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Analyzing the CFA Level 1 Syllabus: What are the Important Exam Topics?


CFA Level 1 is the first exam you will encounter in the CFA exam journey.

We cover the exam format, structure, and historical pass rate in our CFA Level 1 overview. This post focuses on the CFA level 1 curriculum and summarizes the ten topic areas.

CFA Level 1 Syllabus Breakdown

CFA level 1 syllabus topics

1. Ethical and Professional Standards (Setting the Tone for CFA Level 1 Syllabus)

Ethics is one of the most important CFA Level 1 topics representing 15% at this level. It covers two main areas:

  • CFAI Professional Code Program
  • Global Investment Performance Standards (GIPS)

The syllabus covers the structure of the Program, the nature of the codes and standards, as well as the enforcement, application, and recommended procedures.

There are also examples of how the codes and standards can be applied and recommended procedures for violations.

On GIPS, the syllabus covers the background, key features, how they are implemented, and what to do if there is a conflict between GIPS and local regulations.

2. Quantitative Methods

Quantitative methods represent 12% of all CFA Level 1 exam topics. It introduces the time value of money, descriptive statistics, and probability as tools for quantitative methods.

Time value of money

Time value of money calculations are basic tools used to support corporate finance decisions and to estimate the fair value of fixed income, equity, and other securities or investments.

Candidates should understand interest rates and discount rates in the context of the time value of money and be able to perform various calculations e.g. finding the future value and present value, DCF, NPV, and IRR.

Descriptive statistics

This section covers basic statistical concepts, such as defining a parameter and a frequency distribution, calculating percentiles, coefficients and ratios, and interpreting standard deviations and skewness. It also covers applications such as sampling, estimation, and hypothesis testing.


Candidates will be tested on basic probability concepts, such as defining a random variable or outcome, distinguishing different types of probabilities and rules, calculating joint probability, explaining the tree diagram, and interpreting covariance and correlation.

3. Economics

This topic area represents 10% of the CFA Level 1 syllabus. It covers the introductory concepts that students typically learn in the first year of college.

Microeconomic analysis

Microeconomics studies the market behavior of consumers and firms through the basic principle of demand and supply.

Macroeconomics analysis

Macroeconomics looks at the bigger picture, looking at the aggregate output and income measurement, factors on economic growth, business cycles, and how monetary and fiscal policies are used to mitigate economic fluctuations.

We also discuss economics in a global context, notably international trade, capital flows, and currency exchange rates.

4. Financial Reporting and Analysis (Biggest CFA Level 1 Topic)

Financial reporting and analysis is the heavyweight in Level 1, representing 20% of the exam.

This is essentially financial accounting 101 (or a shorter version of FAR in the CPA exam). It starts with the introduction of principal financial statements: the income statement, balance sheet, cash flow statement, and statement of changes in owners’ equity, together with notes to those statements and management discussion and analysis of results. Various financial analysis techniques are covered as well.

It also touches on financial reporting mechanisms, such as the basic concepts of accounting equations and accruals. The roles of financial reporting standard-setting bodies and regulatory authorities are also discussed.

5. Corporate Finance

Corporate finance is relatively small, representing 7% of the CFA level 1 syllabus.

This section introduces the concept of capital budgeting, determining the required rate of return for a project, leveraging alternative means of distributing earnings, and short-term liquidity and working capital management.

6. Portfolio Management

Although Portfolio management is not heavily weighted in Level 1 (7%), this is an important section that sets the framework for later chapters. It also builds a good foundation for portfolio management in Levels 2 and 3.

Similar to most topic areas, Level 1 portfolio management is conceptual in nature. Specifically, it introduces the concept of a portfolio approach to investments. It also compares the types of pooled investment management products, risk management, portfolio risk, and return measures, as well as modern portfolio theory.

7. Equity Investments

This topic area is quite important, representing 10% of the CFA level 1 curriculum.

This session explains the market in which equity, fixed income, derivatives, and alternative investments trade. It introduces the types of assets and respective participants and how various investments are constructed and managed. It also briefly covers market efficiency.

The other session focuses on the characteristics, analysis, and valuation of equity securities. The study materials cover the features of equity securities, the role of investment management, how to conduct industry and company analyses, and understand a company’s competitive position.

8. Fixed Income

This weighting of this topic area is the same as that for equity investment, at 10% of the level.

Not surprisingly, this is an introduction to the important fixed-income investments: the characteristics, primary issuers, sectors, and types of bonds. It also touches on securitization and asset-backed securities.

The discussion then moves on to calculating price and yield, spreads, and understanding of spot rates, forward rates, and yield curves. We also learn about measuring and analyzing interest rate risk and credit risk.

9. Derivatives

Although derivatives are getting more popular, it is still not the mainstream investment product. The weighting in the CFA exam remains small at 5%.

In level 1, this section introduces the understanding of the basic derivatives (forwards, futures, options, and swaps), derivative markets, and the use of options in risk management.

10. Alternative Investments

Similar to derivatives, the section on alternative investments remains small (4%) in the Level 1 exam. This section describes the common types of alternative investments, their valuation, their unique risks and opportunities, and their relation to traditional investments. The coverage includes hedge funds, private equity, real estate, commodities, and infrastructure.


Level 1 tests on various topics, but they are related and build upon each other. As you progress to Level 2, all topics will be tested again but at a more sophisticated level.

For Your Further Reading

Here are more tips on each CFA Level 1 topic area:

CFA level 1 curriculum: ethics CFA level 1 curriculum: quantitative methods CFA level 1 curriculum: economics cfa level 1 topics: financial reporting CFA level 1 topics: corporate finance
CFA level 1 topics: equity CFA level 1 syllabus: fixed income CFA level 1 syllabus: derivatives CFA level 1 syllabus: alternative investments CFA level 1 syllabus: portfolio management

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