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CEP Level 2

Hello All,

I would like to open this discussion board up to CEP Level 2 candidates, as well as those who have already completed the exam, to discuss content and topics and perhaps offer tips and suggestions for exam preparation.  Many of us have found the earlier Level 1 discussion board to be very helpful, and I hope to see the same experience here.  Thank you, and best of luck to all my fellow candidates! 

Best Regards,

Michael Raissis

Replies to this Topic

Congratulations to Michael and the rest of you for passing Level 1.  One down, two to go!

Here are a few thoughts.   It's been a few years, but I'm sure Dan, Emily and others will keep me honest to the extent things have changed.

1. Level II is the most difficult of the three exams, because it is 100 questions, but the questions are more difficult than Level I.  (Level III is, I think, 75 questions, but you still get four hours.)

2. When I took the exam, it still had 25 questions on the plan documents, and it was the same plan documents as Level I.  As I wrote last time, you should know the plans in and out b/c the questions are 'lay ups' compared to the rest of the exam.

3. I remember that the Securities & Tax Law questions were particularly difficult.  I suggest that you either create an outline of the laws, which you can bring in your binder, or at least have a solid index for looking things up during the exam.

4. I remember a decent amount of questions where you had to calculate the DD or QD for ESPP and ISO disqualifying dispositions.  Know these formulas well and practice on as many sample questions as you can (you can purchase online practice tests through the NCEO website).

5. I remember about 10 - 15 questions on Accounting.  Back then it was APB 25 and FAS 123(R).  Now it's probably mostly FAS 123(R).

Good luck!


Great Idea!  The level I discussion was very helpful.  I will be registering for Level II next week and have already started "re-reading" based upon the level II curriculum listed in my old binder.


Every tip helps!

Hello all.  Just a few clarifications from the CEPI.  And... congratulations Michael on passing L1.  Glad to see you are ready for L2.  I think it is easiest to do all the exams in the shortest time possible.

L1 and L2 are 100 questions.  L3 is 70 questions.  All exams are 4 hour exams.  The XYZ plan documents are the same for each level.  The CEPI has very specific (and public) test specifications.  I've pasted them below for reference, so you know exactly how many questions will be on each exam for each domain.  This table is also on the CEPI website.

As John has pointed out, Level 2 is a very challenging exam.  There is a significant increase in the amount of material as well as the level of difficulty.  All the 2009 materials have been updated (which includes the elimination of Kraus and the addition of a new accounting book at L3) - please make sure you have current materials. 

All materials (NCEO and Fairmark press) are now available and ready to order.  The 2009 binder is in production and should start shipping to registered candidates next week. If you have not yet registered, do so early to maximize your study time.  Also, with your registration you get the discount codes for the books - a great deal!

Good luck studying!

Functional Area Level 1 percentage weighting Level 2 percentage weighting Level 3 percentage weighting
Equity Plan Design, Analysis, and Administration 30% 26% 30%
Accounting 12% 16% 20%
Corporate and Securities Law 25% 29% 26%
Taxation 33% 29% 24%

Michael and All:

Two tips for L2 - Start Studying Now and Study Often.  Yes, L2 is 3 x harder than L1!

We have a great on-line, audio-visual CEP Exam Prep Course with 100+ Sample Exam Questions for any level.  The CEP Exam Prep Course is a structured study program with a study timetable, webinars, live review sessions, live Q&As, and a 24/7 Question Box.  

We have been teaching these Courses since 2002 and have a high pass rate for those who take the course.

FRS Equity Strategies (formerly FatRabbit Services) will have the classes ready in mid-March.

Marianne Brannock-Hill, CTP CEP

Lead CEP Instructor

This is one of my favorite forums.

John is right about the plan documents.  learn them, memorize them, unerstand each feature and especially those features that define nitty gritty specifics of things that don't happen every day.

As for the other books.  One good rule is this.  If you think something is hard enough to be on Level 3, there is a good chance it will be on Level 2.

I have found that Level 1 has a "cap" on the type of information in it and Level 3 ends up being the hard stuff that you have been reading about for at least 18 months before you take the test. Becuase of this Level 2 often ends up being a stew of sort of easy questions and very diffcult questions.  You have far more texts and far deeper requirements of topics.

It is essential that you build a way for you to quickly refer back to your books.  Tabs help, a matrix helps, understanding how one item can impact accounting, tax, administration and legal help.

I will post more as helpful things come to me...

The NCEO has comprehensive CEP exam preparation for Level 1, 2, and 3 Candidates, Revised for 2009. Try the Live Demo for FREE -

Try the new Prep Course by going to http://www.nceo.org/training/cep/login.php and logging in with the username demo and the password user (both are case-sensitive). The demo version of the course presents you with what a Level 3 user would see (i.e., links for questions, etc., for all three levels). In the demo, you are limited to a single set of 10 questions for the Level 1 taxation quiz and cannot view Webinars.
The NCEO's CEP Institute Exam Prep Course is a complete educational tool that combines the benefits of online learning with hundreds of sample practice questions. CEP candidates enrolled in our preparation course receive (1) access to our online learning environment with a multitude of sample questions, answers, and explanations, plus a stock plan glossary; (2) Question Review Webinars presented by leading experts; and (3) a laminated CEP Institute Exam Reference Guide for use during the exam.

If you have any questions, please feel free to email EquityComp@nceo.org.




Two suggestions.

1) You should think about asking ECE members to tell a little about their experiences using the NCEO CEP Exam Prep

2)  You should list the actual Prep Date Webinars on the ECE event calendar.



Thanks Dan - I am new at this so thanks for the tips!!



I personally participated in NCEO's CEP Level I exam prep last November and successfuly passed the exam with pretty high score. In addition to taking the prep course, I spent approximately 40+ hrs in reading/studying the exam materials required by CEPI.

I would say that NCEO's exam prep was very helpful because it summarized all the materials that I've been reading and broke it down to each of the 4 areas with highlights of all important concepts.

I plan to take the Level II this year, probably in November since I am totally buried in our 10-K/Proxy/Annual Mtg for the first half of the year.  (We are a 12/31 FYE company, so first 6 months of the year is quite hectic.)

Good luck to everyone taking Level II in June!

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