How to Prepare for the CFA Level 1 Exam – The CFA Level 1 exam is a challenging test that requires a lot of dedication and discipline to pass. The exam covers 10 topics, 19 study sessions, and about 60 readings, each with different weights and difficulty levels. According to the CFA Institute, the average annual pass rate over the last 10 years for the CFA Level 1 exam has been 44%. For the May 2022 exam, the pass rate was just 38%. This means that only the most prepared candidates are likely to succeed, so you need to have a solid study plan and follow it consistently.
In this article, we will share some tips and strategies on how to prepare for the CFA Level 1 exam and increase your chances of passing it on your first attempt.
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How to Prepare for the CFA Level 1 Exam
Estimate Your Study Time
One of the most important factors in your exam preparation is how much time you spend studying. The CFA Institute recommends no less than 300 hours of study for each level of the exam. However, this is only a guideline and your actual study time may vary depending on your background, learning style, and availability.
A good way to estimate your study time is to use the average reported by successful candidates. According to the CFA Institute, successful candidates report that they spent on average about 323 hours in total preparing for the CFA exam. This means that you should aim for at least 323 hours of reading and practice hours as a benchmark.
To achieve this goal, you need to plan your study schedule well in advance and stick to it. A common mistake that many candidates make is to start studying too late or too sporadically, which leads to cramming and stress before the exam. Ideally, you should start studying at least four months (approximately 17 weeks) before the exam date and allocate your study time based on each topic’s weight.
For example, if you read two hours per day on weekdays and eight hours on weekends, then it will take about four months to complete all of the readings. You can use the table below to see how much time you should spend on each topic area based on this schedule.
| Topic Area | Exam Weight | Reading Hours |
|---|---|---|
| Ethical and Professional Standards | 15% | 48 |
| Quantitative Methods | 10% | 32 |
| Economics | 10% | 32 |
| Financial Reporting and Analysis | 15% | 48 |
| Corporate Finance | 10% | 32 |
| Equity Investments | 11% | 36 |
| Fixed Income Investments | 11% | 36 |
| Derivatives | 6% | 19 |
| Alternative Investments | 6% | 19 |
| Portfolio Management | 6% | 19 |
| Total | 100% | 323 |
Of course, this is only an example and you can adjust your study time according to your own pace and preferences. However, make sure that you cover all of the topics and readings thoroughly and don’t neglect any area.
Review the Learning Outcomes
The CFA Level 1 exam is based on the learning outcomes (LOs) that are stated at the beginning of each reading in the curriculum. The LOs describe what you are expected to know and do after completing each reading. They are also the basis for the exam questions, so you need to pay close attention to them.
A good way to review the LOs is to use them as a checklist after finishing each reading. You can also use them as a guide for creating your own notes and summaries of the key concepts and formulas. By doing this, you will reinforce your understanding of the material and identify any gaps or weaknesses in your knowledge.
Another benefit of reviewing the LOs is that they will help you focus on what is important and relevant for the exam. The CFA curriculum is very comprehensive and detailed, but not everything is equally tested or emphasized. By following the LOs, you will avoid wasting time on unnecessary or trivial information and concentrate on what matters most.
Practice with Questions
One of the best ways to prepare for the CFA Level 1 exam is to practice with questions as much as possible. Questions will help you test your knowledge, apply your skills, and improve your speed and accuracy. They will also expose you to different types of questions and formats that you may encounter on the exam.
There are several sources of questions that you can use for your practice sessions. The first and most important one is the end-of-chapter (EOC) questions that are provided at the end of each reading in the curriculum. These questions are designed to test your comprehension and retention of the material and are aligned with the LOs. You should not skip or ignore these questions, as they will help you reveal your weak areas and reinforce your strong ones.
Another source of questions is the online practice tests that are available on the CFA Institute website. These tests are composed of item sets, which are groups of six questions based on a common vignette or scenario. These tests simulate the actual exam format and difficulty level and provide you with feedback and explanations for each question. You should take these tests periodically throughout your study process and especially in the last month before the exam.
A third source of questions is the mock exams that are also available on the CFA Institute website. These exams are full-length simulations of the actual exam, consisting of 180 questions divided into two sessions of 135 minutes each. These exams will help you assess your readiness and performance under exam conditions and time pressure. You should take at least one mock exam before the actual exam and review your results carefully.
In addition to these sources, you can also use other third-party providers or study materials that offer additional questions and practice tests. However, make sure that these questions are reliable, updated, and consistent with the curriculum and the LOs.
Revise and Review
The last step in your preparation for the CFA Level 1 exam is to revise and review everything that you have learned and practiced. This step is crucial to consolidate your knowledge and confidence before the exam day.
You should allocate at least four weeks prior to the exam date for revision and review. During this time, you should focus on reviewing your notes, summaries, formulas, and key concepts from each topic area. You should also revisit the EOC questions, practice tests, and mock exams that you have taken and analyze your mistakes and areas for improvement.
You can also use various tools and techniques to enhance your revision and review process, such as flashcards, mnemonics, quizzes, study groups, etc. However, avoid introducing any new material or sources at this stage, as they may confuse or distract you from what you have already learned.
One day before the exam, you should relax and rest as much as possible. You should also review the exam policies and procedures, such as what to bring, what not to bring, how to check in, etc. You should also set up your exam environment if you are taking the exam online.
On exam day, you should arrive early at the test center or log in to the online platform well in advance. You should also have a good breakfast, stay hydrated, and manage your time wisely during the exam. Remember to read each question carefully, eliminate wrong answers, guess if necessary, and mark any questions that you are unsure about for later review.
In conclusion, The CFA Level 1 exam is a challenging but rewarding test that requires a lot of preparation and discipline. By following a solid study plan, reviewing the learning outcomes, practicing with questions, and revising and reviewing everything, you can increase your chances of passing it on your first attempt.
We hope that this article has given you some useful tips and strategies on how to prepare for the CFA Level 1 exam. We wish you all the best in your exam journey!
Frequently Asked Questions (F&Qs) How to Prepare for the CFA Level 1 Exam
How long does it take to prepare for CFA?
CFA Institute recommends that you aim to spend at least 300 hours preparing for each level of the CFA Exam.
If you are working full-time, you may need to allow more time to study. You may also need to adjust your study schedule depending on your other commitments, such as family or other obligations.
Can I pass CFA Level 1 in 20 days?
It is possible to pass CFA Level 1 in 20 days, but it is not recommended. The CFA Level 1 exam covers a wide range of material, and it takes most people at least 300 hours of studying to pass. If you only have 20 days to study, you will need to be very efficient with your time and focus on the most important topics. You will also need to take practice exams regularly to assess your progress and identify your weak areas.
Which calculator is allowed in CFA exam?
Only two models of calculators are permitted for the CFA exam: the Texas Instruments (TI) BA II Plus (and its variants) and the Hewlett Packard (HP) 12C (and its editions).