The CFA Level 2 exam is a [insert your favorite swear word here]. The week before I took the CFA Level 2 exam I got a sinus infection thanks to my delightful spring allergies. I couldn’t breathe, I couldn’t sleep, and my head was pounding, but I had to press on.

At this point, after passing the Level 1 exam the prior December, I had been studying CFA material for nine straight months and had to give the test my best effort. The problem is that Level 2 is chock full of esoteric finance. Every other study item falls under the category of “When the hell am I ever going to use this?”

Still, I felt like I had a good enough grasp of the material that I could pass and move on to Level 3. Then, on test day, I ran into a question I will never forget. It was an entire item set on Treasury bond options. Not just bonds or options on stocks, both of which I understood, but options on bonds.

I didn’t have a clue. I mustered my best effort to apply what I knew of options to bonds, but the concept was so foreign to me that I didn’t know if my answer was even in the right area code.

A couple months later when I got the notification that the exam results were posted, I discovered that my answer had not been in the right area code. It might not have even been in the correct hemisphere because there it was:

FAIL

I can’t remember the exact phrasing the CFA Institute used to say I did not pass. All I could see was that I had failed and it hit me like a sucker punch to the gut.

Given the low pass rates of the CFA exams, there’s a good chance this will happen to you, so here’s how to cope and press on after failing the CFA exam.

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