CFA Fixed Income Level 1: Our Cheat Sheet – 300 hours (2023)

Note: This cheat sheet will be updated for the latest 2022 syllabus.

Fixed income is a central issue in the financial sector and is becoming increasingly important (weight problemwisely) advancing to CFA level 3. With so many key concepts covered, we decided to create our series of tips articles that focus on a specific subject area for a specific CFA level.

This cheat sheet is basically a CFA Tier 1 Fixed Income Grading and Formula Sheet.CFA Fixed Income is one of the most quantitatively intensive topics on the exams, and getting the fixed income fundamentals right can also provide a good foundation for the levels below.

More cheat sheets will be posted in the coming weeks,Sign up for our member listbe notified first.

By referencing the CFA Learning Outcomes Statements (LOS), we have prioritized and highlighted key concepts and formulas you need to know for each topic. With some topic specific tips at the end!

Use the cheat sheets during your practice sessions torefresh your memoryin important terms. Don't forget to bookmark this page and come back often, it's a great thread to check out 🙂

We will!


  1. CFA Fixed Income Level 1: An Overview
  2. Reading 39: Fixed Income Securities: Definitive Elements
  3. Reading 41: Introduction to Valuing Fixed Income Bonds
  4. Reading 42: Introduction to asset-backed securities
  5. Reading 43: Understanding Fixed Income Risk and Return
  6. Reading 44: Basics of Credit Analysis
  7. CFA Tier 1 Fixed Income Tips

CFA Fixed Income Level 1: An Overview

CFA Fixed Income Level 1: Our Cheat Sheet – 300 hours (1)

The CFA Tier 1 Fixed Income subject area represents one of the largest segments of the broader capital market and primarily covers all investments where investors borrow money for a fixed, scheduled payment - hence the name "Annuities".

For Tier 1, Fixed Income is the third biggest theme (sharing the title with Equity Investments).FORAyethic🇧🇷 Maintaining a strong foundation of Tier 1 fixed income fundamentals is critical as a thematic weightingincreaseon all 3 levels.

The weighting of the CFA Tier 1 Fixed Income topic is 10% to 12%, which means that 18 to 22 questions out of the 180 questions on the CFA Tier 1 exam are about this topic.

It is coveredStudy Sessions 13-14, which contains reading 39-44.

Here is the summary of readings for the CFA Tier 1 Fixed Income chapters:

reading numbersubthemeDescription
39Fixed Income Securities: Defining ElementsUnderstand what a fixed income security is and its basic structure.
40Understand the structure and rules of the fixed income market.
41Introduction to Fixed Income Securities ValuationHighlights the nuances of valuation and pricing of fixed income securities. Actually the most important chapter.
42Introduction to asset-backed securitiesDive into the details of asset-backed securities and by-products like B. Home-backed securities and commercial mortgages.
43Understanding the risk and reward of fixed income securitiesDescribes the types of risks associated with typical fixed-income securities. A key topic with many testable concepts.
44Basics of credit analysisIt focuses on credit risk, a type of risk that is particularly relevant for fixed income securities.

This CFA topic is intended to introduce readers to the fundamentals of fixed income securities, as well as their pricing and valuation. The concepts discussed are especially relevant for those who want to participate in the management of fixed income portfolios: credit, macro or not.

(Video) Fixed-Income Securities: Defining Elements (2023 Level I CFA® Exam – Fixed Income – Module 1)

Even for those not aspiring to a career in Fixed Income, these topics will become an integral part of their skill repertoire. This is because different markets are often interconnected and great investors (eg Warren Buffet, Peter Lynch, George Soros) are often knowledgeable about different types of markets, not just the market they invest in.

In summary, CFA Fixed Income Level 1 teaches:

– the various fixed income products available on the market and how these markets work;
– How are these values ​​valued? What are the risk factors for valuing a fixed income security and how can the associated risks be hedged?

Reading 39: Fixed Income Securities: Definitive Elements

CFA Fixed Income Level 1: Our Cheat Sheet – 300 hours (2)

Types of Bond Contracts

Affirmative (positive) covenants are what bond issuers must do. Some examples:

  • make timely interest and principal payments;
  • comply with all laws and regulations;
  • Protecting and preserving assets.

Negative (restrictive) covenants are what bond issues must haveNoDoes. Some examples:

  • Debt Restrictions: Restrictions on maximum acceptable leverage ratios and minimum acceptable interest coverage ratios.
  • Negative Promises: Additional Debt Instruments may not be issued with a higher rating than the existing Debt Instruments.
  • Limits on Distributions to Shareholders: Limiting the amount of money that can be spent on dividends and share buybacks.
  • Restrictions on Mergers and Acquisitions.

