The Ultimate Guide to Writing High-Scoring Answers on CAIA September 2025 Level 2
- Dimitri Dangeros, CFA, CAIA
- Aug 20
- 6 min read
If you’re sitting CAIA Level II in the September 2025 window, this guide is built on the official 2025 CAIA Candidate Handbook and exam pages—so every exam fact, weight, and policy you’ll see below is current for 2025 and directly relevant to your sitting. The goal: show you exactly how the exam is structured, what graders are looking for, and how to craft constructed-response (CR) answers that earn full credit—consistently.
Know your battlefield: the 2025 Level II blueprint
Two sections, five total hours: a tutorial + NDA and instructions, then Section 1 and Section 2 with an optional 30-minute break in between. Each section is 130 minutes. For Level II, Section 1 = 100 MCQs; Section 2 = three CR (essay-type) sets. You can’t go back to a section after time expires.
Topic weights and where they’re tested: Multiple-choice covers seven core domains, each 8–12% of the MC portion: Institutional Asset Owners, Asset Allocation, Risk & Risk Management, Methods & Models, Accessing Alternatives, Due Diligence & Selecting Managers, and Volatility & Complex Strategies. Universal Investment Considerations and Emerging Topics are exclusively constructed-response (10% each). Overall weighting: MC 70% / CR 30%.
CR mechanics: CR questions are multi-part; each part displays its point value. Most parts can be answered in one or two paragraphs; grammar/spelling aren’t penalized; you won’t be asked to draw tables/figures; when a question asks for n examples, only the first n are graded. Answers are typed into the exam interface.
Calculators: Only Texas Instruments BA II Plus (incl. Professional) and HP 12C (incl. listed variants) are allowed. Spare devices/batteries have restrictions; possession of unapproved calculators voids results.
What’s in scope: The official 2025 Level II topic list spans Institutional Asset Owners through Volatility/Complex Strategies, plus the Universal Investment Considerations theme and Emerging Topics articles.
Your scoring advantage: how CAIA’s CR questions are designed (and graded) Guide to Writing High-Scoring Answers on CAIA September 2025 Level 2
CAIA tells you how to earn points—right inside the handbook. Treat each sub-question’s verb + point value as your scoring map: Guide to Writing High-Scoring Answers on CAIA September 2025 Level 2
Answer to the verb. Describe, justify, calculate, compare, recommend—use that action as your opening phrase.
Match the requested count. If it asks for three risks, give exactly three—and number them (1/2/3). Only the first n are graded.
Calcs count. Show a brief setup, key inputs/assumptions, and the computed figure to make your method auditable in seconds.
Concise paragraphs win. One to two short paragraphs per part is the norm. Bullet points are fine if they are complete and trace directly to the verb. Grammar doesn’t cost points; relevance does.
A repeatable answer framework: A.C.E.R.
Use A.C.E.R. on every CR sub-part to hit all the grading hooks without overwriting:
Answer the verb in one sentence (the “headline” answer CAIA could award full credit for if time ran out).
Cite the required n items (numbered) or the formula/assumptions for a calc.
Explain briefly—one line per item—tying back to the stem’s scenario data.
Relate to investor objectives/constraints or risk/return trade-offs if the question is portfolio-or client-oriented.
This structure keeps you targeted (scoring) and compact (time-efficient).
Time management: a minute-by-minute plan for Section 2
You have 130 minutes for three CR sets. A practical split:
Set 1: 43 minutes
Set 2: 43 minutes
Set 3: 39 minutes + 5 minutes buffer for review/cleanup
Within each set, allocate time proportionally to point values. For instance, in a 30-point set with parts worth 12/10/8, think ~17/14/11 minutes. Write the time budget next to each part before you begin; move on when time is up—the last points in a set are just as valuable as the first. (Remember you cannot return to this section once time is over.)
The two guaranteed CR areas in 2025—and how to nail them
1) Universal Investment Considerations (10% CR only)Expect prompts on professionalism/fiduciary duty, regulation across jurisdictions, geopolitics, and sustainability integration. High-scoring answers:
Start by naming the principle (e.g., duty of loyalty; alignment to IPS; double materiality in sustainability).
