CAIA Pass Rate 2025: Level 1 (45%) vs Level 2 (59%) - Which Is Harder?
- Dimitri Dangeros, CFA, CAIA
- 2 days ago
- 3 min read
The numbers tell a surprising story: CAIA Level 1 has a lower pass rate than Level 2. But does that really mean Level 1 is harder? Here's the data-driven analysis of which CAIA level presents the bigger challenge.
The 2025 Pass Rate Reality
Level 1: 45% pass rate (September 2024)Level 2: 59% pass rate (March 2024)
Latest March 2025 data: 48% for Level 1 and 62% for Level 2
This 14-point gap persists consistently, but the reasons might surprise you. CAIA Pass Rate 2025
The Numbers Over Time CAIA Pass Rate 2025
CAIA Level 1 Trend
Historical Peak: 70%+ (2006)
Current Range: 45-48%
7-year Average: 51%
Direction: Declining since 2006
CAIA Level 2 Trend
Historical Range: 56-70%
15-year Average: 63%
Current Range: 59-62%
Direction: More stable, slight upward trend since 2022
Why Level 1 Has Lower Pass Rates
1. Higher Candidate Volume
More candidates are taking Level 1 than previously, which often correlates with lower pass rates as the candidate pool becomes more diverse in terms of preparation quality.
2. Increased Exam Complexity
The exam is becoming more challenging as CAIA matures as a designation. The curriculum has evolved significantly since early years when pass rates exceeded 70%.
3. Underestimation Factor
Many Level 1 candidates underestimate the exam's rigor, leading to inadequate study preparation despite CAIA's recommendation of 250-300 hours per level.
But Which Is Actually Harder?
Level 1 Difficulty Factors
200 multiple-choice questions in 4 hours
Broad coverage across 8 alternative investment topics
Foundation building requires mastering new concepts
Volume challenge: More questions to get through
Level 2 Difficulty Factors
Mixed format: 100 multiple-choice (70%) + essay questions (30%)
Application focus: "Tests your ability to apply tools to analyze and invest in alternative investments"
Writing requirement: Constructed response questions demand different skills
Synthesis needed: Must combine knowledge across topics
The Verdict: Level 1 vs Level 2
According to historical and recent pass rates, Level 1 is the hardest CAIA exam, however if you struggle with writing, Level 2 may be the most difficult exam for you.
Why Level 1 Is Statistically Harder
Consistently lower pass rates across multiple years
Higher failure rate due to broader, less experienced candidate pool
More content to master in same time frame (200 vs 100 questions)
Why Level 2 Might Feel Harder
Essay Component: "Constructed Response questions are introduced, which are questions you will need to provide a written response"
Higher Stakes: You've already invested time passing Level 1
Application Pressure: Moving from knowledge to application
Professional Experience: Level 2 candidates often have more to lose
What the Experts Say
Study Time Reality: "CAIA Association reports that the average Level II candidate studies for at least 250 hours" - same as Level 1, but material is more application-focused.
Format Challenge: Level 2's essay questions test whether you can "demonstrate your understanding of Alternative Investments and your thought process as an investment manager."
Bottom Line
Level 1 is statistically harder with consistently lower pass rates, but Level 2 tests different skills that some candidates find more challenging.
The Real Challenge: Most candidates underestimate both levels. With only 40% of those who register for the program eventually passing both levels, the CAIA journey requires sustained commitment.
Success Strategy: Treat both levels with equal respect. The 59% Level 2 pass rate doesn't mean it's easy - it means the candidates who reach it are generally better prepared than the broader Level 1 pool.
Whether you're facing Level 1's volume or Level 2's application focus, allocate the full 250-300 recommended study hours and prepare for a legitimate professional challenge.
Unlock your potential with our comprehensive CAIA® practice exams and study packages!
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