Cfa Level 2 Mock Questions -

Item Set 1: Equity Valuation (FCFF)

Vignette
Jenna Liu, CFA, is analyzing XYZ Corp for a potential investment. Selected financial data (in $ millions) for 2024:

Net income = 450
Depreciation & amortization = 120
Interest expense = 80
Capital expenditures = 200
Increase in net working capital = 40
Tax rate = 25%
Target debt-to-capital ratio = 40%
Outstanding shares = 100 million
Current stock price = $52

Liu expects free cash flow to the firm (FCFF) to grow at 5% per year after 2024. The firm’s WACC is 9%.

Question 1
The FCFF for 2024 (in $ millions) is closest to:
A) 340
B) 410
C) 490

Question 2
Using the constant-growth FCFF model, the implied firm value at the end of 2024 (in $ millions) is closest to:
A) 10,250
B) 10,762
C) 12,250

Question 3
If XYZ’s debt is valued at $2,500 million, the equity value per share is closest to:
A) $72.62
B) $82.62
C) $86.20

How to use mocks effectively

Simulate exam conditions: Full timed sessions, quiet environment, only allowed materials (calculator, formula sheet if you use one).
Do mixed-topic mocks: Level II integrates topics—avoid studying each topic in isolation near exam day.
Review thoroughly: For each incorrect or guessed question, write the core reason for error (knowledge gap, calculation error, misread). Re-solve the problem until you can explain each step.
Track metrics: Question-level accuracy, time per item set, topics missed. Aim to increase weighted depth (topic difficulty) in your later mocks.
Use progressive difficulty: Start with topic-focused item sets, move to full mixed mocks 6–8 weeks out, and take at least 4–6 full mocks before the exam.

The Mindset Shift: Mocks as Diagnosis, Not Judgment

The hardest part of Level 2 is mental. After a bad mock, you will feel like quitting. You will see social media posts of someone claiming they scored 85% on a Kaplan mock. Ignore them. cfa level 2 mock questions

Every mistake you make on a CFA Level 2 mock question is a gift. It reveals a landmine that will not explode on exam day—because you will disarm it now.

Keep a spreadsheet. Track your score per topic (Quant, Econ, FRA, etc.). Watch the red bars turn green over six weeks. That visible progress is what separates candidates who pass from those who retake.

The Bottom Line

CFA Level 2 is not an intelligence test. It is a test of attention under time pressure. The vignette is designed to break your focus.

Every mock question you practice is an opportunity to train your eyes to find the needle (the relevant data) in the haystack (the vignette).

Stop worrying about the number of mocks. Start obsessing over the quality of your question review. Item Set 1: Equity Valuation (FCFF) Vignette Jenna

Your mission this week: Take one partial mock (44 questions). But this time, for every question, read the question before the vignette. Watch your time drop by 15 minutes.

Good luck. You’ve survived Level 1. Level 2 just asks you to be smarter, not harder.

Author Note: Looking for free CFA Level 2 mock questions? Start with the CFA Institute Learning Ecosystem. Then try the 2025 Kaplan mock sampler. Have a favorite provider? Drop a comment below.

1. The "First Pass" Rule (Don't Read the Vignette First)

Most candidates fail mocks because they read the vignette like a novel. Stop.

When you open a mock question:

Skip to the first question.
Read what it asks (e.g., "Based on Exhibit 2, the FCFF is closest to:")
Scan the vignette for only that data point (Exhibit 2).
Answer. Then move to the next question.

Why? Level 2 vignettes are full of red herrings—extra data to confuse you. Reading top-to-bottom wastes 3 minutes and leaves you overwhelmed. Reading question-first turns the vignette into a lookup table.

Pro tip: In the real exam, the vignette stays on the left, questions on the right. Practice this split-screen hunting technique now.

2. Bridging the "Application Gap"

Reading the curriculum gives you the formulas and concepts (e.g., the formula for Free Cash Flow to the Firm). However, a mock question might present a complex income statement with obscure adjustments, requiring you to identify which numbers to plug into that formula. Mock questions bridge the gap between knowing the theory and applying it to a messy, realistic scenario.

Common Level II mock question types (short list)

Equity: DCF, residual income, comparables, accounting adjustments.
Fixed income: yield curves, credit spreads, duration, convexity, structured products.
Derivatives: pricing forwards/futures, option adjustments, hedging examples.
FRA/Quant: regression interpretation, time-series, simulation outputs.
Economics: currency carry trades, purchasing power parity, policy impacts.
Corporate finance: capital budgeting with WACC changes, restructuring.
Portfolio management: mean-variance optimization, performance attribution.

3. Answer Choices That Trap Common Mistakes

If you forget to multiply by the derivative contract multiplier, one answer choice will be exactly that wrong number. If you use book value instead of market value, there’s a choice waiting for you. Good mock questions are designed by psychometricians, not random tutors.