If you are just now starting to study for the CFA Level 1 exam, this guide can help you successfully prepare for the exam in three months. Passing the exam with three months of prep is a daunting task; the attack plan mapped out below seeks to help you slay the dragon.
This study plan is based on notes taken from my journey through the CFA Level 1 exam. There may be some curriculum differences in the next test (CFAI likes to make adjustments from year to year), so be sure to compare this guidance with the official CFAI books for your exam.
At this point, you will probably need at least 20-25 hours of study per week, and more as the test date approaches.
Purchase two (2) 100 page notebooks. One is for notes; the other for practice problems and tests. As you read each section, make notes of the concepts you believe are most likely to be tested.
Make flash cards for key formulas and lists. I made about 250. They are easy to carry around and allow you to study while waiting in lines, riding the bus, etc.
The Level I exam will contain 240 questions. Many students struggle with the time pressure. The only way to prep for this is through practicing and practicing under a time constraint. Check CFA Level I Authority, our Study Notes, Practice Questions, and Mock exam, that helps you prepare for the exam in a focused way.
Practice tests need to be worked into the schedule below. I recommend taking at least three to five under exam-like conditions. On weeks in which you do not take a practice exam, prepare to do about 100 practice questions (and more, if possible).
The dates below assume that you are writing the exam in December.
September 6-25 – Ethics, Quant, and Econ
Ethics will cover the code and standards, plus GIPS. Expect this to be 10 – 15% of your questions. These are critical questions. If you have a borderline score Ethics could be the deciding factor. Use flash cards so you can easily review this material as you work through later sections.
Quant is very intimidating for many L1 candidates. Those of you with stats backgrounds will find a mix of review and new material. Expect Quant to be 10 – 15% of your questions. You gotta know the time value of money, return/yield calculations, measures of central tendency (ex. mean) and dispersion (ex. standard deviation), confidence intervals, and general hypothesis testing. You will also see the Sharpe ratio, correlation, covariance, and return variance of a two asset portfolio. These latter concepts appear in multiple sections, across all three levels. Do yourself a favor and learn them now. Everything mentioned above is flash card worthy. Also, some of these problems can be time consuming, so you must practice and know how to do it before test day. Lastly, you will see some more obscure formulas. Do not beat yourself up over them. You may miss a question or two, but mastery of the core material will get you the pass.
Econ should be a review of some general micro and macro principles from your college days. Expect this to be ~10% of the test. Look for a micro focus on elasticity, efficiency and surplus, firm level economics, cost curves, the impact of government action on firms, and market structures. On the macro side, look for the business cycle, aggregate supply-aggregate demand, banking systems, monetary policy, and fiscal policy. You will see formulas in Econ, but not as complex as quant. I would say the micro side is more formulaic and macro is more conceptual.
September 26-October 16 – Financial Statements and Corporate Finance
The combination of FSA and Corporate Finance could be the largest test section, covering 25-30% of the questions. This material also represents building blocks for the L2 exam; give this section massive respect.