What To Expect On The CFA Level I Exam

Becoming a chartered financial analyst requires the passing of three grueling exams covering an array of topics. To ace the exams, it helps to have a study plan and stick closely to a study schedule.

The Level I exam is a six-hour test. It’s broken into two, three-hour sessions, each with 120 multiple-choice questions, for a total of 240.

The Level I exam focuses on basic knowledge and comprehension of the tools and concepts used in investment valuation and portfolio management. There are 10 topics grouped into four areas: ethical and professional standards, investment tools, asset classes, and portfolio management and wealth planning.

The ethical and professional standards portion contains 15% of the test, or 36 of its questions. The CFA Institute takes this section very seriously. It frequently uses the score on this section to determine whether a candidate passes the exam if her scores on the other three sections are borderline.

Investment tools account for half of the test’s questions, and topics include corporate finance, economics, financial reporting and analysis, and quantitative methods. Reporting and analysis questions are the most abundant, and familiarity with statistical and economic concepts is helpful.

Asset classes are 30% of the test, and topics include alternative investments, derivatives, equity investments and fixed income.

Portfolio management and wealth planning make up the final 5%. This topic is covered extensively on the Level II and III exams, which focus on applying a candidate’s knowledge to portfolio management.

Source: investopedia.com