CFA® Level 1 Exam Topic Weights
Time to Focus

While formulating a concrete plan for your Level 1 preparation, familiarizing yourself with the CFA® Level 1 exam topics is of great importance. And irrespective of the level that you are studying for, curriculum updates naturally become one of the most important things to keep an eye out for. Because the CFA Institute (CFAI®) is known for making frequent (usually yearly) changes to the curriculum, always refer to the most recent versions.

On a quick note in advance, the exam is divided into ten weighted sections. Please keep in mind that even if a section has a lower weight, it does not mean you should spend less time on it.

Let's quickly go over each of these sections:

CFA Level 1 Exam Topics

Before you start studying for the Level 1 exam, make sure that you fulfill all the CFA exam requirements. Moving on, the CFA Level 1 exam tests your knowledge in 10 different sections, including:

  1. Ethical and Professional Standards (ET)
  2. Quantitative Methods (QM)
  3. Economics (EC)
  4. Financial Statement Analysis (FSA)
  5. Corporate Issuers (CI)
  6. Fixed Income (FI)
  7. Portfolio Management (PM)
  8. Equity Valuations (EV)
  9. Derivative Investments (DI)
  10. Alternative Investments (AI)

The foundational ideas, including economics, ethics, quantitative reasoning, and financial accounting, are heavily weighted on the Level 1 exam. The weights, number of readings, and questions for each of the ten topics covered in the exam are listed in the following table:

CFA Level 1 Topics Overview
Topics Weight No. of readings No. of Questions Session Details
Ethical and Professional Standards 15-20% 5 27-36 SESSION 1
  • 2 hours 14 minutes
  • 90 questions
Quantitative Methods 8-12% 6 15-22
Economics 8-12% 7 15-22
Financial Statement Analysis 13-17% 12 24-30
Corporate Issuers 8-12% 5 15-21 SESSION 2
  • 2 hours 14 minutes
  • 90 questions
Fixed Income 10-12% 6 18-22
Portfolio Management 5-8% 7 9-15
Equity Valuations 10-12% 6 18-21
Derivative Investments 5-8% 2 9-15
Alternative Investments 5-8% 1 9-15

Source: CFAI

Ethical and Professional Standards (ET)

[5 readings | No formulas]

Ethical and Professional Standards is a major part of the CFA Program curriculum at all three levels, so it is very important to learn this material well. The CFA Institute places a high value on Ethical and Professional Standards and even uses scores on this section to determine if someone passes or fails when their overall exam result is right at the edge of the Minimum Passing Score. The topic is a CFAI favorite, with approximately 15 to 20% of the total weight , so be ready to spend a good amount of time learning all the Ethical and Professional Standards materials. Read more on this topic at the Ethical and Professional Standards page.

Quantitative Methods (QM)

[6 readings | 100 formulas]

QM, a subject that many candidates perceive to be scary, makes up around 8 to 12% of the total weight of the Level 1 exam. This course covers analytical tools and discounted cash flow analysis, which serve as the foundation for security and asset valuation; their application to quantifying risk in investment decision-making. For a much more detailed read, visit the Quantitative Methods page.

Economics (EC)

[7 readings | 60 formulas]

The fundamental crux of this topic is a basic understanding of micro and macroeconomic concepts, including supply and demand analysis, various market structures, economic growth, and business cycles and their impact on economic activity. Our Economics page contains a thorough discussion of each reading. Economics accounts for 8 to 12% of the Level 1 exam.

Financial Statement Analysis (FSA)

[12 readings| 100 formulas]

FSA is the second-largest topic on the Level 1 exam, accounting for approximately 13 to 17% of the total weight . In addition to analyzing and interpreting primary financial statements, you must be familiar with ratios and concepts such as revenue recognition, long-term assets, and taxes. Visit our page on Financial Statement Analysis for a much more in-depth understanding of the subject.

Corporate Issuers (CI)

[5 readings | 40 formulas]

CI includes key sections like capital budgeting, cost of capital, leverage, and working capital management, carrying about 8 to 12% weight in the exam. The topic gives an overview of corporate governance and investment and financing options. For a lot more specific information, visit the Corporate Issuers page.