Structure of a security's cash flows

  • bullet bonus: The full principal amount of the bond is paid at maturity.
  • Depreciation (total or partial):
    • A fully amortized bond pays equal interest and principal repayments periodically throughout the life of the bond, so that the bond is paid in full when it matures.
    • A partial amortization bond is a bond in which only a small portion of the principal is paid during the life of the bond, with a larger payment at maturity. Essentially, it's a mix of bullet and full call titles.
  • sinking fund: The issuer pays a specified portion of the principal each year during the life of the bond or after a specified date. A declining fund deal has lower credit risk but higher reinvestment risk for investors.

Securities with contingent provisions

redeemable bonds

A callable bond gives the issuer the right to redeem all or part of the bond before maturity.

This built-in option benefits the issueras it protects the issuer if interest rates drop (ie if they do, the issuer can call/redeem the bond and reissue a new bond at a lower interest rate).

To compensate investors for the higher reinvestment risk, issuers offer a higher yield on callable bonds.

Therefore, the price of the callable security (venforceable title) is always lower than the price of a plain (non-callable) bond because the call option creates value for an issuer.

venforceable title= Vnon-redeemable bond–vcall option

redeemable bonds

A callable bond gives the bondholder the right to sell the bond to the issuer at a predetermined price on a specified date or dates.

This integrated option benefits the bondholderSince it protects the bondholder if interest rates rise (i.e., if they do, the price of the bond falls), the bondholder can sell the bond back to the issuer at a predetermined price and reinvest their money at a predetermined rate of the highest. interest).

Callable bonds offer a lower yield and are worth more than a non-callable bond.

venforceable title= Vnon-redeemable bond+vput option

convertible bonds

Convertible bonds give the bondholder the right to exchange the bond for a specified number of shares of common stock in the issuing company.

With foreign and equity features, convertible bonds offer advantages for both:

  • Investors, as they have the opportunity to convert it into shares and participate in more gains if the share price goes up, but are protected against losses if the share price goes down.
  • Issuers because they have reduced interest expense because convertible bonds have lower yields and when debt is converted there is no debt to pay. It can also be a chargeable convertible.

Contingent Convertible Bonds (CoCos) are automatically converted into shares at a predetermined event.

  • conversion price= Price per share at which the security can be converted into shares
  • conversion rate= Number of shares of common stock into which each security can be converted
  • conversion value= current share price x exchange rate
  • conversion premium= convertible bond price – conversion value

Reading 40: Fixed Income Markets: Issuance, Trading and Financing

CFA Fixed Income Level 1: Our Cheat Sheet – 300 hours (3)

4 mechanisms for public offering of securities

  • guaranteed offer: An investment bank agrees an offer price with the issuer and buys the entire bond issue at that price, assuming the risk of reselling it to other investors.
  • Best Effort Offer: Unlike a written offer, the investment bank acts only as an intermediary and sells as many securities as possible without taking on the underwriting risk. Unsold securities are returned to the issuer.
  • shelf record: It is a type of public offering in which the issuer can sell the entire issue of securities in tranches. You only need to file a single document with the regulator to describe the potential future bond issue, saving registration and administration fees.
  • the auction: Government bonds are usually sold to investors at auctions.

Types of corporate debt

  • bank first: bilateral (single loan) and syndicated (group of creditors)
  • Commercial Paper (CP): A flexible, low-cost, short-term loan with terms ranging from 15 days to 1 year. It is issued on the market and usually costs less than bank loans.
  • corporate bonds and bonds: Called Promissory Note if the term is less than 12 years, Bond if the term is equal to or greater than 12 years.

Short-term financing alternatives from banks

  • retail warehouses: Current accounts, savings and money market
  • short term wholesale funds: central bank money, interbank money, certificates of deposit (CD).
  • repurchase agreements(“Repos”): are purchase and sale operations, secured loan modality.
    • Repo – The seller borrows money from the buyer and provides collateral as collateral.
    • Reverse Buyback: Buyer borrows securities to cover a short position.
    • The repo or haircut margin is the percentage difference between the market value of the bond (collateral) and the loan amount. The repurchase margin level depends on the quality of the collateral, the length of the repurchase term, the merchant's credit risk, and collateral supply and demand.
    • The repurchase rate is the annualized interest rate on the loan.

Reading 41: Introduction to Valuing Fixed Income Bonds

CFA Fixed Income Level 1: Our Cheat Sheet – 300 hours (4)

Pricing of bonds with spot rates

PV=\frac{PMT}{(1+z_1)^1}+\frac{PMT}{(1+z_2)^2}+...+\frac{PMT+FV}{(1+z_N)^ NORTE}
(Video) How to Pass CFA Level 1 in 2022 With 2 Months of Studying | 90th Percentile Score

Yield to maturity (YTM) is the constant discount rate that makes the sum of the present value of future cash flows equal to the current price of the bond. In this particular case, all spot rates are the same: e.g.1= z2= znorte= r.

