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Best CFA®Level I Study Order

By: Kaplan Schweser
January 19, 2023
Best CFA Level I Study Order

For most CFA candidates we recommend spending 6 months preparing for the Level I exam, so it’s understandable why you’d want to optimize your study order. Each candidate may have a unique ideal study order, but in general, you can follow this structure to prepare for the Level I exam.

What Order Should You Study Level I Topics?

Ideally, you should study the curriculum in the order presented below, as some topics will build on others. For example, asset valuation builds on the time value of money concepts covered in Quantitative Methods. However, if you already have this knowledge, then the order may not really matter and you may wish to change the order. The key is prior knowledge and being conservative. Don’t overestimate your ability in a given topic area. Of course, if you do not have any knowledge in these areas, then we recommend you stick to this order.

  1. Quantitative Methods (8-12% topic weight)
  2. Economics (8-12% topic weight)
  3. Financial Statement Analysis (13-17% topic weight)
  4. Corporate Issuers (8-12% topic weight)
  5. Equity Investments (10-12% topic weight)
  6. Fixed Income (10-12% topic weight)
  7. Derivatives (5-8% topic weight)
  8. Alternative Investments (5-8% topic weight)
  9. Portfolio Management and Wealth Planning (5-8% topic weight)
  10. Ethical and Professional Standards (15-20% topic weight)

Assess your baseline knowledge of the Level I CFA Program curriculum with a free CFA diagnostic exam

1. Quantitative Methods

CFA Topic

Exam Weight

Approximate Exam Questions

Quantitative Methods8-12%15-21

 

Level I Topics to Study for Quantitative Methods

  • Time value of money
  • Organizing, visualizing, and describing data
  • Probability concepts
  • Common probability distributions
  • Sampling and estimation
  • Hypothesis testing and linear regression basics

During the time you prepare for quants, make sure you familiarize yourself with the CFA exam calculator policy. Once you have an approved calculator (Texas Instruments BAII Plus or Hewlett Packard 12C) spend time getting to know the basics of setting up your calculator

2. Economics

CFA Topic

Exam Weight

Approximate Exam Questions

Economics8-12%15-21

 

Level I Topics to Study for Economics

  • Demand and supply analysis
  • Firm and market structures
  • Aggregate output, prices, and economic growth
  • Business cycles
  • Monetary and fiscal policy
  • Geopolitics
  • International trade and capital flows
  • Currency exchange rates

Keep track of your progress by downloading our free 6-Month Level I CFA study progress tracker that can be customized to fit your needs.

3. Financial Statement Analysis

CFA Topic

Exam Weight

Approximate Exam Questions

Financial Statement Analysis13-17%24-30

 

Level I Topics to Study for Financial Statement Analysis

  • Financial reporting statements for income statements, balance sheets, and cashflow statements 
  • Financial analysis techniques
  • Inventories such as long-lived assets and income taxes
  • Non-current (long-term) liabilities
  • Financial reporting quality
  • Different applications of financial statement analysis

When you get to preparing for financial statement analysis, learn how to use advanced TI BAII Plus calculator functions.

4. Corporate Issuers

CFA Topic

Exam Weight

Approximate Exam Questions

Corporate Issuers8-12%15-21

 

Level I Topics to Study for Corporate Issuers

  • Corporate structures and ownership
  • Corporate governance and other ESG consideration basics
  • Business models and risks for capital investments, working capital and liquidity, cost of capital basics, and capital structures
  • Measures of leverage

5. Equity Investments

CFA Topic

Exam Weight

Approximate Exam Questions

Equity Investments10-12%18-21

 

Level I Topics to Study for Equity Investments

  • Marketing organization and structure
  • Security market indexes
  • Market efficiencies
  • Equity securities basics
  • Concepts and basic tools of equity valuation

6. Fixed Income

CFA Topic

Exam Weight

Approximate Exam Questions

Fixed Income10-12%18-21

 

Level I Topics to Study for Fixed Income

  • Defining elements of fixed-income securities
  • Issuance, trading, and funding in fixed-income markets
  • Fixed-income valuation basics
  • Asset-backed securities basics
  • Fixed-income risks and returns
  • Fundamentals of credit analysis 

7. Derivatives

CFA Topic

Exam Weight

Approximate Exam Questions

Derivatives5-8%9-14

 

Level I Topics to Study for Derivatives

  • Derivative instruments and derivative market features
  • Forward commitment and contingent claim features and instruments
  • Derivative benefits, risks, and issuer and investor uses
  • Pricing and valuation of forward contracts and for underlying and varying maturity
  • Pricing and valuation of futures contracts
  • Pricing and valuation of interest rates and other swaps
  • Pricing and valuation of options
  • Option replication using put-call parity
  • How to value a derivative using a one-period binomial model

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8. Alternative Investments

CFA Topic

Exam Weight

Approximate Exam Questions

Alternative Investments5-8%9-14

 

Level I Topics to Study for Alternative Investments

  • Categories, characteristics, and compensation structures
  • Performance calculation and appraisals of alternative investments
  • Private capital, real estate, infrastructure, natural resources, and hedge funds

