CFA Level 1

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CFA Level 1

Chartered Financial Analyst (CFA) is a globally recognised designation provided by the CFA Institute. To attain this certification, candidates are required to pursue the CFA course which comprises of a total of three levels of exam. It assesses students on a varied range of concepts, be it Financial, Accounting-related or Mathematical. Completing the CFA course, you can choose from various prospects available in the Finance and Investment sector globally. If you are planning to study this program, here is a comprehensive blog that details the key essentials of CFA level 1, what it comprises of as well as its exam pattern and marking scheme.

Overview of CFA Exam

The CFA exam is bifurcated into three parts: Level 1, Level 2 and Level 3. Quite similar to the CA course, candidates need to clear all the three levels of this exam in order to qualify for the certification of Chartered Financial Analyst (CFA). The CFA Level 1 mainly evaluates a candidate on their basic knowledge of investment tools and moving to the next level, the complex analytical concepts as well as understanding of asset valuation is examined. Then, for the level three, the advanced level concepts of Finance and Investment are assessed including portfolio management, wealth planning, amongst others.

Eligibility Criteria

As the commencing step of the CFA course, candidates need to meet the eligibility criteria of the first level in order to register themselves for this exam. Here are the major prerequisites you need to fulfil in order to qualify for CFA level 1:

  1. The candidate must have completed their undergraduate degree and those who are in the final year of their graduation are also eligible.
  2. 4 years of work experience in a Finance-related career profile or a combination of their university education as well as employment should be a total of four years.
  3. The candidate needs to submit more than two reference letters from reputed and established professionals in the Finance and Investment industry.

CFA Level 1: Format of the Exam

Before detailing the CFA level 1, let’s take a look at the general format and structure of the three levels of this course.

Level No. Of Questions Types of Questions Duration
CFA Level 1 240 Multiple Choice Questions 6 hours
CFA Level 2 120 Combination of Questions and Essays 6 hours
CFA Level 3 120 Essays 6 hours

Syllabus of CFA Level 1

As the beginning step of the course, the CFA level 1 mainly constitutes of basic concepts of the academic disciplines of Finance and Investment. The cutoff for different subjects can vary and here is a table enlisting the different subjects of the level 1, general marking scheme as well as the included topics.

Subjects in
CFA Level 1
Percentage
of Marks
Topics
Ethics  15  Global Investment Performance Standards
Standard of Professional Conduct 
Financial Reporting analysis 15  Income statement
Drafting Balance sheet
Financial Reporting Mechanics and Standards
Equity Investment 11 Market Efficiency 
Security Market Indices
Market Organization and Structure
Fixed Income Analysis 11 Fixed Income Markets 
Fixed Income Securities
Introduction to Fixed Income Valuation
Quantitative Analysis 10 Discounted Cash Flow Applications
Time Value of Money
Statistical Concepts and Market Returns
Corporate Finance 10 Cost of Capital
Capital Budgeting
Economics 10 Firm and Market Structure
Demand and Supply Analysis
Aggregate Output, Prices,
Economic Growth 
Portfolio Management
and
Wealth Planning
Basics of Portfolio Planning and 
Construction
Derivatives  Derivative Markets and Instruments
Alternative Investment Mutual Funds
Real estate

CFA Level 1: Major Subjects

The key disciplines included under the CFA Level 1 are Finance and Economics-related concepts and some of these subjects have been elaborated below:

  • Financial Reporting Analysis: It involves the study of principal financial statements, analysis of financial reports, decision-making processes for investments, financial reporting, amongst others.
  • Fixed Income Analyses: It comprises of an introduction to how the yield curve affects the portfolio strategies and risk management including implied spot rates, convexity, duration and interpreting future.
  • Quantitative Analysis: This concept in CFA level 1 includes the study of money, time, probability and descriptive statistics along with techniques essential in financial analysis.
  • Economics: It includes several principles of microeconomics and how they are used to assess the marketplace behaviour of consumers and firms. 
  • Equity Investment: This subject involves an understanding of how to calculate the estimate of the company’s intrinsic value and varied additional valuation methods.

Job Prospects

After successfully qualifying for CFA level 1, 2 and 3, the candidates are provided with the certification of the Chartered Financial Analyst. Since it is a globally renowned qualification, you can discover plentiful opportunities in the Finance and Investment industry on an international level. Some of the major career profiles you can pursue after attaining the CFA certification are:

  • Portfolio Manager
  • Private Banker
  • Research Analyst
  • Financial Advisor
  • Relationship Manager
  • Financial Strategist

Thus, we hope that this blog provided you with the key essentials of the CFA level 1 and what it entails. If you are planning to pursue a professional program in Finance or Accounting, our Leverage Edu experts are here to guide you throughout the process of finding an ideal course and university that aligns with your interests and career aspirations.

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