CFA® Level 1 Exam Study Guide
Now that you have decided to register for the CFA® exams, the immediate next step is to search for the best study materials and, most importantly, devise a concrete study plan suited to your time and taste.
But then, with the internet at your disposal, how difficult could it get?
Given how robust the internet is when it comes to test prep courses and review books for CFA, the impending confusion that it brings—with so many resources online, knowing which one to rely on is essential—can be a great worry. And since the CFA Level 1 exam is the stepping stone to obtaining the charter, acing it becomes your utmost priority.
Planning Your CFA Level 1 Exam Preparation
Before anything, let us address the "mammoth" in the room: the massive study material one needs to refer to pass the CFA Level 1 exam. Undoubtedly, it is enormous and, at times, can get mind-boggling. Memorizing all the formulas, reading thousands of pages, and keeping up-to-date with the exam changes are only the tip of the iceberg.
And to top this all off, keeping track of time and then using it wisely becomes of utmost importance. CFAI® recommends an ideal 300+ hours of study sessions per level while preparing for the exam.
Here's a representation of how you can divide your 300+ hours of study sessions over a six-month (25-week) period:
| Topics | Exam Weight | Study Hours | Allocated Weeks |
|---|---|---|---|
| Ethical and Professional Standards | 15-20% | 32 | 3 |
| Quantitative Methods | 8-12% | 39 | 3.25 |
| Economics | 8-12% | 28 | 2.5 |
| Financial Statement Analysis | 13-17% | 46 | 3.75 |
| Corporate Issuers | 8-12% | 24 | 2 |
| Portfolio Management | 5-8% | 18 | 1.5 |
| Equity Investments | 10-12% | 23 | 2 |
| Fixed Income | 10-12% | 29 | 2.5 |
| Derivatives | 5-8% | 18 | 1.5 |
| Alternative Investments | 5-8% | 11 | 1 |
| Mock exams | 32 | 2 | |
| Total | 100% | 300 hours | 25 |
A six-month schedule has you studying for 25 weeks at about 12 hours per week, which gives you time to absorb the material. At this pace, studying is a commitment but not a burden. But is 300 hours sufficient? CFA Institute notes that it seems to be a minimum for successful candidates, but it certainly does not guarantee success. That is why it is great to have an organized study plan that helps establish a balanced study approach and accommodates “the rest of your life” in the schedule.
To ease up the process and incorporate a lot of flexibility into your schedule, we have devised the following study plans that you can refer to:
- Six-month plan (25-week plan)
- Two-month plan (8-week plan)
- One-month plan (4-week plan)
Let's get into the details then.
Gentle Reminders
Checking the basic CFA exam requirements beforehand can help save a lot of time and, most importantly, eliminate last-minute panic.
Here are some brief prerequisites / reminders that might come in handy:
- Stay informed of the latest curriculum updates (additions, revisions, and eliminations).
- Ensure you have satisfied all the eligibility criteria and have all the proper documents at your disposal.
- Ensure that you indeed have one of the approved calculators, and make it a habit to practice on it while you prepare.
- Go through the previous pass rates. This will give you an idea of the amount of preparation needed as you evaluate your performance on the QBanks and mock exams.
- Understand that the CFA exam is challenging: a majority of candidates will fail the exam. Prepare yourself mentally for the commitments and potential sacrifices that are necessary to pass the exam.
Now that you know some of the essential prerequisites, let's find a schedule that meets your needs.
Six-Month Plan
Level 1 candidates usually begin their preparation four or five months before their CFA exam. Objectively speaking, it is hard to finish the curriculum in its entirety even within this period, especially if you have a job, a family, and other daily commitments to attend to. But allowing for six months can make things a bit easier, and gives you space to adapt to unforeseen changes as they arise.
Some items to review during this period include:- CFAI prescribed chapters and readings
- QBanks, mock exams, and flashcards
- If you have some background in finance or accounting, you may want to start with a mock exam in order to find your weak points, then plan to tackle those topics first, followed by a review of your stronger topics
- If your background is not in finance or accounting, this can still work – just dive in to any area but be sure to plan your time so you can cover them all
- Leave about a month at the end of the schedule to bear down on the mock exams and review your weak spots
Two-Month (9 weeks) Plan
When you are 60 days away from your scheduled CFA Level 1 Exam, you can’t expect to cover the comprehensive CFA curriculum. However, you may be able to cover enough material to pass, especially if you have a background–education or work experience–in finance or if you are taking the exam for the second time.
We recommend:- Take at least one of CFA Institute’s and/or UWorld’s mock exams
- Review topics where you score less than 70%
- Review your custom flashcards and formula sheets
- Repeat sections previously identified as opportunity areas
One Month Plan
If you’re reading this and you have 30 days until the exam, you should already be working on quizzes and practice questions in preparation for the Level 1 exam, which is just a month away. If this is not the case, take a deep breath and get to work.