Parity, discount, and premium bonds

coupon rate vs. Yield to maturity (YTM)title price
Coupon rate = YTMPrice = face value
Coupon rate < YTMprice < face value, a discount
Coupon > YTMPrice > face value, a premium

Relationship between bond price, coupon rate, term, YTM

reverse effectThe price of the security is inversely proportional to the YTM, the higher the YTM the lower the price and vice versa.
convexity effectThe bond price is more sensitive to discount rate decreases than to discount rate increases.
coupon effectOther things being equal, bonds with lower coupon rates are more sensitive to changes in the discount rate.
ripening effectOther things being equal, long-term bonds are more sensitive to changes in the discount rate.

Total price, fixed rate and accrued interest

  • Full/dirty price = Fixed/clean/noted price + Marchzinsen (AI)
\begin{align*}PV^{completo}&=PV^{plano} + AI=PV(1+r)^{\frac{t}{T}}\\AI&= \frac{t}{T} \veces PMT\end{align*}
  • where t = number of days since last coupon payment,
  • T= number of days in the coupon period (real/real for government bonds, 30/360 for corporate bonds),
  • PMT = interest payment per period

Performance Measures for Fixed Income Securities

  • Semester equivalent yield of the security= income per semester x 2
  • Current Performance= annual cash coupon payment divided by bond price
  • Yield on call (YTC)= Bond yield callable if the bond is held through the first call date.
  • Worst Yield (YTW)= the smallest among all YTC and YTM scenarios.

Measures of Return on Money Market Instruments

Basis of discount rate (DR)

PV=FV \times \Big (1-\frac{Tage}{Jahr}\times DR \Big)
DR=\Large (\frac{year}{days} \times \frac{FV-PV}{FV}\Large)

Additional fee base (AOR)

PV=\frac{FV}{\Large(1+\frac{days}{year} \times AOR\Large)}
AOR=\Great(\frac{Jahr}{Tage} \times \frac{FV-PV}{PV}\Great)

The main difference between DR and AOR is that in DR interest is included in the face value, but in AOR it is added to the principal.

Implicit forward rates (IFR)

The forward rate is an interest rate in the future. The implicit forward rate (IFR) can be calculated from n-period spot rates (e.g.norte):

(1+z_A)^A \ves (1+IFR_{A,B-A})^{B-A}=(1+z_B)^B

Differential Income Measures

  • to spread= Differential of yield on a bond relative to the benchmark yield on a government bond
  • I spread= Yield differential of a security in relation to the standard exchange rate for the same maturity and currency.
  • Z-spread(Zero Volatility Spread or Static Spread) is the constant spread over the reference government spot curve, such that the present value of the cash flows is equal to the bond price.
  • Spread adjusted to the option(OAS) = Z-Spread – Answer Options
    • If it is a callable bond, the option benefits the issuer (since it can call it if interest rates fall, i.e. the bond price rises), so option cost > 0 and OAS < Z -spread for bonds redeemable.
    • If the bond is callable, the option benefits the bondholder (as he can sell the bond back to the issuer at a pre-agreed price if interest rates rise, i.e. the bond price falls), so option cost < 0 and OAS > Z - Spread for callable securities.
    • One way to think of it is that the cost of the option is the additional return the writer has to pay for the option.
    • With a callable bond, the issuer buys the call option, which means it has to pay at a higher yield; option costs are positive.
    • With a callable bond, the writer sells the put option and is paid a lower yield: the cost of the option is negative.

Reading 42: Introduction to asset-backed securities

CFA Fixed Income Level 1: Our Cheat Sheet – 300 hours (5)

Mortgage loans for residential properties

It is a loan that a buyer takes to buy a property (house, apartment, land, etc.), with the property acquired as collateral.

Features of mortgage loans:

MaturityThe number of years until maturity varies by country. In the US it is usually 15 to 30 years.
zinc valueSome types: fixed, floating (variable), initial fixed rate, convertible.
depreciation scheduleTotal, partial, interest only.
paid in advanceA prepayment is a payment made in excess of the scheduled principal repayment amount. Some mortgages have a prepayment penalty, some do not.
mortgage judgmentReplacement loans mean that, in the event of default, the lender can recoup the shortfall (the outstanding mortgage amount minus the proceeds from the sale of the property) from the borrower.