Fixed Income (FI)

[6 readings | 40 formulas]

For FI, candidates must understand the characteristics of various Fixed Income securities and how to price them. Among the key concepts are yield measures, duration, and convexity. Fixed income questions account for about 10 to 12% of the test. For more insights into the topic, visit the Fixed Income page.

Portfolio Management (PM)

[7 readings | 50 formulas]

PM involves the concept of investing in a portfolio rather than individual assets to gain an advantage. Portfolios offer significant risk diversification benefits, allowing risk to be decreased without compromising return. Portfolio management accounts for approximately 5 to 8% of the Level 1 exam. The key concepts are Modern Portfolio Theory and the Capital Asset Pricing Model, which also prepare you for Levels 2 and 3. Detailed information is available on the Portfolio Management page.

Equity Valuations (EV)

[6 readings | 50 formulas]

The EV section discusses equity markets and instruments, as well as business valuation tools and techniques. This section is critical because it establishes the foundation for the subsequent levels. The equity questions on the Level 1 exam account for about 10 to 12% of the test. Please visit the page on Equity Valuation for much more in-depth information.

Derivative Investments (DI)

[2 readings | 40 formulas]

Derivatives, like Portfolio Management, are only introduced in Level 1. Candidates will be tested on the fundamentals of futures, forwards, swaps, options, and derivative hedging techniques. This section, like Portfolio Management, carries only a 5 to 8% weight in the Level 1 exam. Visit the Derivative Investments page for more information.

Alternative Investments (AI)

[1 reading | 10 formulas]

Alternative investments are investments used in addition to standard long-only stock, bond, and cash positions. Hedge funds, private capital, natural resources, real estate, and infrastructure are the five primary areas of Alternative Investments. The Level 1 curriculum for Alternative Investments is introductory, with an exam weight of 5 to 8%. Want to know more about the topic ? Visit the Alternative Investments page.

Note: You might notice an update in the names of some topics. Since the change is very recent, it might be helpful for you to get briefed on the recent CFA curriculum changes.

SimpleSheets are your easy access to Level 1 formulas!

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Analyzing CFA Level 1 Topics: Important, Easiest, and Hardest

Is it necessary for me to follow the prescribed order of study? Should I handle all subjects equally, or are there those that deserve extra attention? Before diving into a subject, what should I know? Do I need to dedicate extra time to re-reading the topics? These are some of the most frequently asked questions by new candidates. While the exam topics and their difficulty can be subjective, the deciding factor for which topic is most complex or effortless depends mainly on the historical candidate performance data.

Level 1 Important Topics

Even though all the topics and their preparation are equally important to acing the CFA Level 1 exam, there are some that might need a bit extra attention.

  • Ethics - Many candidates are terrified of Ethics, mainly because of the subjective nature of the questions, which in turn cannot be quantified. Only those with a thorough understanding of the concepts can correctly analyze and attempt the questions.
  • Financial Statement Analysis - The Level 1 exam focuses on knowledge and comprehension and requires you to learn a lot of terms and understand what FRA is all about. As many as 26 of the 180 exam questions for the level 1 CFA exams in 2023 will be FRA questions. Apart from Ethical and Professional Standards, no other level 1 topic is tested so rigorously.
  • Quantitative Methods - QM covers significant areas like money's time value, probability basics, descriptive statistics, and statistical inference. Apart from these, numerous quantitative tools in Quantitative Methods are used in other Level 1 topics as well.

Level 1 Hardest Topics

Fixed Income, Derivatives, and Financial Reporting Analysis have always been considered one of the hardest topics for the Level 1 exam. The reason is that these topics demand a lot of reading time and extensive calculations.

  • Financial Statement Analysis - The most challenging aspect of Financial Reporting and Analysis is likely not the content itself but rather the abundance of information. To begin with, there are numerous differences and similarities in learning. They are treated differently depending on whether they are reported under IFRS (International Financial Reporting Standards) or US GAAP (Generally Accepted Accounting Principles), adding to complexity in topic.
  • Fixed Income- Many readings in FSA are purely theory-based and are filled with terms. Readings like the bond valuation are complex and lengthy and full of complex formulas.
  • Derivatives- The most challenging task will most likely be understanding how options work. There are numerous options, each with unique characteristics. These options are called contingent claims because the long will exercise the option and require the short to complete the transaction only if it is profitable for the long.

