CFA® Fixed Income

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

The CFA® Institute Fixed Income curriculum covers the largest capital market segment and asset class: fixed income securities. 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.

What is Fixed Income in CFA?

Fixed Income refers to investment securities created by borrowing; they are leases, loans, or bonds that provide interest and/or principal repayments to investors for a specified time (until the security matures), at which point investors recoup their principal. Issuers are typically governments, institutions, or corporations seeking to raise funds. Financial analysts must assess the risks and rewards of fixed income securities for both issuers and investors.

CFA Fixed Income Study Tips for L1, L2, and L3

If you are a fixed income professional, this section might come easy for you. On the other hand, if you are not, 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. Not only will this make your life much simpler in L1, but it will also help you save time in L2 and L3. 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.

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