Advanced Financial Reasoning at Scale: A Comprehensive Evaluation of Large Language Models on CFA Level III

As financial institutions increasingly adopt Large Language Models (LLMs), rigorous domain-specific evaluation becomes critical for responsible deployment. For advanced financial reasoning, the Chartered Financial Analyst (CFA) Level III exam is widely considered the gold standard. In this paper, we present a comprehensive benchmark evaluating 23 state-of-the-art LLMs on mock CFA Level III exams, which require answering challenging multiple choice and essay questions. We evaluate reasoning and non-reasoning models, both proprietary and open source, using three prompting strategies: zero-shot, chain-of-thought, and self-discover. We find that frontier reasoning models, such as o4-mini, Gemini 2.5 Pro, and Claude Opus 4, using chain-of-thought prompting demonstrate strong capabilities, successfully passing the mock Level III exams. While there is little to separate the frontier models on multiple choice questions, only a few models excel at the complex essay questions, which require analysis, synthesis, and strategic thinking. These results demonstrate significant progress in the financial reasoning capabilities of LLMs, which previously [13] could clear Level I and Level II exams but struggled with the Level III exam, particularly the essay questions.