The CFA Level 1 Exam Topics and How They’re Covered

It’s never too early to get started on becoming a successful financial advisor. To help you navigate through the rigorous world of the CFA exams, we’ve put together this comprehensive overview. 

The Fundamentals

Many people get so caught up with trying to pass the CFA exam that they overlook the fundamental elements of the exam itself. So let's get basic - in the best way possible:

The CFA Level 1 Exam’s TEN topics are divided into FOUR Functional Areas:

  1. Ethical and Professional Standards
  2. Investment Tools
  3. Portfolio Management and Analysis
  4. Assets

The Exam itself is divided into two sessions:

The 1st session: covers Ethical and Professional Standards and Tools

The 2nd session: covers Portfolio Management and Analysis and Assets

Your final score is based on correct answer weights throughout the ten topics. 

How much of 'Ethics and Professional Standards' is included?

Doing well on this topic will really help you if you're in between marks. It could be the academic 'life or death' scenario where an impressive Ethics score will push you into the 'passing' territory. This is because the CFA Institute emphasizes Ethics as it distinguishs CFA charterholders as individuals committed to maintaining a high degree of professionalism for the investment industry. Likewise, Ethics is an entire topic on its own - it accounts for biggest topic weight of 15-20%!

How much of 'Investment Tools' is included?

Investment Tools has THREE topics:

  1. Quantitative Methods                    -8-12%
  2. Economics -                                 -8-12%
  3. Financial Reporting and Analysis   -13-17%

Quantitative Methods - this is used financial analysis and investment management. 

Economics - questions concerning microeconomics, macroeconomics, and foreign exchange are expected to come.

Financial Reporting and Analysis - questions will be about how to analyze, interpret, and evaluate corporate financial statements.

How Much of 'Portfolio Management and Analysis' is  included?

Portfolio Management and Analysis has TWO topics:

  1. Corporate Issuers             -8-12%          
  2. Portfolio Management      -5-6% 

Corporate Issuers: covers corporate governance and issues relating to how entities both raise and use capital. 

Portfolio Management: covers broad issues relating to wealth management for individual and institutional investors. 

How Much of 'Assets' is included?

Assets has FOUR topics: 

  1. Equity Investments             -10-12%
  2. Fixed Income                      -10-12%
  3. Derivatives                            -5-8% 
  4. Alternative Investments         -5-8%

Equity Investments: questions related to the valuation and analysis of corporate shares will come.

Fixed Income: questions cover how this asset class is valued and includes government and corporate bonds.

Derivatives: includes complex securities that derive value from an underlying security. Often used as a financial hedge, derivatives include options, forward contracts, and swaps.

Alternative Investments: tests your comprehension of investments such as private equity funds, real estate, and commodities. 

In Conclusion...

Preparing for the rigorous topics in the CFA Level 1 exam is naturally overwhelming. 300 hours of recommended studying is daunting but that's why we're here - to help in every which way we can. If you’re looking for an efficient study platform to help you prepare for a passing score, you’ll surely appreciate our very own MasterCFA prep! 


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