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Curriculum

Level II Curriculum & Guide

Level II shifts from knowledge recall to applied analysis. You’ll analyze case studies, synthesize data across topics, and recommend solutions the way real analysts do.

Welcome

Introduction

The Licensed International Financial Analyst (LIFA™) Program’s Level II exam emphasizes application and analysis. You’ll be presented with realistic scenarios that require integrating ethics, accounting, economics, and quantitative methods into defensible recommendations.

Progression

How Level II is Different

  • From concepts to cases: Items are built around short vignettes and exhibits (tables, charts, disclosures).
  • Cross-topic synthesis: Expect questions that combine FSA with valuation, or macro with fixed-income strategy.
  • Explain your choice: Distractors target common analytical mistakes (e.g., wrong cash-flow line item, double counting risk).
Candidate-first

Registration & Scholarships

LIFA exams are available for Levels I–III. Level II retakes require a 60-day wait and allow up to four attempts. There is no enrollment fee. You only pay the exam fee if you pass. Register on the secure registration page.

Scholarships

  • Access Scholarship
  • Women’s Scholarship
  • Student Scholarship
  • Professor Scholarship
Apply during registration where eligible.
What’s covered

Content & Structure

Level II uses case-based multiple-choice built from eleven Learning Modules. Items favor “show your work” reasoning: reading an exhibit, identifying the right inputs, and applying the appropriate model or framework.

Transparency

Level II Exam Weightings

Weightings are reviewed annually by the IRA.
Approximate subject weightings for LIFA Level II
SubjectWeight
Ethics (applied)15%
Economics (macro/FX in practice)5%
Corporate Finance (capital decisions)7.5%
International Markets (market microstructure)5%
Quantitative Analysis (modeling & inference)10%
Financial Statement Analysis15%
Fixed-Income Investments15%
Equity Investments12.5%
Derivative Instruments7.5%
Alternative Investments2.5%
Portfolio Management5%
Preparation

Study Materials

Use practitioner texts and cases. Prior coursework is helpful, but Level II rewards hands-on practice: model files, statement footnotes, credit reports, and real yield curves.

Planning

Study Strategies

  • Study in topic pairs (e.g., FSA + Equity; Macro + Fixed Income).
  • Build a case notebook: one page per case with data, question, approach, answer, and what you’d do differently.
  • Practice unit conversions and sign conventions to avoid mechanical errors.
Policy

Rules & Regulations

Online proctored, multiple-choice, single 2-hour session. Items must be answered in sequence. Standardized administration applies globally.

Results

Grading & Results

Machine-scored with random hand audits. Results typically in seven days; reported pass/fail.

Syllabus

Learning Modules

Expand a module to view its focus and applied tasks.

Learning Module 1: Ethics (Applied)

Apply standards to realistic scenarios with competing incentives, imperfect information, and cross-border issues.

Applied Tasks

  • Evaluate soft-dollar research arrangements
  • Identify material nonpublic information in mosaic analysis
  • Diagnose suitability breaches in multi-account trade allocations
  • Design compliant performance presentations
  • Resolve conflicts in issuer-paid research
  • Draft a pre-clearance policy and blackout schedule
  • Determine corrective actions after a standard violation
  • Assess independence/objectivity for sell-side vs buy-side roles
Learning Module 2: Economics (Practice)

Translate macro/FX views into positioning and inputs for valuation, credit, and risk models.

Applied Tasks

  • Map policy paths to yield-curve shifts
  • Apply interest-rate parity to FX hedging choices
  • Use the Phillips curve and output gap to frame earnings sensitivity
  • Compute real vs nominal returns for multi-currency portfolios
  • Evaluate trade-exposed firms under changing terms of trade
  • Build top-down sector tilts from macro dashboards
Learning Module 3: Corporate Finance (Decisions)

Analyze capital budgeting, financing mix, payout, and governance with real-world frictions and constraints.

Applied Tasks

  • Build project DCFs with working capital and terminal value
  • Compare IRR/MIRR/NPV under differing hurdle rates
  • Quantify leverage trade-offs (WACC vs interest coverage)
  • Evaluate buybacks vs dividends for signaling and flexibility
  • Model Monte Carlo scenarios for key drivers
  • Perform replacement and salvage analysis including tax shields
Learning Module 4: International Markets (Microstructure)

Use trading mechanics, index construction, and liquidity concepts to execute and benchmark.