Level 1 Easiest Topics

Again, determining what topic is the easiest is very subjective. However, based on the topic weight, the number of readings, and the number of formulas involved, we have boiled down the list to three topics:

  • Portfolio Management- If you prepare QM well, Portfolio Management becomes relatively easy. This is because both the topics share some readings, making a perfect inter-topic connection. Once you manage the inter-topic readings, rest everything in PM is pure theory.
  • Corporate Finance- Corporate Finance may be the most manageable Level 1 topic due to borrowed concepts, intuitive CF issues, and simple formulas.
  • Equity - Since the topic is mostly theoretical with not many calculations, candidates find the topic comparatively easier.

Historical Changes and Revisions to the CFA Level 1 Topics

The CFAI updates the material covered in the CFA exam on an annual basis to keep up with current topics and challenges that professionals in the investment management industry face.

Knowing what information has changed and if topic weights have been adjusted is critical because you don't want your CFA prep materials to be out of date. This is especially important in case you failed the CFA exam on your previous attempt. In short, there have been numerous minor updates to the Level 1 curriculum, but nothing major. Some notable changes include:

  1. The environmental, social, and governance (ESG) coverage at Level 1 has been updated and expanded to include the most recent developments and their impact on investment management.
  2. The Quantitative Methods topic area has been updated to be more engaging and digitally friendly. It now includes code snippets as well as Excel commands to help with data presentation.
  3. Fixed income readings were revised across all levels to ensure readability and consistency.
  4. The Alternative Investments readings have been updated to include a new introductory reading.
Topics/Weight 2018 2019 2020 2021 2022 2023
Ethical and Professional Standards 15% 15% 15% 15-20% 15-20% 15-20%
Quantitative Methods 12% 10% 10% 8-12% 8-12% 8-12%
Economics 10% 10% 10% 8-12% 8-12% 8-12%
Financial Statement Analysis 20% 15% 15% 13-17% 13-17% 13-17%
Corporate Issuers 7% 10% 10% 8-12% 8-12% 8-12%
Fixed Income 10% 11% 11% 10-12% 10-12% 10-12%
Portfolio Management 7% 6% 6% 5-8% 5-8% 5-8%
Equity Valuation 10% 11% 11% 10-12% 10-12% 10-12%
Derivative Investments 5% 6% 6% 5-8% 5-8% 5-8%
Alternative Investments 4% 6% 6% 5-8% 5-8% 5-8%
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There is no right answer when it comes to prioritizing a particular topic. But on the basis of the topic weight, difficulty, and reading time required, here’s an order we would recommend:

  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

Again, this is just a suggestion, and it is totally up to you to change and revise the order as per your comfort.

Here is an estimate of the calculator usage for each topic in the CFA Level 1 exam:

  1. Quant          80-90%
  2. Corporate Issuers     60-70%
  3. Equity          40-50%
  4. FRA           40-50%
  5. Eco           30-40%
  6. Portfolio Management   20-30%
  7. Fixed Income         20-30%
  8. Alternative investment   10-20%
  9. Derivatives        5-8%
  10. Ethics           0%

For the CFA Level 1 exam, a big chunk of math will be in Quantitative Methods (probability, time series analysis, hypothesis testing, correlations, mean/variance analysis, cash flows, etc.), followed by Derivatives and Fixed Income, Portfolio Management, and Economics.

Read More About the CFA Exam

Need a consolidated list of CFA exam requirements? Here are the detailed eligibility criteria and requirements that will prevent any hurdles in your application process.

Are the changing CFA exam dates getting on your nerves? Here’s a handy list of new dates and frequencies to help keep your preparation on track.

Looking to register for the CFA exam? Need to know the particulars of the same? Learn more about the registration, the costs involved, and the fee structure.

Are you planning to take the CFA exam? Visit this quick guide for detailed information on everything you need to know and fulfill before sitting for the exam.

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