CFA® Fixed Income
Summary, Syllabus, Topics, and Sample Questions (L1, L2, L3)

The CFA Institute Fixed Income curriculum covers the largest capital market segment and asset class: fixed income securities, more familiarly known as bonds. These securities are the primary way that institutions, governments, and other entities raise capital around the world.

Fixed income instruments have a broad range of applications for both investors and issuers, including income generation, principal preservation, and asset-liability management. Furthermore, the evaluation of credit risk for fixed income securities has become particularly important for financial analysts in the wake of the global financial crisis of 2008.

The Fixed Income topic is heavily quantitative. It is considered one of the more difficult topics of the CFA exam and remains a heavily weighted topic throughout Levels 1, 2, and 3. The material introduces candidates to a broad range of financial concepts and formulae critical to financial analysis within and outside this topic area.

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Study Tips for CFA Fixed Income

  • If you are a fixed income professional, this section might come more easily for you, but don’t even think about skipping it. Fixed income is critical for every level of the CFA exams.
  • On the other hand, if you are like most CFA candidates and are not a fixed income professional, this will be some of the least familiar, most quantitative, and most difficult material in the curriculum. The silver lining is that it is all quite logical and methodical. Plan to put in the time to thoroughly go over the Fixed Income readings.
  • Level 3 is all about portfolio management, and fixed income instruments are critical to any well-diversified portfolio. The vast bulk of the problems at this level are theoretical. But, you'll also need to do some math.
  • The best advice for both Level 2 and Level 3 is to review and refresh the material from the previous levels.

Visit our CFA Level 1 Study Guide and CFA Level 2 Study Guide for more information.

Frequently Asked Questions

CFA Level 1 Fixed Income is considered one of the more difficult topics on the exam, and for most candidates, it is also one of the least familiar. Fixed income securities are typically more abstract than equity investments. Furthermore, candidates are often more familiar with the stock exchange and equity investments than they are with debt securities.

The earning modules are highly theoretical and laden with novel terms. Candidates are introduced to several methods of bond valuation and complicated concepts related to risk and return analysis. However, having a solid understanding of Fixed Income is critical to the CFA charter.

Like its Level 1 counterpart, the CFA Level 2 Fixed Income is considered one of the more difficult topics on the exam. Fixed income is relatively heavy on both formulas and theory. Candidates will study various formulae used to value bonds with embedded options and the theoretical and practical aspects of the yield curve.

To get the best of both worlds, think about combining the CFA curriculum with a third-party prep provider, like UWorld. The End of Chapter (EOC) questions from the CFA Institute are comprehensive, and third-party study resources are condensed and time-efficient.

For constructed response sessions, you need to practice a lot, ideally in an exam setting. Improve your ability to self-grade essay questions and become a master at responding to them. If you are running short on time, go over the questions and sample answers to complete your review prior to the test. Don’t overlook or undervalue the item set session. This is most likely going to increase your overall score.

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