cfa level 1 preparation

CFA Level 1 Preparation: The Comprehensive Guide in 2022

This post ensures that you understand what you're up against in CFA Level 1, answering the key problems you should consider before your CFA level 1 preparation.

May 16, 2022

According to the CFA Institute, the average annual pass percentage for the CFA Level 1 exam over the last ten years has been 42%. Only determined candidates are likely to pass the exam, so be prepared to make the necessary sacrifices and exert the necessary effort.

Giving oneself ample time to study is one of the most significant approaches for CFA level 1 preparation. Candidates can tailor their preparation for the CFA Program to their specific needs and circumstances.

In this blog post, we will discuss how to prepare for your CFA Level 1 exam with your planned time and effort.

How Long To Study For CFA Level 1?

cfa level 1 preparation

According to the CFA Institute’s Candidate Survey from June 2019, the average Level 1 candidate studied for 303 hours. This is consistent with our experience, which indicates that about 300 hours of study is required to pass Level 1.

However, your time is your most valuable investment in the CFA, so use it wisely. Successful candidates report spending an average of 323 hours studying for the CFA exam, according to the CFA Institute.

Those with a weak background in the subject matter may require more CFA level 1 preparation time than those with a good background in the disciplines covered by the CFA curriculum. Let’s utilize this estimate of 323 hours of reading and practice hours as a starting point for a study plan.

The CFA Level 1 test introduces you to 10 main subjects in investment analysis and ethics, laying the groundwork for Levels 2 and 3 of the CFA program.

To beat CFA Level 1, we must first comprehend what it is about. So, let’s go over some frequently asked questions.

How Difficult Is CFA Level 1?

CFA Level 1 is the easiest of the three tests to pass after passing all three. The pass percentage for CFA Level 1 in August 2021 was 26%.

While Level 1 covers a wide range of topics, it does not go into great detail about each concept because the goal is to get all candidates to the same knowledge level before moving on to Level 2. It is doable and reachable with some study time, regardless of whether you have any prior financial experience.

We found some useful statistics on this (see table below) in the spirit of objectivity: The best evidence we have comes from the average study hours reported by actual candidates in the CFA Institute’s June 2019 Candidate Survey: Level 1 has the shortest average study hours at 303.

 CFA Level 1CFA Level 2CFA Level 3  
Average Study Hours
​(June 2019 CFA Institute Survey)
Number of Pages ​in CFA Curriculum3.2953.252.564
Number of Topics Tested10106
Number of Readings604735

What is the format of the CFA Level 1 exam? 

  • The CFA Level 1 computer-based test has 180 multiple-choice questions in total, divided into two 90-question sections of 2 hours and 15 minutes each.
  • Each question should be given 1.5 minutes (90 seconds) on average.
  • Each multiple-choice question has three possible answers.
  • The first exam session lasts two hours and fifteen minutes and covers four topics: ethics, quantitative methods, economics, and financial reporting and analysis.
  • The other six topics are covered in the second session (2 hours 15 minutes): corporate finance, equity, fixed income, derivatives, alternative investments, and portfolio management.
  • There are no fines or negative marks for incorrect responses, and all questions are equally weighted.

How To Prepare For CFA Level 1?

cfa level 1 preparation

Can I study for CFA Level 1 on my own? Yes, that is absolutely possible.

It actually depends on your learning and study approach. Some visual learners learned better in video or in-person seminars, while some get easily distracted and prefer to study in a quiet library corner. 

However, it’s important that you should have a very strong preparation. Now, let’s talk about CFA preparation for Level 1 in 323 hours.

Make your CFA study plan

Create a study plan that fits you based on your work/life responsibilities. It not only keeps track of your progress, but it also pinpoints weak areas, provides practice exam score benchmarks, and even forecasts your CFA exam result!

Reading materials of 10 Topics

Ten topics, 19 study sessions, and 57 readings are covered in the CFA Level 1 test. In the exam, each subject bears a distinct weight.

Allocating study time depending on the weight of each topic is a useful method to manage your study time. If you give yourself 323 hours and four months (120 days) to study, the table below highlights how to best organize your study time for the main CFA exam topics. Use this table as a guide and tailor your study regimen to your own needs.

Topic AreaWeightHours based on 323-hour scheduleDays to allocate  
Ethical and Professional Standards15%–20%5420 days
Quantitative Methods8%–12%3112 days
Economics8%–12%3112 days
Financial Reporting and Analysis13%–17%4617 days
Corporate Finance8%–12%3111 days
Portfolio Management5%–8%208 days
Equity Investments10%–12%3512 days
Fixed Income10%–12%3512 days
Derivatives5%–8%208 days
Alternative Investments5%–8%208 days
Total1323120 days

On average, at least four months should be set out for readings, with the final month reserved for revision and practice. If you read two hours each day on weekdays and eight hours on weekends, you’ll finish all of the readings in roughly 17 weeks (four months).

The optimal time to study for the CFA is on weekends and non-working days. You won’t have time for CFA Level 1 Mock Exam during the week, let alone end-of-chapter questions. Plan to spend an additional two to four hours on practice problems over the weekend. Remember that the more you practice, the better your chances of passing the exam are.

