CFA Level 1 – Your Ultimate Guide to Exam Structure, Fees, Syllabus, Prep, Classes & More

The Chartered Financial Analyst (CFA) program is a well-known professional certification offered by the CFA Institute in the United States. The CFA exam tests the knowledge and ethical standards of those seeking finance jobs.

The CFA program has three levels, starting with Level 1 for those new to the finance field. This guide will give you all the details about the CFA Level 1 exam, including who can take it and how to prepare. We will also explain how the CFA certification can benefit your career.

CFA Level 1 Exam Structure

The Chartered Financial Abalyst Level 1 exam has 180 multiple-choice questions, split into two sections with 90 questions each. Candidates have 2 hours and 15 minutes to finish each section, for a total exam time of 4 hours and 30 minutes, including an optional break between the two sections.

Exam Sections and Weightage

The CFA Level 1 exam includes ten topic areas, each contributing a specific percentage to the overall score.

• Ethical and Professional Standards: 15 — 20%
• Financial Statement Analysis: 11-14%
• Equity Investments: 11-14%
• Fixed Income: 11-14%
• Quantitative Methods: 6-9%
• Economics: 6-9%
• Corporate Issuers: 6-9%
• Derivatives: 5-8%
• Alternative Investments: 7-10%
• Portfolio Management and Wealth Planning: 8-12%

These weightages indicate the proportion of exam questions that will be dedicated to each subject area. Candidates should allocate their study time accordingly to ensure comprehensive preparation across all topics.

Chartered Financial Analyst Level 1 Question Types and Difficulty Level

The CFA Level 1 exam is composed of multiple-choice questions designed to assess a candidate’s understanding of a wide range of financial and investment concepts. Here’s an overview of the question types and the general difficulty level:

Question Types

• Multiple-Choice Questions – The exam consists of 180 multiple-choice questions, divided into two sessions of 90 questions each. Each question provides three possible answers, and candidates must select the most appropriate one. The questions are designed to test knowledge, comprehension, and application of the material covered in the CFA curriculum.
• Difficulty Level – The difficulty level varies, with some questions being straightforward and others more complex. Questions can range from basic definitions and concepts to more challenging analytical problems that require deeper understanding and application.

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Grading and Passing Rate For Chartered Financial Analyst Level 1

After completing the CFA Level I exam, candidates will receive a result indicating either “pass” or “fail,” along with information on their performance in each topic area. Candidates who pass Level III will not receive detailed results.

Upon receiving their exam results, candidates can refer to the CFA Institute exam performance guide to interpret their results report effectively. The CFA Institute will notify candidates when their official exam results are available.

Candidates who do not pass are encouraged to use the exam result information to guide their studies and prepare for a retake at a later date. There is no rush to register for the next exam, allowing candidates to take as much time as needed to prepare adequately.

Here are the pass rates for the CFA Level I exam for the specified exam dates:

• May 2023: 39%
• August 2023: 37%
• November 2023: 35%
• February 2024: 44%

Also Read – Breaking Down CFA Pass Rates by Levels and Years

Fees (CFA Level 1 Cost)

Exam Registration Fees

Study Material Costs

Candidates who register for the CFA exam gain access to CFA Institute study materials in electronic format as part of their registration fee. Additionally, print versions of the CFA curriculum are available for purchase by registered candidates at a cost of US$299, plus any applicable customs and shipping fees.

When you enroll for CFA classes at IMS Proschool, you get more than just study materials—you get access to 5 mock tests and over 2000 practice questions, providing ample opportunities to assess your knowledge and readiness for the exam.

The exam fee for the CFA includes the cost of e-books, ensuring that candidates have access to digital study materials as part of their registration.

However, if you prefer physical study materials over digital formats, you have the option to purchase a printed version of the CFA curriculum. This allows you to study using traditional printed materials if that better suits your learning style or preferences.

Additional Costs to Consider for Chartered Financial Analyst Level 1 Exam Preparation

Preparing for the CFA Level 1 exam may entail additional costs beyond program enrollment and exam registration fees. Candidates should factor in the following expenses:

• Calculator:

The CFA Institute permits only specific calculator models for use during the exam. Candidates who do not already own an approved calculator may need to purchase one. The cost of purchasing an approved calculator should be considered in the overall exam preparation budget.

• Travel and Accommodations:

Depending on the candidate’s location and the exam venue, there may be travel and accommodation expenses associated with attending the exam. Candidates should budget for potential transportation costs and accommodation fees to ensure they can attend the exam comfortably.

By accounting for these additional costs in their exam preparation budget, candidates can adequately plan and prepare for the CFA Level 1 exam without encountering unexpected financial challenges.

Also Read – CFA Scholarships – Types, Eligibility & Application Process

Syllabus (CFA Level 1 Course Outline)

• Ethical and Professional Standards

These are foundational to the CFA course, embodying the core values of CFA holders. The CFA Board emphasizes integrity and ethical conduct as essential traits for finance professionals.

