The CFA Level 1 exam covers 10 subjects, each with different weights and difficulty levels. Understanding the landscape before you start studying is critical — it lets you allocate your 300+ hours of preparation time strategically.
Here’s the complete breakdown of every subject you’ll face.
1. Ethical and Professional Standards (15-20% weight)
Ethics is the single most important subject in CFA Level 1 — not just by weight, but because the CFA Institute uses your Ethics score as a tiebreaker if you’re near the passing threshold. This is the one subject where you absolutely cannot afford to be weak. For a deep dive into how to approach this critical section, see our dedicated guide on CFA Level 1 Ethics.
Key topics include:
- Code of Ethics and Standards of Professional Conduct
- Guidance for Standards I through VII
- Global Investment Performance Standards (GIPS)
- Application of ethical principles to real-world scenarios
Study tip: Don’t just memorize the standards. Practice applying them to case scenarios — the exam tests judgment, not recall.
2. Quantitative Methods (6-9% weight)
Quant provides the mathematical foundation for everything else in the CFA curriculum. If you have an engineering or math background, this will be one of your easiest sections.
Key topics include:
- Time value of money
- Statistical concepts and probability
- Hypothesis testing
- Linear regression
Study tip: Master the financial calculator. Speed with TVM calculations can save you significant time during the exam.
3. Economics (6-9% weight)
Economics covers both micro and macro concepts. Many candidates find this section broad but not as deep as university-level economics courses.
Key topics include:
- Supply and demand analysis
- GDP, inflation, and business cycles
- Monetary and fiscal policy
- International trade and currency exchange rates
Study tip: Focus on understanding the relationships between concepts rather than memorizing formulas. The exam tests your ability to reason through economic scenarios.
4. Financial Reporting and Analysis (11-14% weight)
FRA is the heaviest technical section and where many candidates struggle most. It requires understanding accounting standards, financial statement analysis, and the ability to detect earnings manipulation. We cover everything you need to know in our CFA Level 1 FRA guide.
Key topics include:
- Income statements, balance sheets, and cash flow statements
- Revenue recognition and inventory accounting
- Long-lived assets and depreciation
- Financial ratio analysis
- Earnings quality assessment
Study tip: Practice reading actual financial statements. The more you work with real numbers, the more intuitive the analysis becomes.
5. Corporate Issuers (6-9% weight)
This section covers how companies make financing and investment decisions. It’s relatively straightforward if you understand the underlying logic.
Key topics include:
- Capital budgeting (NPV, IRR)
- Cost of capital (WACC)
- Capital structure decisions
- Corporate governance
Study tip: Focus on NPV and IRR calculations — these are guaranteed exam questions and are easy points once you master the calculator work.
6. Equity Investments (11-14% weight)
Equity is where the CFA curriculum starts to feel exciting. You’ll learn how to value stocks and understand market mechanics.
Key topics include:
- Market organization and structure
- Security market indices
- Industry and company analysis
- Equity valuation models (DDM, P/E, EV/EBITDA)
Study tip: Understand the logic behind each valuation model rather than just plugging numbers. The exam will test whether you know when to use each approach.
7. Fixed Income (11-14% weight)
Fixed income is about bonds — how they’re priced, how interest rates affect them, and how to measure risk. This section has a reputation for being dry, but it’s very scoreable once you grasp the core concepts.
Key topics include:
- Bond pricing and yield measures
- Term structure of interest rates
- Duration and convexity
- Credit analysis
Study tip: Duration is the single most important concept in fixed income. Make sure you understand it intuitively — how and why bond prices move when rates change.
8. Derivatives (5-8% weight)
Derivatives covers forwards, futures, options, and swaps. The weight is relatively low, but the concepts build a foundation for Levels 2 and 3.
Key topics include:
- Forward and futures contracts
- Options (calls, puts, strategies)
- Swap contracts
- Risk management applications
Study tip: Draw payoff diagrams for every option strategy. Visual understanding makes these problems much easier to solve under time pressure.
9. Alternative Investments (5-8% weight)
This section covers everything outside traditional stocks and bonds — hedge funds, private equity, real estate, and commodities.
Key topics include:
- Hedge fund strategies
- Private equity structures
- Real estate valuation
- Commodity markets
Study tip: This is one of the highest-ROI sections for study time. The concepts are relatively simple and the weight is decent — easy points.
10. Portfolio Management (5-8% weight)
Portfolio management ties everything together. At Level 1, it’s an introduction to the concepts that become central at Levels 2 and 3.
Key topics include:
- Modern Portfolio Theory
- Capital Asset Pricing Model (CAPM)
- Risk and return trade-offs
- Portfolio construction basics
Study tip: Focus on the intuition behind diversification and the efficient frontier. Understanding why diversification works is more important than the formulas.
Recommended Study Order
Based on teaching hundreds of CFA candidates, here’s the study order I recommend:
- Ethics — Start here. It’s the most important and benefits from repeated exposure.
- Quantitative Methods — Build the mathematical foundation early.
- Financial Reporting & Analysis — Tackle the hardest section while you’re fresh.
- Corporate Issuers — Builds on FRA concepts naturally.
- Equity Investments — Where finance gets interesting.
- Fixed Income — Strong overlap with Quant concepts.
- Derivatives — Builds on both Equity and Fixed Income.
- Alternative Investments — Quick wins, easy to learn.
- Economics — Broad but manageable.
- Portfolio Management — Ties everything together as a capstone.
Final Thoughts
The CFA Level 1 exam is a marathon, not a sprint. Understanding the full landscape of what you’re up against is the first step toward a focused, efficient study plan. Don’t try to master everything equally — be strategic about where you invest your time based on topic weights and your personal strengths. For a step-by-step approach to building that plan, read our guide on how to prepare for CFA Level 1.
If you need personalized guidance on building a study plan that fits your background and timeline, reach out for free mentorship.