CFA Level I study guide
Every chapter of all four papers, broken into 555 topics. Each topic shows the concept, a step-by-step way to solve questions, the quickest method for the exam, the mistakes students make and worked examples.
Paper 1: CFA Level I Exam
Objective, MCQ · 102 chaptersStatistical Distributions for Financial Asset Prices and Returns
- Discrete and Continuous Random Variables
- Discrete and Continuous Uniform Distributions
- Binomial Distribution and Binomial Tree Models
- Normal Distribution and Standardization (Z-scores)
- Safety-First Ratio and Shortfall Risk
- Lognormal Distribution and Continuously Compounded Returns
- Student's t, Chi-Square and F Distributions
- Monte Carlo Simulation
Capital Investments and Capital Allocation
- Capital Budgeting Process and Project Categories
- Cash Flow Estimation for Capital Projects
- NPV and IRR Investment Decision Rules
- Payback, Discounted Payback, ROI and Profitability Index
- Conflicts Between NPV and IRR Rankings
- Real Options in Capital Budgeting
- Capital Rationing and Project Risk Analysis
- Common Capital Budgeting Pitfalls and Valuation Effects
Analyzing Income Statements
- Income Statement Components and Format
- Revenue Recognition (IFRS 15 and ASC 606)
- Expense Recognition and Inventory Methods
- Non-Recurring Items and Discontinued Operations
- Earnings per Share (Basic and Diluted)
- Common-Size Analysis and Profitability Ratios
- Comprehensive Income and Other Comprehensive Income
Analyzing Balance Sheets
- Balance Sheet Components and Formats
- Current Assets, Inventories and Receivables
- Non-Current Assets: PP&E, Intangibles and Goodwill
- Financial Instruments and Measurement Bases
- Liabilities, Deferred Items and Provisions
- Owners' Equity and Statement of Changes in Equity
- Common-Size Analysis and Liquidity/Solvency Ratios
Analysis of Income Taxes
- Accounting Profit vs Taxable Income
- Deferred Tax Assets and Liabilities
- Temporary vs Permanent Differences
- Tax Base and Carrying Amount of Assets and Liabilities
- Valuation Allowance and Tax Loss Carryforwards
- Tax Rate Changes and Effective Tax Rate Reconciliation
- Income Tax Disclosures and Analyst Adjustments
Credit Risk
- Credit Risk Basics: Default Risk and Loss Severity
- Capital Structure, Seniority and Recovery Rates
- Credit Ratings and Their Limitations
- Traditional Credit Analysis: The Four Cs
- Credit Spreads and Spread Measures
- Structural and Reduced-Form Credit Models
- Securitized Debt and Municipal Credit Considerations
Pricing and Valuation of Forward Contracts and for an Underlying with Varying Maturities
- Forward Contract Pricing Principles
- Forward Pricing for Assets with No Cash Flows
- Forwards on Assets with Income or Carry Costs
- Valuing Forward Contracts During Their Life
- Forward Rate Agreements (FRAs) Pricing and Valuation
- Forwards on Currencies and Interest Rate Parity
- Forward Pricing Across Varying Maturities
Code of Ethics and Standards of Professional Conduct
- Preamble, Code of Ethics and Adoption of the Standards
- Professionalism: Standards I(A) to I(D)
- Integrity of Capital Markets: Standards II(A) and II(B)
- Duties to Clients: Standards III(A) to III(E)
- Duties to Employers: Standards IV(A) to IV(C)
- Investment Analysis, Recommendations and Actions: Standard V
- Conflicts of Interest: Standards VI(A) to VI(C)
- Responsibilities as a CFA Institute Member or Candidate