In the finance industry, trust is paramount, requiring adherence to ethical standards to maintain integrity and prevent potential collapse. Finance professionals must diligently follow regulatory guidelines and recognize ethical violations.

Despite its brevity—around 50 pages in the CFA Level 1 syllabus—the ethics and professional standards subject carries significant weight, comprising 15% to 20% of the exam with 27 to 36 questions. Candidates must approach this topic seriously, as mastery of ethical principles is crucial for earning respect and credibility as a finance analyst.

• Financial Statement Analysis

This is indispensable for financial analysts, despite being traditionally associated with accountants. Companies engaging in M&A deals, cross-border projects, or requiring liquidity benefit from professionals adept at interpreting financial statements. Familiarity with different accounting standards, such as IFRS, US GAAP, or IndAS, is crucial for CFA-trained individuals, enabling them to decode financial information effectively.

In the CFA Level 1 syllabus, candidates delve into balance sheets, cash flow statements, income statements, and other comprehensive income. This subject, comprising 6% to 9% of the exam, equating to 23 to 31 questions, is a vital skill for financial analysts, whether they operate on the buy-side or sell-side.

• Equity Investments

These play a significant role in the daily tasks of financial analysts, particularly those operating in buy-side markets. Understanding the industry’s intricacies, assessing the value of potential investments, and making informed, long-term decisions are essential skills for professionals in this field.

In the CFA Level 1 syllabus, candidates explore various aspects of equity investments, including security market indexes, industry and company analysis, and equity valuation. Additionally, they learn to calculate risks and analyze factors that may impact their investments.

This subject area constitutes 6% to 9% of the exam, comprising approximately 18 to 22 questions.

• Fixed Income

Candidates delve into the realm of fixed-income investments, encompassing fixed deposits and bonds. Students explore the diverse features of these investments and learn to evaluate potential options effectively.

The course emphasizes understanding the impact of interest rate fluctuations on the value of fixed-income investments. Additionally, candidates acquire skills in performing calculations to assess valuation and associated risks.

Fixed income constitutes 10% to 12% of the Level 1 exam, equating to approximately 11 to 14 questions.

• Quantitative Methods

Candidates gain comprehensive knowledge of various analytical tools, a foundational topic that extends to subsequent levels of the program. Proficiency in these techniques is paramount as they are integral to devising effective investment strategies.

Covering probability concepts, linear regression, sampling and estimations, hypothesis testing, and data organization and description, this subject equips candidates with essential skills applicable across both sell-side and buy-side perspectives. Analysts frequently utilize these methods for asset valuation, making them indispensable for strategic decision-making and planning.

Quantitative methods comprise approximately 6% to 9% of the exam, representing 14 to 22 questions.

Also Read – CFA Jobs & Salaries In India After CFA Level 1, Level 2 & Level 3

• Economics

Understanding economics is key to comprehending the inner workings of the finance industry and gaining a global perspective on world events.

Topics covered include demand and supply analysis, market structures, and business cycles, forming the backbone of finance. Proficiency in economics is crucial as it underpins other subjects; candidates without prior knowledge may require additional focus on this area.

The exam comprises 14 to 22 questions dedicated to the Economics subject, highlighting its significance in the CFA Level 1 curriculum.

• Corporate Issuers

It delves into corporate policies and investment choices. This subject encompasses technical terms and calculations necessary for thorough assessments.

Students learn about business models, capital investments, and corporate governance, gaining insight into the factors driving financing decisions. Corporate issuers comprise 11% to 14% of the Level 1 exam, representing approximately 14 to 22 questions.

• Derivatives

Derivatives play a crucial role in risk management for portfolio managers and traders. The CFA Level 1 syllabus introduces students to these financial instruments, expanding their investment options beyond equity and fixed-income securities.

Despite comprising only 11% to 14% of the exam, equating to 9 to 15 questions, the syllabus provides a comprehensive understanding of derivatives.

• Alternative Investments

Provides comprehensive instruction on various investment types, crucial for financial analysts to make informed decisions. Alternative investments, including real estate, commodities, hedge funds, natural resources, and private capital, are explored in detail.

While constituting only 5% to 8% of the exam, translating to 9 to 15 questions, this section is significant for expanding students’ knowledge base.

• Portfolio Management and Wealth Planning

These are essential topics for aspiring professionals interested in the buy side of finance. While comprising a relatively small portion of the exam, these subjects remain highly relevant. The CFA Level 1 syllabus provides a foundational understanding of portfolio management, with subsequent levels delving into more advanced concepts.

Covering portfolio risk and returns, risk management, and technical analysis, this subject equips candidates with essential skills for managing investment portfolios effectively. Approximately 7% to 10% of the Level 1 exam focuses on portfolio management, representing 9 to 15 questions.

