35 Real Estate Investments. Overall, the CFA Level 2 curriculum 2022 experienced some small updates, with only Derivatives, Corporate Issuers and Alternative Investments experiencing notable changes in some readings.

CFA Level 2 Topic Weights 2022

Just like CFA Level 1 curriculum, there are no changes to CFA level 2 topic weights 2022 compared to CFA level 2 topic weights 2021. This is as expected given the historical trends of reducing the variability in topic weight across the ten topics, with a maximum range difference of 5 percent per topic. Based on 2 CFA level 2 topic weights 2022, it is even possible for the ten topics to be tested evenly at 10% weighting each for CFA Level 2. These changes may have been done to discourage candidates from purely only focusing on the (previously) big five topics of Level 2 (FRA, Corporate Finance, Equity Investments, Fixed Income and Derivatives).

CFA Level 2 Topic Weights (Changes vs. Previous Years)

Topics / Weight 2018 2019 2020 2021 2022
Quant Methods 5-10% 5-10% 5-10% 5-10% 5-10%
Economics 5-10% 5-10% 5-10% 5-10% 5-10%
FRA 15-20% 10-15% 10-15% 10-15% 10-15%
Corp Fin / Issuers 5-15% 5-10% 5-10% 5-10% 5-10%
Equity 15-25% 10-15% 10-15% 10-15% 10-15%
Fixed Income 10-20% 10-15% 10-15% 10-15% 10-15%
Derivatives 5-15% 5-10% 5-10% 5-10% 5-10%
Alt. Investments 5-10% 5-10% 5-10% 5-10% 5-10%
Portfolio Mgmt. 5-10% 5-15% 5-15% 10-15% 10-15%
Ethics 10-15% 10-15% 10-15% 10-15% 10-15%

Why Are CFA Curriculum Changes and Topic Weights Important?

Topic weights are key to CFA study plans. It will guide the candidates on the importance of each topic for the exams. Knowing the curriculum changes are useful in certain circumstances, for example:

  • The candidates who have yet to register for the 2022 exam, but want to get a head start on reading existing 2020/2021 materials. They need to ensure that what they are studying now will be part of the updated curriculum;
  • The candidates who are interested in getting previous year versions of third party study materials for the next exam.
  • The candidates who failed a current year exam, and are planning to retake in 6-12 months’ time.

Conclusion – Level II CFA Curriculum and Weight Changes

The CFA Level II curriculum received some major updates in 2022. And the topic weight area has been adjusted in 2022.  Below we break down the CFA curriculum, reading, and weight changes for the CFA Level II Exam 2022.

2022 CFA Level 2 Curriculum Changes Highlights

  • There are 47 readings in the CFA Level 2 curriculum 2022.
  • CFA Level II contains 441 Learning Outcome Statements.
  • Portfolio Management exam topic weight got a change from 5–15% to 10–15%.
  • Ethical and Professional Standards in the CFA Level 2 curriculum 2022has been moved to the end of the curriculum rather than the beginning; now it is Study Session 17.
  • The “Financial Reporting and Analysis” topic in the CFA Level 2 curriculum 2022 is now called “Financial Statement Analysis”.
  • The “Corporate Finance” topic in the CFA Level 2 curriculum 2022 has been renamed “Corporate Issuers”.
  • Command words were changed throughout the CFA Level 2 curriculum. (Most “distinguish” becomes “compare” or “contrast.” Many “describe” become “explain” or “discuss.”
  • Short references to ESG (Environmental, Social, and Governance) Considerations in the CFA Level 2 curriculum 2022 have been added throughout the curriculum.

2022 CFA Level II Reading Changes

Apparently, there is an entirely new 2022 CFA Level 2 reading:

  • R41: Backtesting and Simulation

Four CFA Level 2 readings were substantially rewritten for 2022 CFA Level 2, which are being treated as new:

  • R1: Introduction to Linear Regression
  • R33: Pricing & Valuation of Forward Commitments
  • R35: Real Estate Investments
  • R36: Private Equity Investments

Many readings within the CFA Level 2 curriculum contain material changes for 2022:

  • R7: Economic Growth
  • R15: Capital Structure
  • R18: Mergers and Acquisitions
  • R19: Capital Budgeting
  • R21: Return Concepts
  • R23: Discounted Dividend Valuation
  • R27: Private Company Valuation
  • R28: The Term Structure & Interest Rate Dynamics
  • R29: The Arbitrage-Free Valuation Framework
  • R42: Economics and Investment Markets

Two CFA Level 2 readings were deleted/removed:

  • R9: Excerpt from “Probabilistic Approaches: Scenario Analysis, Decision Trees and Simulations”
  • R40: Publicly Traded Real Estate Securities

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