Most mortgages are non-recourse. In that case, the lender cannot demand other assets from the borrower if a shortfall occurs when the borrower defaults.

Residential Mortgage Backed Securities (RMBS)

  • Agency RMBS, which are guaranteed by the government or quasi-government, must have credit accordingly.
  • Non-brokered RMBS are issued by private companies and may feature non-compliant loans. Requires credit enhancements to reduce credit risk.

mortgage transfer bonds

Mortgage transfer bonds are created when shares or participation certificates in a pool of mortgage loans are sold.

Transfer rateThis is the coupon rate on MBS which takes into account the annual service fee.
Prepayment RisksRisk of uncertain future cash flows from capital repayments. This has 2 components:

1)risk of shrinkage: Risk of faster-than-expected prepayments due to falling interest rates. Borrowers are more likely to prepay and refinance at a lower interest rate.

2)extension risk: Risk of slower-than-expected advances due to rising interest rates. Borrowers are less likely to prepay and mortgage terms will increase.

2 measures of the prepaid tariff are:

a) Single Monthly Mortality Rate (MMR)is a monthly measure of the prepaid rate.

\scriptsize SMM=\frac{Prepaid \space en \space month \space t}{Start of \space Mortgage \space Balance \space for \space month \space t - Planned \space Main \space Refunds \space for \space month \ space t }

b) Conditional Reimbursement Rate (CPR)is an annualized version of SMM.

Collateralized Mortgage Obligations (CMOs)

CMOs are securities backed by a pool of tranche-structured mortgage transfer securities with varying prepayment risks.

CMO leg types:

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Sequential payment installmentsA CMO where each bonus leg is paid (fully) sequentially.

Short-term tranches run the risk of contraction, long-term tranches run the risk of extension.

Planned Recovery Class (PAC) Stretches.PAC CMOs offer more predictable cash flows because they define a specific range of prepayment rates as support tranches absorb the excess of the range.
support sectionsNon-PAC tranches (i.e. support tranches) provide protection against the borrowing and extension risk of PAC CMOs by absorbing repaid excess principal payments or past principal payments when collateral payments are slow.

Commercial Mortgage Backed Securities (CMBS)

  • The CMBS are backed by a suite of high-yield commercial real estate mortgage loans.
  • Interest will be paid on the outstanding principal of all tranches.
  • The highest rated bonds are paid first, credit default losses are offset against the principal of the lowest rated CMBS tranche, ie h Principal/Residual Tranche.
  • CMBS investors enjoy significant termination protection(prepayment risk coverage) integrated into the CMBS structure,but try the risk of the balloon(a type of rollover risk) as most of CMBS' underlying credit investments are global loans that require significant repayments of principal at maturity.

Secured Debt Obligations (CDOs)

  • CDOs are securities backed by a diversified pool of one or more debt securities, eg Corporate bonds, bank loans, ABS, CMBS, RMBS, credit default swaps on securities.
  • Structured in senior, mezzanine and junior/equity tranches with different risk-return expectations.
  • Unlike an ABS, a CDO requires an escrow agent to actively buy and sell debt securities to generate enough cash flow to meet the CDO's obligations and excess margin to pay shareholder and asset management fees.
  • If the underlying assets default, there is a risk that investors in the junior/equity tranche may lose their original investment and cash flow will be insufficient to pay interest to senior/mezzanine tranche bondholders.

Reading 43: Understanding Fixed Income Risk and Return

CFA Fixed Income Level 1: Our Cheat Sheet – 300 hours (6)


The duration of a bond, expressed in years, shows the percentage change in the bond's price given a 1% change in interest rates. The longer the duration, the more sensitive the bond is to changes in interest rates.


The Macaulay duration (MacDur) is a weighted average time it would take to realize all of a bond's cash flow.

modified duration

Modified duration (ModDur) is an estimated percentage change in a bond's price given a change in its yield to maturity.

Modified \space duration=\frac{Macaulay \space duration}{1+r}

Approximate Modified Duration

If the Macaulay duration is unknown, the modified annual duration can be estimated using:

ApproxModDur= \frac{(PV_-)-(PV_+)}{2 \times (\triangle Yield) \times (PV_0)}=\frac{ApproxMacDur}{1+r}

effective duration

Bonds with a built-in option and MBS do not have a well-defined YTM, as they can be prepaid before maturity.

As such, effective duration may be a better measure for these instruments, as it measures the sensitivity of a change in a bond's price to a shift in the benchmark yield curve (rather than its own YTM).

EffDur=\frac{(PV_-)-(PV_+)}{2 \times (\triangular curve) \times (PV_0)}

Key rate duration

Key interest rate duration measures the sensitivity of a bond's price to ashape shifta benchmark yield curve for a specified time frame.