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

Prepping For Chartered Financial Analyst Level 1

• Creating a Study Plan:

Develop a structured study plan that outlines what topics you’ll cover and when. Allocate specific time slots for studying each day and set realistic goals to track your progress.

• Utilizing Practice Questions and Mock Exams:

Incorporate practice questions and mock exams into your study routine to assess your understanding of key concepts and familiarize yourself with the exam format. Use these tools to identify areas for improvement and refine your exam-taking strategies.

• Effective Time Management Techniques:

Implement time management techniques to make the most of your study sessions. Break down your study materials into manageable chunks, prioritize high-value topics, and use techniques like the Pomodoro Technique to stay focused and productive.

• Importance of Review and Revision:

Regularly review and revise your study materials to reinforce your understanding of key concepts and ensure retention. Schedule dedicated review sessions to revisit challenging topics and consolidate your knowledge before the exam.

• Seeking Support from Study Groups or Tutors:

Consider joining study groups or seeking support from tutors to enhance your exam preparation. Collaborating with peers in study groups allows for knowledge sharing and peer-to-peer support, while tutors can provide personalized guidance and assistance tailored to your individual learning needs.

Get a 9-month study plan for CFA Level 1 with Proschool that covers all 10 subjects & 3 months for revision.

Factors to Consider When Choosing CFA Level 1 Coaching Classes

• Demo Classes: Attend demo classes to assess teaching methods and decide on a coaching institute.
• Fee Structure: Compare fees to find quality education within your budget.
• Updated Material: Ensure study materials are current and aligned with the latest syllabus.
• Mode of Learning: Choose an institute with provides you with options for online/offline learning.
• Faculty Quality: Assess faculty experience and teaching strategies for effective learning.
• Batch Size: Opt for smaller batch sizes for individual attention and a better learning environment.
• Success Ratio: Check the institute’s success rate to gauge its effectiveness in preparing students.

Tips for Success on the CFA Level 1 Exam

1. Stay Consistent with Study Habits: Develop a consistent study routine and stick to it. Allocate dedicated time each day for studying and reviewing to ensure thorough coverage of the exam material.
2. Focus on Understanding Concepts, Not Memorization: Instead of rote memorization, focus on understanding the underlying concepts and principles. This approach enhances comprehension and retention, enabling you to apply knowledge effectively on exam day.
3. Practice Time Management During Mock Exams: Practice time management skills by taking mock exams under simulated exam conditions. Set a timer and strive to complete each section within the allocated time, practicing pacing and prioritizing questions.
4. Utilize Available Resources Wisely: Make the most of available study materials and resources, including the official curriculum, supplementary study guides, online forums, and practice questions. Utilize these resources strategically to reinforce learning and clarify doubts.
5. Maintain a Healthy Work-Life Balance: Prioritize self-care and maintain a healthy work-life balance throughout your exam preparation journey. Take regular breaks, get adequate rest, exercise, and engage in activities that rejuvenate you. A balanced lifestyle contributes to better focus, productivity, and overall well-being, enhancing your chances of success on the exam.

Also Read – Top Job profiles & 5 tips to get a job after passing CFA level 1

IMS Proschool’s CFA Prep Classes

Embarking on the CFA journey demands dedication and access to top-tier education. Our program is meticulously crafted, incorporating essential tools like financial modeling and Python to prepare students for evolving finance demands.

What Proschool Offers:

• Introductory Module (M0): Clearing basics and aligning career aspirations.
• Customized Study Plans: Personalized 6-month plans with 3 months for revision.
• Direct Pathway to Employment: Level 1 completion opens job opportunities.
• Robust Practice Regime: 5 mock exams and 2000+ practice questions simulate real exams.
• Support Beyond Classroom: Extensive resources and 24/7 faculty doubt solutions.

FAQs

1. What is the pass rate for CFA Level 1?

The pass rate for the CFA Level 1 exam varies from one exam session to another but typically falls between 40% to 45%.

2. How long should I study for the CFA Level 1 exam?

Candidates often spend approximately 300 hours studying for the CFA Level 1 exam. However, the actual study duration may vary depending on the individual learning pace and prior knowledge of the exam topics.

3. Can I retake the CFA Level 1 exam if I fail?

Yes, candidates can retake the CFA Level 1 exam if they fail. There are no restrictions on the number of attempts allowed for the exam.

4. Are there any prerequisites for taking the CFA Level 1 exam?

There are no formal prerequisites for taking the CFA Level 1 exam. However, candidates must have completed a bachelor’s degree program or be in their final year of undergraduate study to register for the exam.

5. How soon should I register for the CFA Level 1 exam?

It is recommended to register for the CFA Level 1 exam as early as possible to secure a spot and take advantage of early registration discounts. Registration typically opens several months before the exam date, and early registration deadlines vary for each exam session.