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How to Prepare for CFA Level 1 Exam 2024? - Preparation Tips & tricks
Edited By Sumeet Sudarshan | Updated on Apr 19, 2024 05:08 PM IST | #CFA Exam
Preparing for CFA Level I is the first step in the CFA exam. CFA Level 1 preparation lays the ground for the remaining two levels of the CFA course as the curriculum gradually increases in complexity. But how to crack CFA level 1 2024? might be a question faced by many newcomers to the CFA course.
CFA level 1 exam preparation would involve learning about the fundamentals of investment tools, asset valuation, portfolio management, and wealth management. Given in this article is everything you need to know about how to prepare for CFA level 1 exam including the syllabus, exam pattern, study material and preparation tips.
Also Check: CFA Level 1, 2 & 3 Registration Open - Apply Now
Latest: CFA complete guide
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CFA Level I Syllabus
Preparing for the CFA level I 2024 exam must start with understanding its syllabus. The knowledge and understanding of investment instruments and asset classes, along with portfolio management, and ethical and professional standards are the main areas covered in the syllabus of CFA level 1. There are 10 topic areas covered in the CFA level 1 syllabus grouped into four main functional areas as shown in the table below
CFA Level I Syllabus Details
| Session | Functional Areas | Topics | Weightage |
|---|---|---|---|
1 | Ethical and Professional Standards | Ethical and Professional Standards | 15-20% |
Tools | Quantitative Methods | 8-12% | |
Economics | 8-12% | ||
Financial Statement Analysis | 13-17% | ||
2 | Portfolio Management and Analysis | Corporate Issuers | 8-12% |
Portfolio Management | 5-8% | ||
Assets | Equity Investments | 10-12% | |
Fixed Income | 10-12% | ||
Derivatives | 5-8% | ||
Alternative Investments | 5-8% |
Apart from the above-mentioned topics, the CFA level I curriculum also includes a certain number of pre-read topics about which must also be part of a candidate's CFA level 1 preparation. Even though the pre-read topics are not part of the main syllabus, they are building blocks for later learning and candidates must know about them. The study material for the pre-read topics is made available as companion study material to the main CFA study level I study material by the CFA Institute without any additional cost to all the registered candidates.
The CFA level 1 pre-read topics include the following:
Time value of money
Basic Statistics
Microeconomics
Introduction to Company Accounts
CFA Level I Exam Pattern
Candidates must also thoroughly understand what the CFA level I exam pattern is. It will aid their preparation for the first level of the CFA exam. Given below is the overview of the exam pattern.
| Session | Number of questions | Time |
|---|---|---|
First Session | 90 | 135 Minutes |
Second Session | 90 | 135 Minutes |
Total | 180 | 4 Hours 30 Minutes |
The exam pattern consists of 180 multiple-choice questions divided over two sessions of 135 minutes each with an optional break in between. All the questions carry equal marks and there is no negative marking for the wrong answer. The CFA level I exam is conducted 4 times a year, in the online mode at designated test centres in February, May, August and November.
CFA Level I Question Paper Structure
Each question is followed by three answer choices and the candidate has to select the right answer
Two question formats are used:
Completing a sentence by selecting the correct answer
Answering a question by selecting the correct choice
Further the CFA level I question structure does not contain words such as true, false or except. On the other hand, the questions will contain qualifiers such as most appropriate, most likely, least likely, most accurate, and best described
The answer choices in the first level of the CFA exam are set on the following parameters:
The answer choices do not include options such as any of the above, all of the above, A and B only, A and C only or B and C only, cannot calculate, not enough information
Choices containing sentences are arranged from shortest to longest
Quantitative answer choices are listed in the order of smallest to largest.
The language used is common to both, the answer choices as well as the question stem
Also Read: NSE Courses 2024 - NSE Academy Courses with Duration & Fees
Preparation Tips for CFA Level I Exam
Given below are some useful preparation tips on how to prepare for CFA Level 1 exam
Developing a Study Plan: The CFA institute advised candidates to devote a study time of 300 hours toward the preparation for CFA level I exam. So, start preparing well in advance and give yourself enough time to cover all the topics in level 1 syllabus. It is advised to start preparing 6 months in advance using a proper study plan.