This is used to assess yield curve risk, i.e. h Non-parallel shifts in the yield curve.

Influence of bond maturity, coupon and yield on interest rate risk

change of one variable (all other constants)Impact on title duration
highest coupon rateLower
Higher yield to maturity (YTM)Lower
Longer maturation timeIt is generally positively correlated with Macaulay and modified duration:

– Increased for premium and peer titles.
– Generally higher for discount bonds, except for long-term low-coupon bonds, which allow for a shorter duration than comparable shorter-term bonds.

duration of money

Duration of money measures the change in price in currency units in which the security is dominant, given a change in the annual yield to maturity.

Gelddauer = AnnModDur x PVcomplete

One Basis Point Price (PVBP)

PVBP estimates the change in total security price in response to a 1bp change in YTM.

PVBP=\frac{(PV_-)-(PV_+)}{2}=Geld \gap duration \times 0.0001


approximate convexity

ApproxCon=\frac{(PV_-)+(PV_+)-(2 \times PV_0)}{(\Yield triangle)^2 \times (PV_0)}

The percentage change in the total price of a bond given a change in convexity-adjusted yield is:

\footnotesize \%\triangle PV^{full}=(-AnnModDur \times \triangle Yield)+(0,5 \times AnnConvexity \times (\triangle Yield)^2)
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effective convexity

EffCon=\frac{(PV_-)+(PV_+)-(2 \times PV_0)}{(\triangle curve)^2 \times (PV_0)}

Reading 44: Basics of Credit Analysis

CFA Fixed Income Level 1: Our Cheat Sheet – 300 hours (7)

Credit risk

  • 2 components of credit risk: risk of default (or probability of default) and value of loss (or loss upon default).
  • expected loss= probability of default x severity of loss given default
  • severity of loss= 1 - recovery rate
  • Impact on profitability due to credit spread change (with convexity adjustment):
\retorno pequeño \impacto espacial \approx -(ModDur \times \triangle Spread)+ 0.5(Convenxity + \triangle Spread^2)

The Four C's of Credit Analysis

abilityAssess the borrower's ability to make principal and interest payments over the life of the debt.
safetyQuality and value of the goods given in guarantee.
alliancesTerms and conditions that the issuer must comply with.
CharacterQuality of the management team, financial history of the company, whether there is a history of default or bankruptcy.

CFA levell 1 Fixed Income Tips

CFA Fixed Income Level 1: Our Cheat Sheet – 300 hours (8)

Deal with the subject of fixed income from the beginning of your studies

If you are quantitatively inclined, I suggest you study this topic early on in your CFA studies. However, it makes sense to familiarize yourself with the firstTime value of money concepts and discounted cash flow approach.

In fact, we have a detailed recommendationOrder of Study Topics for CFA Level 1It covers all these points to maximize your learning efficiency.

What learning materials should I use?

It all depends on where you are:

  • When you have experience in fixed income, it's like a fish in water.
  • If you are new to finance, certain concepts can be very strange.

I recommend using the preparation provider notes; I cansee what's on offer here🇧🇷 If you find some of the concepts difficult to grasp, take it a step further and check out the CFA Institute syllabus, which is useful for the occasional dig but can be too dry and time-consuming to work well as basic study material.

If you wantmore reading materialI always recommendFrank J. Fabozzi Fixed Income Securities Handbook.

Which is?The Fixed Income Securities Handbook has been the world's most trusted resource on fixed income investing for decades.

About the author:Frank J. Fabozzi is Professor of Finance at EDHEC Business School, member of the EDHEC Risk Institute and member of the BlackRock Board of Directors.

Master your calculator for this topic

If you want to pass this section with flying colors (and you do), then this is the place for you.CFA Calculatoris your best friend.

Fixed income investing is a particularly computer-intensive subject, and the calculations on the CFA exam are not your usual pencil-and-paper multiplication and division.

Therefore, you should know your calculator's functions and operations like the back of your hand. practice regularlypractice testsand given examples, and consider checking out our calculator guides for additional helpful tips:

  • The 300 Hour Guide to the Texas Instruments BA II Plus Calculator
  • The Ultimate List of BA II Plus Calculator Tips for CFA Exams

What do I do to practice?

As the saying goes, practice makes perfect. This topic is no different.

If you are new to finance and fixed income, make sure you solve enough numbers problems before taking the actual study notes test.

Then try the questions found in the CFA Institute program. finally try yourpractice tests, and that should be pretty solid prep.

More tips articles will be posted in the coming weeks. Stay one step ahead of other CFA candidatesSubscribe to our member list to be notified.

