Ultimate Guide to CFA Exam Topics: Key Areas You Need to Know

Level 1 of the CFA exam is the entry-level exam, focusing primarily on investment tools and ethics. The exam consists of  multiple-choice questions and is divided into two sections: morning and afternoon sessions. The key topics for CFA Level 1 include:

• Ethical and Professional Standards (15%) – Ethics and professional standards are the backbone of the CFA program. This section focuses on the CFA Institute’s Code of Ethics and Standards of Professional Conduct, which you must apply in your career as a CFA charterholder.
• Quantitative Methods (12%) – This section covers the basics of statistics, time value of money, probability theory, and hypothesis testing. It’s essential for financial modeling and analysis.
• Economics (10%) – You’ll study microeconomics, macroeconomics, international trade, and currency exchange rates. This knowledge is crucial for understanding market movements and global economic trends.
• Financial Reporting and Analysis (15%) – This section delves into the financial statements and accounting principles. Key topics include income statements, balance sheets, cash flow analysis, and financial ratios.
• Corporate Finance (10%) – Understand the foundations of corporate governance, capital budgeting, cost of capital, and financial decision-making.
  Equity Investments (11%) – Learn how to analyze and value stocks, understand market efficiency, and evaluate risk and return in equity investments.
• Fixed Income (10%) – Focus on bond pricing, yield curves, and risk analysis. Fixed income is a fundamental area for any CFA candidate.
• Derivatives (5%) – This section covers futures, options, swaps, and other derivatives used in financial markets.
• Alternative Investments (4%) – Learn about hedge funds, private equity, commodities, real estate, and other alternative investment vehicles.
• Portfolio Management (6%) – Gain an understanding of the principles of asset allocation, portfolio construction, and performance evaluation.