Top CFA Level I FAQs By Candidates

If you are in the financial industry, you have probably heard about the CFA designation. In addition, if you are a level I candidate, you have questions about the curriculum and what to expect in the exam. This article covers common CFA level I FAQs aspiring candidates ask in the process of preparing for the exams. We hope you, too, get answers to the questions you have from this article.

Here you go.

What is the CFA Designation?

The CFA designation is a professional credential for investment management and portfolio management professionals.

To become a Chartered Financial Analyst, you should complete the CFA Program and gain the required experience in the investment industry. The designation is an internationally recognized qualification for financial analysts.

With a CFA designation, you will focus on understanding financial markets, analyzing various businesses, and advising companies and individuals to invest. CFA charterholders usually trade securities and manage funds on behalf of their clients to earn revenue. As a result, achieving a CFA designation will most likely help you become an investment analyst, fund manager, portfolio manager, or financial advisor.

What are the CFA Level I Exam Requirements?

To enroll in the CFA Program, you should hold a bachelor’s degree or an equivalent or be in the final year of your undergraduate studies. You are also eligible to register for the CFA Program if you have at least 4,000 hours of relevant work experience or 4,000 hours of the combined university and professional experience.

You should prove 4,000 hours of full-time work experience in a position involving decision-making on investments or a product that contributes to the decision-making process. The work experience can be from before or after you enrolled for the CFA exam.

What is the CFA Level I Exam Format?

The question format used in the level I exam is multiple choice. The test consists of two 135 minutes sessions covering all the topics in the curriculum with an optional break between the sessions. You should take both sessions to qualify for an exam result.

The first session has 90 multiple-choice questions covering the following topics; economics, ethics and professional standards, quantitative methods, and financial reporting and analysis. The second session also has 90 multiple-choice questions covering the following areas; derivatives, corporate finance, alternative investments, fixed income, and portfolio management.

Each multiple-choice problem will consist of a question, sometimes accompanied by a statement or a table, and three answer choices.  The two basic formats used are sentence completion with three unique answer choices or questions with three unique answers from which you can choose.

What are the CFA Level I Exam Topics, Weights, and Pass Rates?

The CFA Level I curriculum covers ten topics, each with a different weight in the exam. The weights are subject to change, but you can identify the topics which carry the most weight. However, the most recent topics and their weights shared by the CFA Institute in 2022 are:

• Ethical and professional standards – 15-20%
• Quantitative methods – 8-12%
• Economics – 8-12%
• Financial reporting and analysis – 13-17%
• Corporate finance – 8-12%
• Equity investments – 10-12%
• Fixed income – 10-12%
• Derivatives – 5-8%
• Alternative investments – 5-8%
• Portfolio management – 5-8%

The latest pass rates in 2022 were 55%, then 26%, 22%, and 25%. According to CFA Insitute, the pass rates post-pandemic conditions should revert to the pre-pandemic conditions of around 45%.

How Hard is the CFA L1 Exam?

The CFA Program curriculum is challenging and requires candidates to show an in-depth understanding and mastery of the content. With a pass rate of only 41%, the CFA level 1 exam is considered the hardest of the three levels. There are at least three sections of the CFA level 1 that are considered the hardest and most heavily weighted – Fixed Income, Derivative Investments, and Financial Reporting and Analysis. It’s, therefore, advisable to put in more effort when studying these topics to increase your chances of passing the exam.

How Long Should I Study for the CFA L 1?

Level I candidates should put in at least 300 hours of study and exam preparation time before sitting for the exam. It’s worth noting that the amount of study hours you put in somehow correlates to higher chances of passing the CFA level 1 exam. Therefore, 300 hours is just a minimum. Depending on where you’re starting from, there’s no harm in going beyond this. In fact, most candidates who’ve successfully completed CFA level 1, recommend starting 4 – 6 months before the exam. With that, you’ll have enough time to adequately go through the CFA syllabus, do lots of practice questions to iron out your weak areas, and sharpen your answering skills to be exam-fit.

How does the CFA Institute Grade the CFA Level I Exam?

The CFA Institute applies a unique methodology to come up with a minimum passing score (MPS) for each exam. However, this methodology is not fully released to the public. Usually, candidates don’t get a numerical score for their CFA level 1 exams. Instead, the CFA institute applies the MPS to each of the graded exams, and candidates get results based on this. A candidate either receives a “Pass” for a score above the MPS or a “Fail” for a score below the MPS.

Here are tips to get a pass in the CFA level 1 exam:

• Develop your study plan 4 to 9 months before the exam.
• Ensure all Learning Outcome Statements of the CFA level I exam are part of your study plan.
• Make sure you enroll in a reputable CFA exam prep course to get the most out of your study efforts.
• Familiarize yourself with the exam weights and know what to expect in each CFA level I exam section.
• Take some time to rest during the last week of the exams instead of panicking and trying to cram things.

See how you can increase your chances of getting a pass in your CFA level 1 exam with AnalystPrep.

Can I Postpone my CFA Level I Exam after Registration?

You need to fulfill specific criteria and appeal directly to the CFA Institute to postpone your level I exam. Postponing an individual exam is referred to as a deferral and is only allowed in specific circumstances.

You should submit a deferral request to the CFA Institute before or within ten business days after the exam window. The CFA Institute reviews your deferral request, and they decide on a case-to-case basis. If your case meets the criteria, you will get a qualified deferral, but you will forfeit the paid payments. However, the CFA Institute will defer your enrollment to the next scheduled sitting.

If you fail to qualify for a deferral, you can withdraw from the CFA exam. If the CFA Institute rejected your deferral request, you could choose to withdraw from the CFA exam up to five days before the set test date. You will not have to take the exam, but you will have to register to take it in the next sitting.

According to the CFA Institute policies on exam withdrawal, you will get a full refund of your registration and exam fees if you withdraw within the first three days after you registered. If more than three days have passed after you registered, you will have to forfeit all the fees paid.

How much does it Cost to Enroll for the CFA Level I Exam?

There is a one-time CFA Program enrollment fee of $450. The CFA Institute offers early and standard registration deadlines. Consequently, if you enroll for early registration, you will pay $700, and on the other hand, standard registration is $1,000.

Early registration for the exam gives you enough time to study and prepare for your exam. Enroll in AnalystPrep.com study packages and gain access to additional revision materials. Our vast library of practice questions and video lessons will help you practice for the exam and pass it on the first try.