In the meantime, here are other related articles that might be of interest to you:

(Video) Introduction to Fixed Income Valuation (2023 Level I CFA® Exam – Fixed Income–Module 3)

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  • CFA Level 1: How to Prepare for and Pass the CFA in 18 Months
  • CFA Tier 1 Tips: Top 10 Tips From Past Candidates
  • 18 practical ways to improve your learning memory
  • How to Learn Effectively: Best Practices That Work for CFA, FRM, and CAIA
  • The Definitive Guide to CFA Practice Questions


Is 300 hours enough for CFA Level 1? ›

Successful Level I candidates spend more than 300 hours preparing for the exam on average. The best strategy is to leave at least four months (approximately 17 weeks) to finish all the reading material. Don't neglect end-of-chapter questions. They will help reveal weak points.

Is there a cheat sheet for CFA Level 1? ›

The cheat sheet contains every single important formula you might need during the Level I CFA Program exam. Categorized formulas are by chapter. The document is quite long – 104 pages – so you may want to scroll to find the name of the relevant chapter when looking for a formula to tackle a question.

Do you get a cheat sheet for CFA? ›

The CFA Institute does not provide a formula sheet for the CFA exam, and that's where Wiley's trusted formula sheets offer an advantage to CFA candidates.

What is the hardest section of CFA Level 1? ›

Level 1 Hardest Topics

Fixed Income, Derivatives, and Financial Reporting Analysis have always been considered one of the hardest topics for the Level 1 exam. The reason is that these topics demand a lot of reading time and extensive calculations.

Can I clear CFA l1 in 3 months? ›

No, studying for any CFA exam in less than 6 months will not give you enough time to adequately prepare unless you have a relevant background in the curriculum. According to CFA Institute, candidates study on average 348 hours for the Level I exam, 364 hours for the Level II exam, and 365 hours for the Level III exam.

Can CFA Level 1 be done in 6 months? ›

Are 6 Months Sufficient to Prepare for Level 1 CFA Exam? 6 months are definitely sufficient to prepare for your level 1 CFA exam. With 6 months, you can easily plan for roughly 400 hours of studying during your exam prep.

Is it common to fail CFA level1? ›

Very few candidates pass all three CFA exams on their first attempt. CFA Institute estimates it takes the average successful candidate four years to complete the CFA Program. So failing one level, if not two, makes you an average candidate. It is difficult for most candidates entering the program to accept this.

Is CFA Level 1 getting harder? ›

Commonly cited as one of the world's hardest exams, CFA Level 1's difficulty is comparable to a diploma level and gets harder from then on.

Does CFA Level 1 look good on resume? ›

The Chartered Financial Analyst (CFA) qualification is a big asset for an investment professional and should be highlighted on a resume.

What is the hardest CFA exam? ›

Many CFA charterholders consider the Level 3 CFA Exam the most difficult because of the time and thought needed to answer the constructed responses successfully. While the typical Level 3 CFA Exam pass rates are the highest of the CFA Exams, only around 56% of CFA candidates pass the exam.

Why do so many people fail the CFA exam? ›

Not Enough Practice

The key to passing any level of the CFA exam is to practice as many questions as possible. The major issue is that even with good technical knowledge, if you have not practiced enough questions, you will struggle to apply your knowledge to exam-based questions.

What percentage of people pass the CFA on the first try? ›

The latest CFA pass rates are: 36% for Level 1 (Nov 2022) – the trend is still slightly below long term average. 44% for Level 2 (Nov 2022) 48% for Level 3 (Aug 2022)

How many times can you fail CFA Level 1? ›

Candidates will have a total of six maximum attempts per exam level.

Which is the easiest section of CFA Level 1? ›

Corporate Finance is one of the easiest topics of the Level one exam this is because this subject is very logical and intuitive and the formulas are easy. The scope is also quite limited and includes concepts related to NPV, IRR, corporate governance and capital management.

Can CFA Level 1 be prepared in 2 months? ›

CFA Exam Prep. With only about 60 days to the exam, you also definitely need a good study plan that you will strictly obey. Here's some basic information about your FEB 2023 level 1 CFA exam in 2 months: Starting date: 12 Dec 2022.

Does CFA degree expire? ›

CFA Program exam results do not expire, and you are not required to enroll each year. There is no limit to the amount of time you have to complete the CFA Program.

Do you need 300 hours for CFA? ›

How to know the number of hours you need to put in for CFA Exam study? The CFA Institute conducts a survey before and after every CFA exam. According to the latest survey results, attempted by CFA candidates, on an average 322 hours of study time is required to prepare for one CFA Exam; 304 hours for CFA Level 1.

