Unpacking the CFA Level 1 Syllabus: A Guide

Your resume gets instant credibility.

You are on the track to rapid career growth.

You get interviews with top investment companies.

The above points may seem like a dream come true for most finance aspirants, but to CFA students, it is a reality in the making.

The chartered financial analyst program is the gold standard in investment banking certification, with over 190,000 charterholders in over 165 countries. This number is expanding daily as more and more students recognise the value of a CFA certification. While the CFA has three levels, you don’t have to clear all of them to get hired. Each Level is complete on its own and makes you eligible to find a job. The CFA level 1 syllabus offers students an in-depth education in finance and investments. There is a strong focus on industry expertise and skills.

The CFA subjects are suited for students who want to work in the buy side or sell side markets. Companies are offering job positions for those who have cleared Level 1. To truly understand why, let’s take a closer look at the CFA Level 1 syllabus.

Benefits of studying the CFA level 1 syllabus

• In-depth understanding of core finance concepts and investment analysis.
• Huge focus on ethics and professional standards.
• Gain knowledge of the global economy and finance.
• Can apply for jobs with multinational banks, leading investment firms, insurance agencies, etc.
• Salaries expectations are in the range between Rs 4 to Rs 10 lakhs.

Also Read – Eligibility for CFA & when to start preparing for it (Updated 2023)

Unpacking the CFA Level 1 syllabus

1. Ethical and professional standards

Ethics play a huge role in the foundation of the CFA course. The CFA board considers integrity and moral code one of the defining values of a CFA holder.

The finance industry runs on trust. Without a moral code or ethical standards, the industry will collapse. The regulations must be followed by every finance professional. You will be expected to know when a violation occurs and how to give advice that is by the law.

In the CFA level 1 syllabus, the ethics and professional standards subject is only around 50 pages. The examiners take this section very seriously and so should you, if you want to become a respected finance analyst. The topic constitutes 15 to 20 per cent of the exam and contains between 27 to 36 questions.

2. Financial statement analysis

Finance statements may be the primary domain of accountants, but they are equally vital for financial analysts. Often, companies conduct M&A deals, work on cross-border business projects and need liquidity. It helps to have knowledge of various financial statements and how to read them. Some organisations use the IFRS code, while others follow the US GAAP or IndAS. CFA-trained professionals understand the differences in these systems and can decipher financial information. Whether you are on the buy-side or sell-side, it is imperative you can read financial statements.

The CFA Level 1 syllabus covers balance sheets, cash flow statements, income statements and other comprehensive income. The subject is an essential skill for financial analysts and accounts for 6 to 9 per cent of the exam, that makes up 23 to 31 questions.

Also Read – 6 Important CFA Updates & Curriculum Changes Announced in 2023

3. Equity investments

A large part of a financial analyst’s job is to invest in stocks and equity, especially if you are working in buy-side markets. You need to understand how the industry works, how to determine the value of potential investments and make strategic, long-term decisions. The CFA Level 1 syllabus teaches about security market indexes, industry and company analysis and equity evaluation.

You also learn to calculate the risks and analyse the factors that could affect your investment. The subject takes up 6 to 9 per cent of the exam, which is around 18 to 22 questions.

4. Fixed Income

The CFA Level 1 syllabus includes learning about different fixed-income investments, such as fixed deposits and bonds. CFA students study the various features of fixed-income investments and how to review potential options before making a suitable decision.

The course helps to understand how interest rate movements can affect the value of a fixed-income investment. There are also calculations required in this subject to gauge valuation and risks.

Fixed income takes up 10 to 12 per cent of the Level 1 exam, which is around 11 to 14 questions.

Did you know, 84% of our students recommend that you join us for your CFA Prep

5. Quantitative methods

You learn a lot about different analytical tools in the CFA level 1 syllabus. It is an important topic as what is taught in the first level will be incorporated in the other two as well. It is crucial to understand the technique of crunching numbers as it forms an integral part of investment strategies. Some of the concepts and tools taught are probability concepts, linear regression, sampling and estimations, hypothesis testing and the organising and describing of data.

This is a relevant topic as it is significant from the sell-side and well as buy-side perspectives. Many analysts use these methods for asset valuation. It forms the basis for all your strategic decisions and planning, so you should know your tools and techniques. Around 6 to 9 per cent of the exam focuses on quantitative methods, which means you answer 14 to 22 questions.