Apply to the scenario: client type (e.g., sovereign wealth fund vs. endowment), horizon, liquidity, constraints.
Conclude with an action or policy change that would align with the principle (e.g., revise due-diligence checklist to capture specific operational ESG risks).
2) Emerging Topics (10% CR only)Themes can include digital assets microstructure and custody, private-markets liquidity/rebalancing, DeFi risks, or portfolio rebalancing mechanics for illiquids. Score well by:
Defining the core concept precisely (e.g., “liquidity sequencing risk in capital-call structures”).
Framing two or three risks/benefits the question requests, each tied to a portfolio outcome (tracking error, drawdown, cash drag).
Proposing a control or metric (e.g., committed-to-paid-in ratio trigger; gate terms; stablecoin counterparty controls).
What graders reward in calc/valuation questions
Calculator-ready clarity: Put the formula (short form), inputs with units, keystrokes/logic, and the result on one screen—no digging. (Use your approved BA II Plus or HP 12C.)
Assumption callouts: If the stem under-specifies (e.g., compounding), state a reasonable assumption in 3–5 words before computing.
Signpost the “so what.” After the number, add one line of interpretation (e.g., “IR higher than benchmark → manager’s selectivity adds value net of risk.”)
Precision tactics that convert to points
Mirror the keywords from the task verb and the learning objective implicit in the stem.
Front-load your answer with the requested number and labels: “Three operational due-diligence risks are: (1) valuation policy… (2) cash controls… (3) key-person…”
Scenario anchors: Quote the case fact you’re using (“family office with concentrated operating-company wealth”) before the implication.
One idea per sentence. Short sentences reduce grader ambiguity and keep you within the one-to-two-paragraph norm.
Don’t over-answer. More than the requested n items won’t be graded and wastes time.
Section 1 MCQs: quick wins that boost your overall pass odds
Answer every question. There’s no penalty for guessing and blank answers are auto-incorrect.
Flag and move. Do fast passes first, flag the time sinks, then return in your remaining time. CAIA’s interface supports flagging and comments within a section.
Respect topic groupings. Questions in a topic are grouped—use momentum once you’re “in” a topic’s mindset.
A model CR answer (miniature)
Prompt (10 points): “List three operational due-diligence red flags for a hedge fund investing in dispersion strategies and explain why each matters for a sovereign wealth fund with low liquidity tolerance.”
A (headline): Three ODD red flags are (1) valuation policy discretion, (2) cash movement controls, (3) key-person dependency.
Valuation policy discretion — If internal pricing overrides are frequent without third-party validation, NAV can be smoothed, masking drawdowns; a low-liquidity SWF risks delayed problem detection.
Cash movement controls — Weak dual-authorization or poor reconciliations elevate operational loss/fraud risk; forced liquidations to cover losses would conflict with low cash-flow flexibility.
Key-person dependency — Strategy execution concentrated in one PM with undocumented processes increases continuity risk; key-person departure could force disorderly unwinds.
(Answer mirrors the verb, delivers exactly three, and ties each to the investor’s constraint—earning full marks efficiently.)
Exam-day checklist for September 2025 candidates
Bring:
Government ID and printed Prometric confirmation with matching first/last name (digital copies not accepted).
One approved calculator (BA II Plus/Professional or HP 12C variants). No other models; spare devices/batteries are controlled and require permission to swap.
A clear, label-free water bottle (test center rules apply). Plan for the optional 30-minute break only between sections; unscheduled breaks consume testing time.
Your 4-week CR refinement plan (works even if content is “done”)
Week 4: Build a CR binder by topic (tabs for UIC and Emerging Topics). For each learning objective, write a one-sentence definition and create a 3-item list you could produce under time pressure.
Week 3: Drill A.C.E.R. on past-style prompts. Force yourself to write only the requested number of items. Time every sub-part against its point value.
Week 2: Do two full Section 2 simulations (130 minutes). After each, self-grade ruthlessly against verbs, counts, and whether your interpretation line connects to the investor outcome.
Week 1: Create a cheat sheet of verb triggers (e.g., Define = precise sentence; Describe = features + example; Compare = dimensioned table in prose; Recommend = action + rationale + risk). Sleep, diet, and calculator familiarity dominate this week. (Only approved models allowed.)
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