What is the shortest time to complete CFA? ›

How long does the CFA® Program take to complete? With Level I exams in June and December and Level II and III exams in June, it is possible to complete the CFA Program in two years. However, with a recommended study time of 300 hours per exam level, it takes most people three to four years to complete the full program.

Can I take CFA Level 1 exam from home? ›

You can take your exam at home, or an alternative location such as in your office. Rooms with clear or frosted glass walls are not permitted. Make sure you can meet the important requirements which must be followed regardless of where you sit your exam.

Can you study for CFA Level 1 by yourself? ›

All three exams within the CFA curriculum are structured as a self-study programme, but there are some items that you must remember to prepare for the tests in order effectively, whether you plan to do them alone or by means of a tutor or study course.

How many hours a week should I study for CFA Level 1? ›

Study ​10-20 hours a week, or 2-3 hours a day. Sophie recommends starting 6 months before the CFA exams, which we wholeheartedly support. Starting 4-6 months before the CFA exams gives you dollops of time to adequately go through the syllabus, take practice exams, iron out weak spots and tune yourself to be exam-fit.

What is the salary for a CFA Level 1 completed candidate? ›

4,50,000 - 8,00,000 PA.

Do you have to pay again if you fail CFA? ›

The CFA program enrollment fee will remain valid throughout your candidacy, and you will need only to pay the registration fee for any future exams.

Is there a lot of math in CFA Level 1? ›

The first two CFA exam levels are significantly quantitative - there is literally a topic area called Quantitative Methods. This topic area covers subjects like time value of money, discounted cash flow, and lots of statistical concepts, probability distributions and hypothesis testing.

Why CFA is better than MBA? ›

Traditional MBAs are broader than the CFA program, covering topics such as management, marketing, and strategy. The CFA program, on the other hand, provides deeper coverage of investment management. Ultimately, the decision on which one to pursue depends on what one's career goals in finance are.

What is the pass rate for CFA Level 1 2022? ›

The NOV 2022 level 1 CFA exam pass rate was 36%, which is good news compared to the low 2021 level 1 CFA exam pass rates. However, it's still lower than the average pass rate of 43% true of the past level 1 CFA exams.

Is CFA Level 2 easier than Level 1? ›

Level 2 is much harder than Level 1 simply because it is more intense – the depth and detail Level 2 goes into (and tests on) is greater, as it is more application-focused. ​More importantly, candidates need to get used to answering the vignette-style multiple choice questions that is new in Level 2 (see tip #4).

How do you say you passed CFA Level 1 on resume? ›

Listing CFA Level One in the education section of the resume

Write "Chartered Financial Analyst." Include a hyphen and "Passed Level 1" next to it with the year you earned the qualification. Write "CFA Institute" in parentheses.

Can I put CFA Level 1 on LinkedIn? ›

List your CFA designation or candidate level under Certifications in the Accomplishments section of your LinkedIn Profile.

What are 3 things you should not put on your resume? ›

Certain personal details are unnecessary to put on your resume and could even send the wrong message.
Don't include:
  • Your marital status.
  • Sexual orientation.
  • Religious or political affiliations.
  • Social security number.
  • Anything else that a prospective employer can't ask about.

Is the CFA exam harder than the CPA exam? ›

Exam Difficulty - CFA vs CPA

CFA exams are far more difficult than other professional examinations, with an average pass rate of 34% as of November 2021. Financial principles, portfolio management, financial analysis, and accounting are some of the areas covered on the CFA examination.

Is CFA difficult than CPA? ›

Based on the historical passing rates, it can be said that the CFA exams. Candidates with a background in finance, accounting, economics, or business generally pursue this, and its exam dates and notifications can be followed on its official website. read more are much more difficult than the CPA exams.

Which exam is harder CPA or CFA? ›

It depends on what you mean by “harder.” If CPA vs CFA difficulty is judged purely by the exam, then CFA is the harder qualification to achieve. However, if you're measuring by other requirements like application and education, particularly for candidates outside the US, CPA is more complicated.

What percent of people pass all CFA exams? ›

The CFA Institute reports that historical pass rates for Level I and Level II of the exams are typically between 40% and 50% with Level III having a slightly higher pass rate. However, pass rates were much higher when the exams were first initiated in 1963 and have been trending downward since then.

Is CFA the most difficult exam in the world? ›

The Chartered Financial Analyst (CFA) test is often regarded as the most rigorous and harsh exam in the area of finance. Every year, over 100,000 applicants from over 100 countries seek to pass CFA.

Is CFA prestigious? ›

The CFA charter is one of the most respected designations in finance and is widely considered to be the gold standard in the field of investment analysis. To become a charter holder, candidates must pass three difficult exams, have a bachelors degree, and have at least four years of relevant professional experience.