Applied Tasks

  • Choose order types for different liquidity regimes
  • Estimate implementation shortfall
  • Compare value-weighted vs equal-weighted rebalancing
  • Diagnose market anomalies vs data-mined artifacts
  • Evaluate ADRs/foreign listings and custody implications
Learning Module 5: Quantitative Analysis (Modeling)

Estimate, test, and interpret models used across valuation, risk, and forecasting.

Applied Tasks

  • Run and interpret single- and multi-factor regressions
  • Identify heteroskedasticity, autocorrelation, and multicollinearity
  • Compare in-sample vs out-of-sample performance
  • Construct confidence intervals and p-value–based decisions
  • Build time-value schedules and scenario trees
  • Use safety-first rules and drawdown metrics in portfolio context
Learning Module 6: Financial Statement Analysis (Applied FSA)

Mine the statements and footnotes to assess quality, comparability, and valuation inputs.

Applied Tasks

  • Reconcile IFRS vs US GAAP for key line items
  • Build FCFF/FCFE from statements
  • Analyze working-capital cycles and cash conversion
  • Identify red flags in revenue recognition and provisions
  • Normalize margins for one-offs and accounting changes
  • Perform DuPont and extended profitability decomposition
Learning Module 7: Fixed-Income Investments (Credit & Rates)

Price and risk-manage government, credit, and structured bonds using curves, spreads, and options.

Applied Tasks

  • Bootstrap spot curves and compute key-rate duration
  • Compare Z-spread vs OAS for callable structures
  • Attribute total return by carry/roll/spread
  • Evaluate prepayment risk and negative convexity
  • Conduct scenario and stress tests across curve shapes
  • Translate macro shocks into sector/quality tilts
Learning Module 8: Equity Investments (Valuation)

Value businesses using DCF and multiples with attention to growth, risk, and competitive dynamics.

Applied Tasks

  • Build dividend/FCF DCFs with sensitivity tables
  • Select peer sets and adjust multiples
  • Convert accounting earnings to economic profit (EVA)
  • Detect structural breaks in growth/ROIC
  • Evaluate moats and industry positioning
  • Triangulate valuation from mixed methods
Learning Module 9: Derivative Instruments (Pricing & Hedging)

Use options, futures, forwards, and swaps to manage exposures and express views.

Applied Tasks

  • Price European options with put-call parity checks
  • Construct collars, spreads, and delta-hedges
  • Choose futures vs forwards for basis/credit considerations
  • Design rate/FX/commodity hedges with appropriate tenors
  • Explain P&L paths under different volatility and carry assumptions
Learning Module 10: Alternative Investments (Roles & Methods)

Assess private capital, hedge funds, real assets, and infrastructure within diversified portfolios.

Applied Tasks

  • Estimate NAV and PME for private equity
  • Evaluate fee structures and hurdle alignment
  • Compare core vs opportunistic real-estate underwriting
  • Assess liquidity/valuation lags and smoothing
  • Map alternatives to portfolio objectives (income, inflation hedge, diversification)
Learning Module 11: Portfolio Management (Integration)

Integrate views into policy, allocation, implementation, and performance evaluation.

Applied Tasks

  • Draft an Investment Policy Statement with constraints
  • Build strategic vs tactical allocation
  • Compute money-weighted vs time-weighted returns
  • Attribute performance (allocation, selection, interaction)
  • Apply factor lenses to risk budgeting
  • Translate client objectives into implementable portfolios
Questions

Frequently Asked Questions

These answers also power the structured data for richer search results.

How is LIFA Level II different from Level I?

Level II shifts from knowledge recall to applied analysis. Questions are built around short vignettes and exhibits, requiring cross-topic synthesis and real-world decision making.

What is the exam format for Level II?

Online, proctored, multiple-choice, single 2-hour session. Items are answered in sequence with standardized global administration.

What subjects are tested and how are they weighted?

Approximate weights: Ethics 15%, Economics 5%, Corporate Finance 7.5%, International Markets 5%, Quantitative Analysis 10%, Financial Statement Analysis 15%, Fixed-Income 15%, Equity 12.5%, Derivatives 7.5%, Alternatives 2.5%, Portfolio Management 5%.

Are there enrollment fees or retake rules?

There is no enrollment fee. You only pay the exam fee if you pass. Retakes require a 60-day wait, with up to four attempts allowed.

When are results released and how are they reported?

Results are typically available within seven days and are reported as pass/fail. Machine scoring is supplemented with random hand audits.