In a CFA Institute survey, 76% of respondents saw increased salary thanks to their CFA® charter within 12 months of earning it.
Yes, you read that correctly!
Needless to say, becoming a Chartered Financial Analyst is a smart move—and it all starts with passing the CFA® Level I Exam. In this guide, I’ll break down the exam format, topic weights, helpful tips for tackling those tricky multiple-choice questions, and even share the best CFA® prep courses to help you pass Level I on your first try.
Key Takeaways
- Understand the Format: The CFA® Level 1 exam consists of 180 multiple-choice questions split into two sessions of 90 questions each, totaling 4 hours and 30 minutes.
- Focus on Key Topics: Ethical and Professional Standards and Financial Statement Analysis carry significant weight—mastering these will give you an edge.
- Practice is Essential: Regular practice with exam-style questions and mock exams is crucial for success.
- No Penalty for Guessing: Every question is equally weighted, and there’s no penalty for wrong answers—always make an educated guess if you’re unsure.
- Choose the Right Prep Course: Resources like AnalystPrep, Kaplan Schweser, and The Princeton Review can help you structure your study plan and boost confidence.
CFA® Level 1 Exam Structure and Length
The CFA® Level 1 exam tests your knowledge across ten core topics with a total of 180 multiple-choice questions. These questions are split evenly into two sessions of 90 questions each.
Each session runs for 2 hours and 15 minutes, giving you a total of 4 hours and 30 minutes of exam time. There’s also an optional 30-minute break between sessions, so make a plan for how you’ll recharge during that downtime.
Key Details:
- Number of Questions: 180
- Sessions: 2 (90 Questions Each)
- Total Time: 4 Hours and 30 Minutes (2 Hours and 15 Minutes Per Session)
- Time Per Question: 90 Seconds
- Question Format: Multiple-Choice Questions (3 Options, Not 4)
- CFA® Exam Date Windows: February, May, August, and November
Pro Tip: Only two calculator types are allowed in the exam room: the Texas Instruments BA II Plus and the Hewlett Packard 12C. Get your calculator early and practice with it!
CFA® Level 1 Exam Topics and Weights
The exam tests your fundamental understanding of finance and investment concepts. Here’s a quick look at how topics are weighted and divided across the two sessions:
| Session | Topic | Weight |
|---|---|---|
| 1 | Ethical and Professional Standards | 15-20% |
| 1 | Financial Statement Analysis | 11-14% |
| 1 | Corporate Issuers | 6-9% |
| 1 | Economics | 6-9% |
| 1 | Quantitative Methods | 6-9% |
| 2 | Equity Investments | 11-14% |
| 2 | Fixed Income | 11-14% |
| 2 | Portfolio Management | 8-12% |
| 2 | Alternative Investments | 7-10% |
| 2 | Derivatives | 5-8% |
The topic Ethical and Professional Standards carries the most weight, so master ethics to give yourself an edge. Financial Statement Analysis, Equity Investments, and Fixed Income are heavily weighted and worth some extra study time.
Question Format: What to Expect
The CFA® Level 1 exam uses multiple-choice questions designed to test your understanding clearly and fairly. Each question consists of:
- A Stem: This is the central question, statement, or data table that sets the context.
- Three Answer Choices: Labeled A, B, and C, with only one correct answer.
These questions come in two straightforward styles:
- Sentence Completion: You’re given a statement with a missing piece. Your job is to choose the best way to complete it from your options.
- Example:
One of the main objectives of portfolio diversification is to:
A. Eliminate all types of risk
B. Reduce unsystematic risk
C. Increase the correlation between asset returns
- Example:
- Direct Questions: These simple, straightforward questions ask you to identify the most appropriate answer.
- Example:
Which financial ratio is primarily used to measure a company’s liquidity?
A. Current ratio
B. Debt-to-equity ratio
C. Return on equity (ROE)
- Example:
(If you’re curious, the answers are B and A.)
Exam Structure Notes
- Questions avoid tricky phrasing. You won’t see words like “not” or “except.”
- Confusing answer choices like “all of the above” or “none of the above” are never used.
- Answers follow a logical order. If the options are numerical, they’ll go from smallest to largest. If they’re word-based, they’re usually ordered by length.
Pro Tip: Since all questions are equally weighted and there’s no penalty for guessing, don’t leave any blanks! If you’re stuck, eliminate the least likely options and make an educated guess.