What percentage of CFA are female? ›

Member Demographics
% of Total
Years in Industry
20 more rows

What is the failure rate for CFA exam? ›

In November, 36% of candidates passed the Level I test, down from 37% success rate for those who sat for the exam in August and 38% in May, the CFA Institute said Thursday. The average pass rate for the past decade is about 41%, according to the institute.

What is a good percentile in CFA Level 1? ›

Some years test takers will receive a 65% overall score and fail, while in other years candidates have received a 62% score and passed. How the scoring is weighted plays heavily on how your overall score will turn out. Generally speaking, any score of 70% or higher should be a passing score.

Does passing CFA Level 1 help getting job? ›

Although being a CFA charterholder doesn't guarantee you a job, you are much more likely to advance in your career or find the perfect finance job if you've earned your charter.

Will CFA Level 1 expire? ›

No. Your results do not expire.

Is CFA Level 1 enough for investment banking? ›

To earn the badge of a CFA, you first have to take the course and pass the exams. However, the course won't be enough to reach higher levels in this career and take up work as an investment banker. You need to gain the required experience and expertise in your domain.

Do you get Z table in CFA Level 1? ›

No. CFA Institute does not provide distribution tables with the exam. If a question requires information from a specific distribution table, that information will be provided with the question, but the tables themselves will not be provided. Similarly, time value of money tables (present value, future value, etc.)

Is 60 days enough for CFA Level 1? ›

6 months are definitely sufficient to prepare for your level 1 CFA exam. With 6 months, you can easily plan for roughly 400 hours of studying during your exam prep.

Is 7 months enough for CFA Level 1? ›

Sadly, it's possible. Level 1 CFA exam prep lasting for 7 months can really turn out to be not enough.

How many hours recommended for CFA Level 1? ›

Studying for the Level I exam is crucial, and it takes a substantial effort. There are no shortcuts. The one thing standing between you and success on the Level I CFA® Program exam is hard work. CFA Institute recommends you aim to spend at least 300 hours preparing for the Level I exam.

How many hours do you need for CFA Level 1? ›

The average candidate for Level I of the CFA exam should spend a minimum of 300 hours over the course of six months preparing for the exam.

How long should I spend on CFA Level 1? ›

Successful candidates report studying on average over 300 hours for each level of the CFA Exam.

Do people fail CFA Level 1? ›

Very few candidates pass all three CFA exams on their first attempt. CFA Institute estimates it takes the average successful candidate four years to complete the CFA Program. So failing one level, if not two, makes you an average candidate. It is difficult for most candidates entering the program to accept this.

Is CFA level 1 the easiest? ›

Level I of the CFA Program usually has the lowest pass rate which could imply it's the most difficult exam in the program. However, this will not apply to every candidate because each person has different strengths and weaknesses.

What is CFA Level 1 expected salary? ›

A Chartered Financial Analyst (CFA) can expect an average starting salary of ₹3,92,500. The highest salaries can exceed ₹16,00,000.

Can CFA Level 1 be done in 2 months? ›

With only about 60 days to the exam, you also definitely need a good study plan that you will strictly obey. Here's some basic information about your FEB 2023 level 1 CFA exam in 2 months: Starting date: 12 Dec 2022.

Can CFA be done in 3 months? ›

This post tells you how to efficiently prepare a 3-month CFA exam study plan. Apart from the study schedule, below you will also find 4 level 1 CFA exam topic categorizations together with some relevant exam preparation hints designed to let you make the most of the upcoming 3 months.

What is the minimum salary of CFA? ›

CFA salary in India ranges between ₹ 0.6 Lakhs to ₹ 13.5 Lakhs with an average annual salary of ₹ 4.0 Lakhs.

Can I pass CFA in 18 months? ›

​​​Manage your time expectations: CFA exams require a serious time commitment. To target for consecutive passes in 18 months, a minimum of 300 study hours over a 6 month period is recommended. This implies a minimum of 11.5 hours of study over a 7 day week.


1. CFA 2023: EVERYTHING YOU NEED TO KNOW | NEW! Curriculum | CFA Level 1 | Wall Street Notes
(Wall Street Notes)
2. CFA Level 1 Experience (Tips & Tricks)
(Marc Létourneau)
3. Fixed-Income Active Management: Credit Strategies (2023 Level III CFA® – Reading 14)
4. Fixed-Income Markets: Issuance, Trading and Funding (2023 Level I CFA® Exam – Fixed Income–Module 2)
(Joe Maule, CFA)
6. CFA Level 1 study order (CFA exam - Efficient CFA level 1 study plan)
(Cool Finance TV)


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