6. Economics

The CFA Level 1 syllabus lays down a strong foundation in economics for budding finance professionals. This topic is vital for understanding how the finance industry works.

It also gives candidates a global context and a wider perspective on what is happening in the world. Economics is the mother of finance. If you don’t understand the core concepts, you might struggle with the other subjects. Topics include demand and supply analysis, market structures and understanding business cycles. The CFA Level 1 syllabus assumes you know the basics already. So if you have never studied economics before, you may need to give this subject extra attention. It takes up 8 to 12 per cent of your exam, which amounts to 14 to 22 questions.

Also Read – A Detailed Guide On Work Experience Requirements For CFA

7. Corporate issuers

How do companies make financing decisions? It is critical to understand this perspective as a financial analyst. The CFA Level 1 syllabus includes corporate issuers as a subject that delves into corporate policies as well as investment choices. The topic also includes technical terms and calculations required for proper assessments. Students learn about business models, capital investments and corporate governance. Corporate issuers cover 11 to 14 per cent of the Level 1 exam, so you’ll have to answer around 14 to 22 questions.

8. Derivatives

Derivatives are used by portfolio managers and traders who work in risk management. The topic introduces students to investment options beyond equity and fixed income. CFA Level 1 syllabus offers a strong understanding of derivatives, even though it is only 11 to 14 per cent of the exam, with 9 to 15 questions.

Our expert faculty helps you cover all the 10 subjects and retain them with ease. 

9. Alternative Investments

The CFA Level 1 syllabus is very thorough in teaching students about all kinds of investments. It is imperative, as a financial analyst, to be aware of all potential options before making an informed decision. The alternative investment market is quite big, and it includes real estate, commodities, hedge funds, natural resources and private capital. The subjects cover all these areas and ensure students are well educated. It only takes up 5 to 8 per cent of the exam, which is 9 to 15 questions. However, if you know your material, you can score well in this section and improve your overall grade.

10. Portfolio management and wealth planning

If you want to work on the buy side, this is a crucial subject for you. Although portfolio management and wealth planning are a small part of the exam, it is still very relevant. The CFA Level 1 syllabus offers a fundamental introduction to the topic, which gets more advanced as you move on to Levels 2 and 3. The subject covers portfolio risk and returns, risk management and technical analysis. Around 7 to 10 per cent of the Level 1 exam involves portfolio management, so expect between 9 to 15 questions.

About Proschool’s CFA Level 1 course

Rated as one of India’s premier coaching institutes, Proschool offers comprehensive training in the CFA Level 1. The teaching staff comprises industry experts and CFA charterholders who cover all ten subjects for the exam. They use hands-on training and active learning methods to ensure students efficiently learn the course material. The focus is on learning beyond the textbook, understanding complex concepts and enhancing technical skills. During the exam, students are more than prepared to deal with the tough questions and clear the course.

Course details:

• The CFA level 1 syllabus is taught in classrooms across major cities in India.
• You can also opt for online sessions.
• Additional resources such as practice papers, mock exams, learning videos and study books are available.
• Proschool’s placement program gives Level 1 certified candidates access to hundreds of jobs.
• Students also receive in-depth training for interviews and resume writing.

FAQs

Can I get a job after clearing CFA level 1?

Yes. Many companies offer internships or entry-level jobs for CFA level 1 holders.

You can work in equity research, asset management and investment banking. However, it is better to finish all three levels of CFA at some point, if you want to move up in your career.

Should I study for the CFA exam by myself or with a coaching class?

While it is possible to study the CFA Level 1 by yourself, you need to be highly dedicated and organised to ensure you do the needful. A coaching centre is a better alternative for students who lack the discipline or time to self-study. You also get other benefits. Your queries are solved, complex subjects are simplified and there are plenty of practice tests to get you ready.

How much time do I need to study for the Level 1 exam?

The CFA board recommends you spend a minimum of 300 hours or six months studying the CFA Level 1 syllabus. However, it varies from person to person. Some may need more time, others need less. A good coaching centre can also help you efficiently use your time.

In conclusion

The CFA Level 1 syllabus lays the groundwork for Levels 2 and 3. However, it is also a superb standalone course as it extensively teaches relevant industry knowledge and skills, making you employable in many finance sectors. While Level 1 does have its challenges, if you plan ahead and prepare yourself, you will be sure to clear the exam with flying colours.