CFA® Equity Valuation

Summary, Syllabus, Topics, and Sample Questions (L1, L2, L3)

Equity investments, that is, stocks, are probably the most familiar asset to investors worldwide. Whether public or private, equity capitalizes every business endeavor and is ubiquitous in investor portfolios. The nature and valuation of equity, along with equity markets, investments, and investors, are explored in this CFA topic area. As it progresses toward L3, equity valuation principles, models, and techniques become more of the focus of the curriculum. At each successive Program level, models and applications are explored in more depth and detail. In the L3 curriculum, the focus is more on equities’ role in portfolio management.

CFA Equity Valuation Study Tips

  • Much of the Level 3 material assumes the depths and breadths of the Levels 1 and 2 curricula, so a solid review may be in order, especially if you've taken some time off between exams. 
  • Plan to cover this material thoroughly based on its complexity and weight on the exam. The Level 3 exam is all about portfolio management, and equity is a serious component of any portfolio–and the exam.
  • When CFA candidates have work experience in finance and/or investing, most often, it's in equity. But even if you've been in the business, don't skip this topic since it has a relatively high exam weight. Although Level 3 Equity focuses more on strategic uses of its asset class, you'll still have to do the math, so be prepared.

Visit our CFA Level 1 study guide and CFA Level 2 study guide for more information.

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Frequently Asked Questions

The Equity Investments curriculum contains nearly 15 formulas in its learning modules, but there is quite a bit of “basic” information on markets and trading as well. Equity is often considered one of the most difficult and important topics of the CFA Level 1. However, past experience with equity valuation should provide an advantage.
After moving through a QBank the best method to monitor your current understanding of the content is to try mock exams. UWorld’s CFA Mock Exams closely replicate the actual CFA L1 exam experience to help you prepare and boost your confidence on test day. Like the actual CFA exam, our mock exams consist of two 2-hour, 15-minute sessions, each with 90 multiple-choice questions spanning multiple subjects that are not included in the standard QBank. Take a look at our CFA L1 Formula sheet page for further resources and tips.
In contrast to Level 1, Equity Valuation at Level 2 focuses on a wider range of topics and goes deeper into each over its 6 readings. It is often considered one of the most difficult and important topics of the CFA Level 2. Consider this when allocating study time to the readings.
In contrast to Level 2, Equity Portfolio Management on Level 3 focuses on managing portfolios. It is often considered one of the most difficult and important topics of the CFA Level 3. Consider this when allocating study time to the readings.
Enhance your CFA Level 3 preparation by progressing through a QBank followed by mock exams. UWorld’s CFA Level 3 test prep is designed to closely mirror the actual exam experience, providing invaluable insights and readiness for exam day. Stay well-informed and thoroughly prepared for success.

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