Do not forget end-of-chapter questions

Remember to answer end-of-chapter questions and keep track of your progress by writing down your answers. End-of-chapter questions will provide you with an overview of the subjects that will be assessed on the exam, allowing you to concentrate more on them. Furthermore, these questions will highlight your weakest areas, which you must enhance.

What to do in the last 4 weeks?

The CFA tests are to be computer-based in January 2021, after decades of paper-based exams. Beginning in 2022, the Level 1 exam is offered in February, May, August, and November, as well as the Level 2 and Level 3 exams in February and August and May and November.

Allow four weeks before the exam date to review questions and take practice sessions, taking these dates into consideration. You should practice more intensely than in prior periods throughout this time. Mock tests will be provided by the CFA Institute.

For a 4-month timeline, you can follow the timeline below:

  • Months 1–2: Reread the materials in depth and practice the End of Chapter questions, noting down any areas you don’t understand or get wrong frequently.

  • Month 3: This month is jam-packed with question practice and last-minute material studies in areas where I still need to improve. Practice makes perfect, as they say.

  • Month 4 (last month): This is the final push; make use of any study leave (+ some personal holidays, which we highly encourage) the week or two before exams to fully focus on completing the remaining practice exams and rereading texts in areas where you have identified weaknesses.

Follow your study plan and routine

After you’ve devised an appropriate study schedule, you should establish a pattern around it so that it becomes second nature.

For example, longer 8-10 hour study sessions in the mornings can help you study more effectively (with breaks in between of course). For efficient study sessions, know when, where, and how you work best and be honest about it.

In the end, you spent a little more than 300 hours studying on weekends — more like 350 hours.

It was difficult to manage to study for the CFA with working a full-time job, but it was possible if you followed your study schedule.

What Are CFA Level 1 Preparation Tips?

cfa level 1 preparation

Now let’s look at some tips during your preparation!

Inform your friends and family about your social expectations

Let them know ahead of time that you may be unavailable for dinners and social events for a period of time, particularly during the 4-5 months leading up to the exam. They’ll forgive you later when you celebrate your accomplishments. 

Ethics must not be overlooked

Some students may assume it’s one of those “do the right thing” questions that don’t necessitate much research. During the practice examinations period (1-2 months before the exam date), several students committed mistakes and hurried to cover that topic. Ethics is not always intuitive, and you must learn it.

Use the End of Chapter Questions (topic grasp indicator)

The CFA curriculum includes several practice questions at the conclusion of each chapter for candidates to try out. These are normally a little easier than exam questions, but they’re still quite valuable for testing your fundamental knowledge of the content. Do them all, and more importantly, keep track of your grade as a percentage in your study plan. That will serve as a useful signal in the future to determine which topics you are strong or weak in.

Take notes from other candidates

It’s always a good idea to look at previous exam patterns. The free Level 1 Commandments are also quite useful.

Understand how to use a calculator

Whether it’s the BA II Plus or the HP12C, make sure you’re comfortable, fast, and accurate with it before the exam. To make sure you don’t forget anything, look over the BA II Plus and HP12C calculator tips. Also, always erase your previous work before starting a new computation for a question.

Practice makes perfect

Given Level 1’s multiple-choice format, the more questions you can tackle, the better. It’s important to devote at least a month before tests to this, as you’ll always find new areas where you need to improve.

Exam time management is essential

Level 1 is all about breadth, and you’ll need to be merciless with your time management (maximum of 1.5 minutes for each multiple-choice question) to avoid falling down this slippery slope and losing ground. Allow yourself some time to consider the questions, but after the timer has expired, pick an answer and move on! Because there are no consequences for incorrect replies, guessing is preferable to leave it blank.

Find a study partner

It will be extremely beneficial to you, and not only academically. It’s good to have someone to go out to lunch with or complain about the dreaded FRA questions with, or simply play foosball with during your lunch break.

Look after yourself

It’s only the first of three battles, so prioritize your health by striking a balance between study, play, and sleep. This marathon will not be won by drinking three coffee shots five nights in a row! To concentrate better in those study periods, incorporate some exercise, get enough sleep, and, most importantly, eat healthily. It pays off in the long run; after all, it is a marathon.

Key Takeaways

  • A comprehensive study strategy is required to pass the CFA Level 1 exam, which has a 42 percent pass rate over the last decade.
  • Successful Level 1 applicants study for the exam for about 300 hours.
  • To finish all of the reading material, set aside at least four months (about 17 weeks).
  • However, don’t overlook the end-of-chapter questions. They will aid in the discovery of flaws.
  • Allow four weeks before the exam date to review questions and practice sessions, as well as at least one day at home to simulate exam settings.

The Bottom Line

Whether you’ve attended every finance class or are completely new to the field, the key to passing the CFA exam is to be excellent at taking it. The answer to passing the CFA Level 1 exam is to make sure at least study 303-hour CFA level 1 preparation in an organized way. Although Level 1 can be intimidating, the CFA Level 1 strategy tips provided above should help you prepare for the exam. Hopefully, after studying for the exam in a structured way, you will have no trouble passing it.