CFA Level 1 Syllabus

CFA Level 1 EXAM : OVERVIEW

With 180 multiple-choice questions, the Level I exam is split into two 135-minute sessions (session times are approximate). There is an optional break in between each session. An exam result can only be obtained if candidates attend both sessions. Currently, CFA exams are being administered all over India with capacity and other limitations. Because of the ongoing epidemic, candidates who missed the November test can take the online proctored test offered by the CFA Institute (OPT).

 

CFA Level 1 Syllabus

 

Subjects	Topics	Weightage
Alternative Investment	Real estate and Mutual Funds	5%-15%
Derivatives	Derivative Markets and Instruments	5%-15%
Portfolio Management and Wealth Planning	Basics of Portfolio Planning and Construction	5%-15%
Economics	Market and Company Structure Analysis of Supply and Demand Total Production, Prices, and Economic Growth	10%-20%
Corporate Finance	Capital costs Capital Planning	10%-20%
Quantitative Analysis	Applications for Discounted Cash Flow Market returns and statistical ideas related to the time value of money	10%-20%
Fixed Income Analysis	Interest Rate Markets Asset-Backed Securities Introduction to the Valuation of Fixed Income	10%-15%
Equity Investment	Market effectiveness and safety Trading indicators Market Structure and Organization	10%-15%
Financial Reporting analysis	Drafting an income statement and balance sheet Standards and Mechanisms of Financial Reporting	15%-20%
Ethics	Global Standards for Investment Performance A Professional Conduct Code	10%-20%

 

 

Alternative Investments

Real estate, private equity, hedge funds, infrastructure, and commodities are some of the alternative investments addressed in this section. Expect between 9 and 15 questions because the Level I curriculum for alternative investments is introductory in nature and has an exam weight of 5% to 8%. Candidates should take this area seriously because it has recently gained prominence and has a somewhat higher weight in Levels II and III.

 

Derivatives

Only Level I introduces derivatives and portfolio management. Candidates' knowledge of futures, forwards, swaps, options, and derivative hedging strategies will be tested. This subject, like portfolio management, is weighted between 5% and 8% on the Level I exam, translating to between 9 and 15 questions.

 

Fixed Income

The test then covers fixed-income markets and associated instruments after covering stocks. The qualities of various fixed-income instruments, as well as how to price them, must be known to candidates. Convexity, duration, and yield metrics are all important ideas. Structured financial products like mortgage-backed securities and collateralized mortgage obligations are also covered in this section. 10% to 12% of the exam is made up of questions on fixed income.

 

Equity Investments

The topic of stocks is covered in the section, along with equity markets, instruments, and approaches for valuation. Because this topic lays the foundation for Levels II and III of study, candidates should pay close attention to it. 10% to 12% of the Level I exam's questions are on equity, with the majority of them being on analyzing and evaluating organisations.

 

Portfolio Management

The only components of portfolio management covered on the Level I exam are the basics. Key concepts include the Capital Asset Pricing Model and Modern Portfolio Theory. This section, which ranges in size from 9 to 15, serves as practice for Levels II and III, which emphasize applying knowledge of portfolio management.

 

Corporate Issuers

Following financial reporting and analysis is the corporate finance section, which is weighted between 8% and 12% on the Level I test. It introduces corporate governance in addition to funding and investment choices. This subject also highlights the expanding significance of social and environmental concerns in investing. Working capital management cost of capital, leverage, and capital planning are all significant issues.

 

Financial Reporting and Analysis

This is the second-largest section in the Level I exam, ranging from 13% to 17% in weight. Although financial reporting and analysis are considerably less important in the Level II course, it is still important to invest enough time to studying this subject to prepare well for subsequent exams.

Candidates must be able to analyse and grasp basic financial statements, including the balance sheet, income statement, and cash flow statement, as well as ratios and a wide range of more complex subjects, including taxes, long-term assets, inventory analysis, and revenue recognition.

 

Economics

Basic macroeconomic and microeconomic concepts are evaluated in the economics component. A few of them are supply and demand analysis, oligopoly and monopoly market structures, total output, prices, economic growth, and business cycles and how they affect economic activity.

 

Quantitative Methods

The segment on quantitative methods may be intimidating to certain pupils, whereas the ethical component is more scenario-oriented and simple. To succeed in quantitative approaches, a math PhD is not necessary, although a foundation in statistics is unquestionably helpful. Candidates should anticipate 15 to 22 questions involving the quantitative method with a weighted of 8% to 12%. The subjects addressed are meant to give the reader a better knowledge of the analytical techniques and tools needed for financial analysis and investment decision-making.

 

Ethics and Professional Standards

This section covers the code of conduct, professional standards, and the global investment performance requirements (GIPS). The Institute takes this portion of the exam, which comprises between 27 and 36 questions, very seriously. The result on this component may determine whether an applicant passes or fails if their scores on all other topics are low or close to the minimal passing score. One benefit of fully studying ethics is that it helps with Level II and Level III exam preparation.

 

FAQs

1. Is CFA Level 1 tough in 2023?

The CFA exam is a bit difficult if you haven't practiced enough questions and assessed your preparation before the exam. Practice CFA test series papers and get tips to improve the gray areas.

 

1. What are the 10 subjects in CFA Level 1?

10 total CFA Level 1 Exam Topics are Financial Statement Analysis (FSA), Economics (ECO), Quantitative Methods (QM), Corporate Issuers (CI), Equity Investments (EI), Fixed Income (FI), and Derivatives, Various Investments (AI)

 

1. What is CFA Level 1 Expected salary?

The starting salary for a CFA is often between INR 6 and 8 lpa. You might become a hedge fund manager and make INR 15 lpa if you have sufficient wealth management and portfolio management skills.