CAIA Level 2 Case-Based Questions: 2026 Exam Preparation Strategy
- Dimitri Dangeros, CFA, CAIA
- 2 days ago
- 4 min read
Preparing to sit the CAIA Level 2 2026 exam means mastering not only multiple-choice content, but also the case-based (constructed-response) portion. These questions test your ability to apply, analyze, and synthesize curriculum material in realistic scenarios — precisely the kind of professional judgment needed in alternative-investment roles. Below, you’ll find a comprehensive strategy to tackle the case-based questions effectively.
Understanding the Constructed-Response Format in CAIA Level 2
The exam divides into two parts: multiple-choice questions (~70%) and constructed-response (essay-type) questions (~30%) for Level II.
There are three constructed-response questions.
According to the 2026 curriculum update, Topic 1 (CAIA Ethical Principles) will always be tested in the first constructed-response question.
The second constructed-response question is now mapped to Emerging Topics, reflecting CAIA’s emphasis on current and evolving themes.
The third constructed-response question is a “wildcard”: it may draw from any of the other core topics (Institutional Asset Owners, Asset Allocation, Risk Management, Models, Due Diligence, Volatility & Complex Strategies, Universal Investment Considerations).
In terms of exam weight, the essay section demands serious preparation: even though it’s 30%, it can significantly influence your total score.
Why Case-Based Questions Are Critical for CAIA Level 2 2026
Demonstration of applied judgment: These questions test more than memory. You need to interpret vignettes, identify key issues, and apply CAIA-specific frameworks — especially for ethics, manager selection, and risk.
Show command of ethics in real-world context: With the new CAIA Ethical Principles fully integrated in 2026, you will be asked to analyze ethical dilemmas within case studies — not just define principles.
Preparation for professional roles: Many roles in alternative investments (due diligence, risk, allocation) require writing memos, making recommendations, and defending decisions; the CRQs mimic that.
Scoring leverage: Because there are only three essay questions, doing well on each can make a significant difference in your overall result.
Strategic Approach to Preparing for Case-Based Questions
1. Map Your Curriculum to CRQ Topics
Ethics (Topic 1): Create a robust summary of the CAIA Ethical Principles reading(s). Identify key principles, common conflicts, and stakeholder trade-offs — these will form the basis of CRQ 1.
Emerging Topics: Because CRQ 2 draws from emerging topics, pay special attention to the 2026 readings in this area (for example, new academic articles or case studies introduced in the 2026 curriculum).
Wildcard Topics (CRQ 3): Build a broad but deep understanding of all core Level II topics. For each one (Asset Allocation, Risk, Models, etc.), practice framing arguments, structuring responses, and applying theory to case scenarios.
2. Practice Structured Writing
Use the official CAIA sample exams (available through the CAIA website) to understand the format and length expectations.
Simulate exam conditions: set a strict time limit, use the same style (computer-based), and practice typing coherent, concise paragraphs.
Develop a response template for CRQs: a quick introduction, clear identification of issues, structured analysis (e.g., pros vs cons, risk implications), and a reasoned conclusion or recommendation.
3. Analyze Past CRQ Scenarios (Using Curriculum)
Review the CAIA Level II curriculum for case-based examples or “vignette-style” discussions. Use the learning objectives and keywords in the curriculum companion to pinpoint where the CRQ might draw from.
For ethics, specifically practice writing short responses to hypothetical dilemmas: identify the ethical conflict, apply CAIA principles, and recommend a course of action, noting which principle prevails and why.
4. Balance Depth and Breadth
Because the third CRQ can come from any core topic, avoid overconcentrating on only a few areas. Use a rotational revision schedule: dedicate weekly or bi-weekly slots to each major topic to ensure you cover them all.
Use mixed revision methods: reading, summarizing, mind-mapping, and writing practice CRQs.
5. Leverage Study Resources
Use the 2026 digital curriculum (provided with registration) as your primary source. This ensures you work off the most current materials.
Supplement with third-party resources (e.g., prep providers) to get additional CRQ practice — but always cross check with the official CAIA Learning Outcomes.
Review errata regularly (CAIA publishes curriculum updates/errata) to make sure your practice reflects the most up-to-date curriculum.
Exam-Day Tactics for CRQs
Planning time: When you open a CRQ during the exam, take the first few minutes to read the vignette carefully, underline key facts, and plan your response structure.
Answer the question asked: Don’t drift. Stick to what is being asked — if the prompt asks for risk assessment, don’t pivot into historical background unless relevant.
Use headings/bullets: If permitted, break out your answer into sections (e.g., “Risks,” “Trade-offs,” “Recommendation”) so it's easy for the grader to follow your reasoning.
Be concise but precise: Use clear technical terms, reference relevant frameworks from the CAIA curriculum, and avoid overly generic statements.
Proofread quickly: If time allows, spend 1–2 minutes at the end reviewing your response, checking for coherence, missing ideas, or unclear transitions.
Common Pitfalls & How to Avoid Them
Under-preparing for Ethics: Many candidates underestimate CRQ 1 (ethics), but failing to apply CAIA Ethical Principles rigorously can be costly.
Over-memorizing lists, under-analyzing: CRQs reward analysis, not rote recall. Practice applying principles rather than listing them.
Neglecting Emerging Topics: Since CRQ 2 comes exclusively from Emerging Topics, skipping or skimming them is a big risk.
Ignoring wildcard coverage: If you only prepare for a few core topics, you may be caught off guard by CRQ 3.
Not practicing under timed conditions: Writing structured responses under time pressure is a skill — cultivate it.
Final Thoughts
The CAIA Level 2 2026 case-based questions represent a pivotal portion of the exam — they test not just what you know, but how you think. A successful strategy blends strong conceptual understanding, structured writing, and disciplined practice. Focus on mastering the new CAIA Ethical Principles, deeply engage with Emerging Topics, and routinely practice CRQ responses from a broad set of topics.
By embedding CRQ practice into your study plan from the start, you'll be well positioned to confidently handle the two essay-style questions that matter most — and maximize your performance on exam day.
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