8 Tips for Tackling CFA® Level I Multiple-Choice Questions
When you’re up against 180 multiple-choice questions (MCQs) on the CFA® Level 1 exam, smart strategies can make a huge difference. Here are some practical tips to help you conquer CFA® exam questions with confidence:
- Read the Question Stem Carefully: Before looking at the answer options, make sure you understand what the question is asking. Misreading the question is one of the most common pitfalls. If necessary, rephrase it in your own words—this helps you focus on the key point without getting distracted by answer choices.
- Predict the Answer First: Try to come up with the answer independently before looking at the options. This keeps you from getting swayed by incorrect choices designed to confuse you. Once you’ve predicted an answer, scan the options to see if your choice is there.
- Benchmark the Best Option: Start with the first answer choice and decide if it seems reasonable. If it does, mentally mark it as your “benchmark” answer. As you review the other options, compare each to your benchmark and choose the strongest contender. This prevents second-guessing.
- Don’t Overthink—Take It at Face Value: The CFA Institute doesn’t use “trick questions.” Avoid overanalyzing or imagining unlikely scenarios where multiple answers could be correct. Stick to the information provided and choose the answer that best fits the question.
- Pay Attention to Qualifiers: Words like “most likely,” “least likely,” “best described,” or “most accurate” are common in CFA® questions. These qualifiers set the tone for what the question is looking for, so underline them to stay focused on the task.
- Watch for Clues in the Question: Look for grammatical clues—correct answers often align in tense, subject, and number with the question. If two options are opposites, one is likely the right pick. For numerical answers, eliminate values that seem far too large or small.
- Trust Your Instincts: If you’re stuck between two options, go with the one that feels more accurate. Research shows that our instincts are often correct, even if we can’t pinpoint why. Just make sure the answer directly addresses the question.
- Review Carefully, But Don’t Overchange: If time permits, go back and review flagged questions. However, avoid changing your answers unless you’re positive you made a mistake—your first choice is often correct.
CFA® Level 1 Prep Courses
Choosing the right prep course can make all the difference in your CFA® Level 1 journey. Here are three excellent options to consider:
- AnalystPrep: A top-notch option for practice questions, mock exams, and entertaining & engaging video lectures. Their study materials are concise and user-friendly, and their budget-friendly 3-level package offers lifetime access.
- Kaplan Schweser: Kaplan is a favorite among CFA® candidates for its in-depth study guides, question banks, and excellent video lectures. They offer a structured approach and a reputation that speaks for itself.
- The Princeton Review: Known for their expert instructors and engaging teaching style, The Princeton Review offers strong resources for mastering challenging topics.
Check out my detailed comparison of the best CFA® prep courses to help you pick based on your preferences.
Final Thoughts
The CFA® Level 1 exam marks the beginning of your journey toward earning the coveted CFA® charter, a credential that can significantly enhance your career opportunities in the finance and investment industry. With 180 multiple-choice questions covering essential topics like Ethics, Financial Statement Analysis, and Equity Investments, the exam requires a well-rounded understanding of foundational concepts and a strategic approach to time management.
To maximize your success, focus on mastering high-weight topics, practicing regularly with mock exams, and developing efficient strategies for tackling multiple-choice questions. Remember, there’s no penalty for guessing, so use every opportunity to boost your score. Additionally, investing in a reliable prep course—such as AnalystPrep, Kaplan Schweser, or The Princeton Review—can provide the structure and resources needed to stay on track.
FAQs
Yes, the CFA® Level 1 exam is challenging, as it tests a broad range of topics across finance and investment concepts. However, the minimum passing score is estimated to be between 60 and 70%, which is certainly achievable for many candidates.
The salary of a CFA® charterholder varies based on experience, location, and role. On average, CFAs can earn between $80,000 and $200,000+ annually, with investment professionals in senior roles earning significantly more.
The CFA® Level 1 exam cost includes a one-time enrollment fee of $350 and an exam registration fee that ranges from $990 to $1,290, depending on when you register. Early registration can save you money. The level II CFA® exam costs the same, but level III costs a bit higher at $1,090 or $1,390.
Both certifications are challenging but differ in focus. The CFA® program curriculum focuses on financial analysis and portfolio and risk management, while the CPA emphasizes accounting and auditing. The difficulty depends on your background and career goals.
CFA® Level 1 is the first step toward earning the CFA® charter. It builds a foundational understanding of finance, investments, and ethical practices, preparing candidates for careers in the investment industry.
