Cfa: Level 2 Mock Questions

Item Set 1

Item Set 2

Item Set 3

Introduction

The Chartered Financial Analyst (CFA) Level 2 exam is a crucial step towards becoming a CFA charterholder. The exam tests a candidate's knowledge of advanced investment analysis and portfolio management concepts. To help candidates prepare, we have compiled a set of mock questions that simulate the actual exam experience. This report provides a comprehensive set of mock questions, answers, and explanations to help candidates assess their knowledge and identify areas for improvement.

Mock Questions

Section 1: Ethics and Professional Standards (10 questions)

Answer: B

Explanation: The CFA Institute Code of Ethics and Standards of Professional Conduct requires CFA charterholders to act with integrity, competence, diligence, and respect the rights of others.

Answer: C

Explanation: A CFA charterholder should not provide investment advice on a security that they have not analyzed or do not have sufficient information about.

... (8 more questions)

Section 2: Quantitative Methods (15 questions)

Answer: A

Explanation: The Sharpe ratio measures the portfolio's return in excess of the risk-free rate, per unit of total risk (standard deviation).

β = 1.2 R-squared = 0.4 σ(e) = 10%

Which of the following statements about the stock is most accurate? A. The stock has a high level of systematic risk. B. The stock has a high level of unsystematic risk. C. The stock's returns are not closely related to the market returns. cfa level 2 mock questions

Answer: B

Explanation: The high value of σ(e) indicates that the stock has a high level of unsystematic risk.

... (13 more questions)

Section 3: Corporate Finance (10 questions)

Answer: A

Explanation: WACC = (0.5/1.5) × 8% + (1/1.5) × 12% = 9.6%

Answer: A

Explanation: Payback period = $100,000 / $30,000 = 3.33 years

... (8 more questions)

Section 4: Equity Investments (15 questions)

Answer: A

Explanation: A 2-for-1 stock split will double the number of shares outstanding to 20 million, and the new stock price will be $50 / 2 = $25.

Answer: A

Explanation: The information ratio is a metric that measures the portfolio's excess return relative to a benchmark, per unit of active risk.

... (13 more questions)

Section 5: Fixed Income Investments (10 questions) Item Set 1

Answer: A

Explanation: Using a financial calculator or present value tables, the bond's price can be calculated as $904.87.

Answer: A

Explanation: The credit spread is a metric that measures the difference in yield between a corporate bond and a comparable Treasury bond, and is a useful indicator of the bond's credit risk.

... (8 more questions)

Section 6: Alternative Investments (5 questions)

Answer: A

Explanation: The IRR (internal rate of return) is a metric that measures the rate of return of a private equity investment, and is commonly used to evaluate the performance of private equity portfolios.

Answer: A

Explanation: REITs are required to distribute at least 75% of their net income to shareholders, and are pass-through entities for tax purposes.

... (3 more questions)

Conclusion

This report provides a comprehensive set of mock questions, answers, and explanations to help CFA Level 2 candidates assess their knowledge and identify areas for improvement. The questions cover all six sections of the CFA Level 2 exam, including Ethics and Professional Standards, Quantitative Methods, Corporate Finance, Equity Investments, Fixed Income Investments, and Alternative Investments. By working through these questions, candidates can gain a better understanding of the exam format and content, and can improve their chances of success on the actual exam.

Many candidates fall into the "Q-Bank trap." They spend months drilling individual questions by topic: 500 questions on Fixed Income, 400 on Equity, etc. While this helps with retention, it fails to simulate the real exam’s architecture.

The real CFA Level 2 exam presents you with a wall of text—8 to 12 minutes of reading per vignette. By the time you reach the fifth question in that set, you may have forgotten a key detail from the first paragraph.

Mock questions force you to practice the "item set" format. They train your brain to: Item Set 2

Without full-length mock exams, you are practicing sprints for a marathon.

A common mistake candidates make is saving mocks for the final week. This is a disaster. You need to start tackling CFA Level 2 mock questions at least six to eight weeks before exam day.

Here is a realistic schedule:

Over the entire study period, aim for 6 to 8 full mock exams. That means exposing yourself to roughly 500 to 700 unique CFA Level 2 mock questions.

If you are currently preparing for the CFA Level 2 exam, you have likely realized one uncomfortable truth: This is not Level 1.

Level 1 tested your breadth of knowledge via standalone multiple-choice questions. Level 2, however, tests your depth via vignettes—mini case studies followed by four to six questions. To conquer this format, there is no tool more powerful than CFA Level 2 mock questions.

But simply grinding 1,000 questions isn't enough. You need a strategy. This article will explain why mocks matter, where to find the best ones, how many you should take, and how to review them to triple your pass probability.

After completing a mock session, score it but do not look at the answers yet.

The official institute offers two full mock exams (approximately 88 questions each, totaling 176 item-set questions) on its Learning Ecosystem (LES).

Not all providers simulate the real exam equally. Here is a breakdown of the most reliable sources: