CFA® Level 1 Exam Study Guide

Aiming for the Charter

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.

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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:

  1. Six-month plan (25-week plan)
  2. Two-month plan (8-week plan)
  3. 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:

  1. Stay informed of the latest curriculum updates (additions, revisions, and eliminations).
  2. Ensure you have satisfied all the eligibility criteria and have all the proper documents at your disposal.
  3. Ensure that you indeed have one of the approved calculators, and make it a habit to practice on it while you prepare.
  4. 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.
  5. 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.

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:

  1. Start early and remove any temptation to procrastinate
  2. Practice: practice questions in both the QBanks and mocks
  3. Aim for 70%, but don't get caught up too much in the scoring
  4. When you guess at a question and get it correct; mark that question as requiring additional study
  5. Focus on the areas identified as opportunities by the performance reporting tools
  6. Join a study group, or ask your society for additional candidate resources
  7. Build up your test-taking endurance by taking the mocks in an exam environment: Stay within the time limits, no interruptions
  8. Work with your calculator until it becomes second nature
  9. 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
  10. Make sure you have covered all the topics at least once
  11. Leave a month at the end for review, longer if possible
  12. And last, celebrate study plan milestones along the journey!
Study Order

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:

  1. Quantitative Methods
  2. Financial Reporting and Analysis
  3. Fixed Income
  4. Equity
  5. Alternative Investments
  6. Derivatives
  7. Corporate Finance/Corporate Issuers
  8. Portfolio Management
  9. Economics
  10. 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 2022 CFA Level 1 exam looked something like this:

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 February 2022 window.

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Read More About the CFA Level 1

All set to take the first step towards earning the CFA charter? Here’s all about the CFA Level 1 exam, the number of subject topics, historical pass rates, and much more.
Looking to learn about the subject topic in detail? Here’s comprehensive information on all the CFA Level 1 exam topics, including the topic weights, the pass rates, and more.
Need a concise, one-stop destination for a better understanding and retention of all the formulas for the Level 1 exam? Here’s all you will need to step up your calculation game.
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