Allocate Appropriate Time: Different topics in the CFA level I syllabus carry different weights. Topics such as Ethical and Professional Standards, financial statement analysis and equity investments carry the most weight in the CFA level I exam. So, have a clear idea about what the topics are and apportion the time for preparation for CFA level I accordingly.
CFA Level I Sample Questions: To improve your comfort level with the questions, try to solve CFA level I sample papers and mock questions. The CFA institute makes available a list of 20 sample questions to familiarise candidates with the CFA level I question paper structure and pattern.
Take Prep Courses: The CFA institute has a list of approved prep course providers. A prep course aids in the preparation for the CFA level I exam by providing the latest topics and study material, question bank and mock tests together with qualified trainers. One can certainly consider this option to boost one’s preparation.
Be comfortable with a calculator: The CFA level I exam involves performing a lot of calculations. Candidates can only use certain types of calculators that are authorised by the CFA institute. So, make sure to make yourself comfortable using those devices. Using any other calculator can lead to the exam result being rendered void for the candidate.
- Don't overwhelm yourself: Don't try to cram everything in a single session. Remember slow but steady will win the race. So, allocate and apportion your time over several days. It's therefore important to start early. Don't overwhelm yourself with too much of a study load.
- Join a study group: Being among like-minded people will help you achieve your goals faster. So, join a study group where you can learn together and exchange ideas. You can also learn from other's strategies if they are benefiting from those ideas.
- Leave time for revision: Leave adequate time for revision. It's important to consolidate what you learned during your study time. So, when you draw up a study plan, make sure you leave enough time in the end to go through everything once again.
CFA Level I Study Material: The candidates must diligently work with the appropriate books and study material during their CFA level I exam preparation. The CFA institute provides access to several learning resources to all registered candidates to help them prepare for the first level of CFA exam. These include
The official curriculum of CFA level 1
Practice questions
Mock tests
CFA learning ecosystem
Custom study plans
Study tips
Important Points To Remember While Preparing for CFA Level 1
- As per the norms prescribed by the CFA institute, preparing for CFA level 1 requires a study time of 300 hours. There are 10 main subjects in CFA Level 1 and candidates should divide the time as per the weights assigned to each of the subjects.
- CFA is a tough exam, so many candidates choose to study through tutors and education providers. However, you can prepare for CFA Level 1 by yourself as well. One needs proper dedication and a disciplined approach to succeed in the exam. With an appropriate time schedule, discipline and the right study material one can clear the exam.
- Among the three levels, CFA level 1 has the lowest pass rates. The historic average pass percentage in CFA level 1 stands at 41%. This may be because CFA level 1 is the entry level exam, and many candidates who may not possess an exceptional aptitude for finance also join the course only to drop out later.
- It is always advisable to give oneself adequate time for preparation and revision. CFA Institute also prescribes a study time of 300 hours for the CFA level 1 exam. So, 3 months may not prove adequate for CFA Level 1.
Frequently Asked Questions (FAQs)
1. Is CFA Level 1 exam hard?
The CFA level I lays the ground for other two CFA levels as the programme increases in complexity. With a ten year average pass rate of 40%, the CFA level I has the lowest pass rate among the three levels.
2. How long does it take to prepare for CFA Level 1?
The CFA institute advises candidates to study for at least 300 hours in order to fully prepare for the CFA level I exam.
3. Is 2 months enough for CFA Level 1?
Considering a study time requirement of 300 hours, if one can allocates 3 hours per day five days a week then it would take close to 5 months to complete the CFA level I syllabus.
4. Can I prepare for CFA Level 1 by myself?
The CFA level I is a tough nut to crack. One can take help of prep courses where they would get access to qualified trainers and updated study material.
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