The curriculum for Level I of the CFA program spans 10 topic areas, namely ethical and professional standards, quantitative methods, economics, financial reporting and analysis, corporate finance, equity investments, fixed income, derivatives, alternative investments, and portfolio management.
The curriculum for Level 1 is further divided into 19 sessions each of which contain one or more readings (chapters).
The suggested weightage of each topic area and the associated study sessions are given below:
| Topic area | Study Sessions | Minimum | Maximum |
|---|---|---|---|
| Ethical and Professional Standards | 1 | 15% | 20% |
| Quantitative Methods | 2 & 3 | 8% | 12% |
| Economics | 4 & 5 | 8% | 12% |
| Financial Reporting and Analysis | 6, 7, 8 & 9 | 13% | 17% |
| Corporate finance | 10 & 11 | 8% | 12% |
| Equity Investments | 12 & 13 | 10% | 12% |
| Fixed Income | 14 & 15 | 10% | 12% |
| Derivatives | 16 | 5% | 8% |
| Alternative Investments | 17 | 5% | 8% |
| Portfolio Management | 18 & 19 | 5% | 8% |
Each reading contains multiple Learning Outcome Statements (LOSs) which specify the target takeaways for the candidates.
You can find the LOSs here: CFA Level 1 Study Sessions and Learning Outcome Statements. It provides LOSs contained in each study session separately and all the LOSs of Level 1 combined in a single PDF. Due to Covid-19, the CFA Institute deferred introduction of 2021 LOSs. Hence, 2021 exams will be conducted based on 2020 curriculum and study sessions.
What to expect in Level 1?
Level I is mainly about the breadth of the CFA program. It acts as the foundation for more rigorous and specialized study at Level II and Level III. In preparing for the exam, candidates should focus on the action verbs used, i.e. describe, calculate, interpret, etc. to see what they are expected to learn related to a given topic.
The following table shows occurrence of different action verbs in the CFA Level 1 LOSs:
| Action | Count | Percentage |
|---|---|---|
| Describe | 233 | 36% |
| Explain | 110 | 17% |
| Calculate | 88 | 13% |
| Interpret | 83 | 13% |
| Compare | 41 | 6% |
| Distinguish | 40 | 6% |
| Define | 25 | 4% |
| Identify | 21 | 3% |
| Determine | 12 | 2% |
It shows that in roughly 2/3 of the questions, you are expected to explain, describe or compare the underlying theory and in 1/3 cases, you will need to crunch numbers or interpret calculated reports. This shows that even though learning the formulas and calculating results are important, knowing the breadth and depth of the curriculum is also important to pass the exam.
But this leaves us with another problem. The official curriculum of Level 1 of the CFA program is over 3,500 pages. If we assume 150 pages contain general non-LOS information or are blank, we have 3,350 pages to cover. If a candidate has 5 months till exam out of which he wants to leave 1 month for revision, even a first read of the curriculum would need to be at a rate of 27 pages per day [=3,350/120]. As the content may be dense/complex at times, it is hard to chug along without any external study aid.
Our CFA Level 1 – Master Plan provides you 400+ pages of study notes and 2,200+ practice questions. These are exclusively authored by a CFA charter-holder and specifically tailored to the Learning Outcome Statements (LOSs) which allows them to be crisp but effective.
Sign up today for a 180-day access to our notes and quizzes here or attempt our free mock exam.