Start concentrating on practice exams one month before the exam by taking them many times. If you’re utilizing our UWorld CFA Level 1 Mock Exams, ensure you take these after you’ve finished our QBank within one month of your exam; this will also allow you to complete the mock tests included in the CFA Institute resources. It is essential to ensure you optimize your chances of success by utilizing the resources that will assist you in simulating the test. Candidates also have the option of choosing from a variety of options supplied by the program to prepare for the CFA Exam.
UWorld Study Methodology and Its Benefits
UWorld's content is produced by full-time, experienced charterholders and covers all Level 1 learning outcome statements (LOS). The content is delivered on a flexible, user-friendly digital interface with customizable learning tools that use Active-Learning: a straightforward method that has been proven to assist students in preparing for high-stakes tests.
Active learning advantages include increased student results and excellent rates of knowledge retention. These advantages, along with cutting-edge user interfaces and digital study aids, have assisted millions of students from other fields in learning key subjects and preparing for tests. UWorld can now offer its proven methods for CFA prep. When it comes to your exam day, you will feel confident after repeatedly practicing thousands of questions in exam-like settings.
Each question in UWorld's CFA QBank and mock exams is meticulously developed, focusing on quality and depth; they survive a stiff peer review process before being authorized for professional copy editing and illustration, and making it into the UWorld QBank. And it doesn't end there: Candidate input is an essential element of UWorld's continuing development process, bringing constant improvement to the quality of our learning platform.
With UWorld's study prep, you are leveraging the knowledge of our content team with close to 200 years, collectively, of professional experience in the finance industry and/or academia. You also have the assurance that UWorld is a CFAI Approved Prep Provider and adheres to the standards required to keep this status every year.
Bonus Preparation Tips
Even after hours of preparation, it's normal to feel anxious when facing your first CFA exam.The last-minute confusion (if any) sure can get a bit tricky, but there's nothing to worry about since we are here to assist you.
Here are some bonus CFA Level 1 tips to help you enhance your confidence.
When preparing for the exam:
- Start early and remove any temptation to procrastinate
- Practice: practice questions in both the QBanks and mocks
- Aim for 70%, but don't get caught up too much in the scoring
- When you guess at a question and get it correct; mark that question as requiring additional study
- Focus on the areas identified as opportunities by the performance reporting tools
- Join a study group, or ask your society for additional candidate resources
- Build up your test-taking endurance by taking the mocks in an exam environment: Stay within the time limits, no interruptions
- Work with your calculator until it becomes second nature
- Know where your test center is and how to get there. Do a trial run on getting to the test center: time your journey, allowing for public transportation, traffic, parking, etc. The last thing you want to do is arrive for your exam late and/or flustered by the unexpected hassle of getting there
- Make sure you have covered all the topics at least once
- Leave a month at the end for review, longer if possible
- And last, celebrate study plan milestones along the journey!
There is no correct answer when prioritizing a particular topic. But based on the topic weight, difficulty, and reading time required, here's an order that can be effective:
- Quantitative Methods
- Financial Reporting and Analysis
- Fixed Income
- Equity
- Alternative Investments
- Derivatives
- Corporate Finance/Corporate Issuers
- Portfolio Management
- Economics
- Ethical and Professional Standards
However, if you have some background in any of these topics, you may want to tackle the topics you are unfamiliar with first, and circle back to review those you already know.
CFA Level 1 Overview / Refresher
The CFA Level 1 exam focuses on fundamental knowledge and understanding of investment valuation and portfolio management tools and concepts.
The curriculum is divided into ten topic areas and is tested in two separate sections in the exam. The first session of the CFA Level 1 exam covers four topics: Ethics, Quantitative Methods, Economics, and Financial Statement Analysis. Then the second session covers the remaining six topics: Corporate Issuers, Equity, Fixed Income, Derivatives, Alternative Investments, and Portfolio Management. The weights for each topic continue to vary each year.
The topic weights for the 2023 CFA Level 1 exam look something like this:
CFA Level 1 Exam Topic Weights (2023)
Minimum Weight - Maximum Weight
The Level 1 exam requires a deep and broad understanding of the subject matter. Even candidates with a Finance undergraduate degree will find only a limited overlap with that curriculum. And the pass rate certainly supports that theory—only 36% of candidates passed the CFA Level 1 exam in the November 2022 window.
Read More About the CFA Level 1
Worried about missing out on important dates for the CFA exam? Here’s a handy list of new dates and frequencies to ensure seamless preparation.