9. Portfolio Management and Wealth Planning

CFA Topic

Exam Weight

Approximate Exam Questions

Portfolio Management and Wealth Planning5-8%9-14

 

Level I Topics to Study for Portfolio Management and Wealth Planning

  • Basics of portfolio management
  • Portfolio risk and returns
  • Basics of portfolio planning and construction
  • Behavioral biases of individuals 
  • Risk management basics
  • Basics of technical analysis
  • Fintech in investment management

10. Ethical and Professional Standards

CFA Topic

Exam Weight

Approximate Exam Questions

Ethical and Professional Standards15-20%27-36

 

Level I Topics to Study for Ethical and Professional Standards

  • Ethics and trust in the investment profession
  • Code of ethics and standards of professional conduct
  • Basics of global investment performance standards (GIPS)
  • Ethics applications

During your final week of studying, browse through each standard and its corresponding guidance in the CFAI Standards of Practice Handbook. This is a prominent portion of the exam that should not be overlooked. Spend your study time wisely in this section and take many practice questions.  

Alternate Order To Study Level I Topics

If you are actively searching or just curious for another way of approaching the material, our experience has found that some candidates have used this order to successfully pass the Level I exam. 

  1. Quantitative Methods (8-12% topic weight)
  2. Portfolio Management and Wealth Planning (5-8% topic weight)
  3. Financial Statement Analysis (13-17% topic weight)
  4. Economics (8-12% topic weight)
  5. Equity Investments (10-12% topic weight)
  6. Fixed Income (10-12% topic weight)
  7. Derivatives (5-8% topic weight)
  8. Alternative Investments (5-8% topic weight)
  9. Corporate Issuers (8-12% topic weight)
  10. Ethical and Professional Standards (15-20% topic weight)

Once again, the order is up to you. As you progress through the material you will discover what works best for you and uncover your strengths and weaknesses. With that said, there are no shortcuts. You must be totally committed and disciplined in your studies to pass this difficult exam. 

When To Start Practicing Multiple Choice Questions?

50% of your total study time should be spent practicing multiple-choice questions. So after you spend time preparing for quants, start practicing multiple-choice questions related to this topic area.

Try Today’s Level I CFA Question

When To Take Mock Exams?

You should start taking mock exams about eight weeks from exam day. This will give you plenty of time to learn how to take CFA exams. Throughout the eight weeks try to take at least four mock exams. Give yourself enough time after each mock exam to evaluate your performance and solidify your test-taking skills on a computer-based exam.

Assess your baseline knowledge of the Level I CFA Program curriculum with a free CFA diagnostic exam

What To Do If You Fall Behind Studying?

The simple answer to this question is: don’t! If you fall behind in the first couple of months, you might be able to add a few more hours per week to your study plan over the course of the six months to get you back on track. 

If you fall behind in the last month of your prep and spend little time practicing multiple-choice questions and taking mock exams, you will definitely go into the CFA exam unprepared and stressed. You may consider requesting a deferral and pay the fee to postpone your scheduled exam to a future exam window.  

To avoid falling behind in the first month of your exam prep, build out a study progress tracker and stay committed to your plan. Remember, you only have to study two times: when you want to, and when you don’t.

Level I Time Management Tips

Tip 1: Start Preparing Early

Set expectations about how much time you are going to need early on in the process. The CFA Program is one of the highest distinctions in the investment management profession. The curriculum for each level is extensive and it’s important to be extremely honest about your knowledge, availability, and test-taking skills.  

Tip 2: Use A Study Progress Tracker

Using a study progress tracker will keep you organized and help you plan for the future. There are ten topics and you’ll need to dedicate a minimum of twelve hours each week preparing for every topic. For most topics, you should give yourself two weeks or twenty-four hours of preparing and practicing time.

Tip 3: Stick To Your Study Plan

Sooner or later you’re going to feel run down and a little burned out. The thought might even cross your mind that maybe the CFA charter isn’t right for you.

This is a good time to take a short break. Don’t answer any practice questions or open a book. Do something you love unrelated to the CFA Program. Taking time for yourself is important to stay focused. 

By giving yourself a few days off, you’ll be surprised at how energized you’ll feel. If you have clear goals and objectives for taking the exam, you’re likely to find yourself strongly motivated to get back to studying, so you can successfully pass.

How to Pass the CFA Exam While Working Full Time >>

Tip 4: Practice Concepts

Even if you have the required technical knowledge, you still need to practice a significant amount of multiple-choice questions, think thousands, in order to apply your knowledge to exam-based questions. The more you can practice, the stronger you will become in applying your knowledge. Answering questions incorrectly outside of the testing center, and identifying why you answered them wrong, may help prevent you from making the same mistakes on exam day.

Ready To Start Preparing for the CFA Exam?

Looking for more guidance on how to prepare for Level I of the CFA exam? Enroll in one of our CFA Level I Premium study packages to receive expert instruction, CFA Program study materials, and more. Give yourself the best chance to prepare, practice, and perform on the CFA exam.

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