What Is The Best CFA Level 1 Study Order? [2021 & 2022]

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Level 1 Topic Order • Level 2 Topic Order • Level 3 Topic Order

There are 60 readings in CFA Level 1’s 2022 curriculum (57 readings in 2021’s curriculum). But should you study the topics in sequence? Or is there an optimal CFA Level 1 study order?

It’s one of the popular questions we get in the 300Hours Forum (which, by the way, you can join for free CFA advice).

There’s no right or wrong answer here. Studying the topics chronologically as outlined in the curriculum is fine, especially since 2022’s curriculum moved Ethics readings to the end.

But we thought there may be a slightly better order to study the topics for higher effectiveness. So here’s our outline of the optimal topic study order (and why) for both CFA Level 1’s 2021 and 2022 curriculum.

Hope this helps you prepare for your CFA Level 1 exam – let’s dive in!


Recommended Study Plan for CFA Level 1 Topics (2021 and 2022’s Curriculum)

Best CFA Level 1 study order

For CFA Level 1, the flow of topics is arranged as:

  • Ethics → Tools → Asset Classes → Portfolio Management, for 2021’s curriculum;
  • Tools → Asset Classes → Portfolio Management → Ethics, for 2022’s curriculum.

The good news is, CFA Institute has confirmed that the design of the readings in each study session do not assume that the candidate approaches the study sessions in any particular order.

With these in mind, we have developed our own study plan to ensure candidates have sufficient time to:

  • master the difficult and high-weighted topics,
  • balance the need to stay motivated, alternating between the tougher and easier topics, whilst
  • being mindful of the sensible linkages between topics to maximize absorption.

In short, this led me to the following suggested CFA Level 1 study order for both 2021 and 2022’s curriculum:

Level 1 Topic Study Order2021’s Curriculum
(57 readings in total)
2022’s Curriculum
(60 readings in total)
1) Quantitative Methods (first part)Reading 6-8Reading 1-3
2) Financial Reporting & Analysis (FRA)Reading 19-30Reading 15-26
3) Fixed IncomeReading 42-47Reading 39-44
4) EquityReading 39-41 first, then 36-38Reading 36-38 first, then 33-35
5) Alternative InvestmentsReading 50Reading 47
6) DerivativesReading 48-49Reading 45-46
7) Corporate Finance / Corporate Issuers (2022)Readings 31-35Readings 27-32
8) Quantitative Methods (second part)Readings 9-11Readings 4-7
9) Portfolio ManagementReadings 51-57Readings 48-55
10) EconomicsReadings 12-18Readings 8-14
11) EthicsReadings 1-5Readings 56-60

1st: Quantitative Methods (1st part, 8-12% exam weight)

What Is The Best CFA Level 1 Study Order? [2021 & 2022] 1

We approach Quantitative Methods in 2 parts.

In this first part, Reading 1-3 (Reading 6-8 for 2021’s curriculum) forms the absolute foundation of the CFA Level 1 syllabus. Covering concepts such as the Time Value of Money (TVM), Present & Future Values, and Annuities. A solid understanding of these topics will pay dividends later in areas such as Asset Valuation and Portfolio Management. 

During the course of this study session, you will also be expected to get to grips with the official CFA calculator, the Texas Instruments BA II Plus. Check out this BA II Plus calculator guide for more tips.


2nd: Financial Reporting and Analysis (13-17% exam weight)

Covering the interactions of the Balance Sheet, the Income Statement and the Cash Flow Statement, Readings 17-19 (Readings 21-23 for 2021’s curriculum) are particularly useful if you are unfamiliar with the basics of accounting.  

You will be focusing on the specific categories of assets and liabilities that are typically susceptible to alternative accounting policies and estimates. 

As an analyst, the ability to interpret company accounts and economic capacity is vital so this area is a significant piece of your learning. Topics covered here include: Inventory Costing (LIFO/FIFO), Depreciation, Intangible Assets, Deferred Taxes, Leasing and Accounting for Bonds.


3rd: Fixed Income (10-12% exam weight)

What Is The Best CFA Level 1 Study Order? [2021 & 2022] 2

Now we will look at the block of Asset Classes readings, which I recommend starting with Fixed Income first (Readings 39-44 for 2022, Readings 42-47 for 2021).

Having mastered the concept of TVM in Quantitative Methods, you will be well positioned to quickly understand the topics covered in this session.


4th: Equity (10-12% exam weight)

Next is Equity, which we recommend looking at:

  • Readings 36-38 first, then 33-35 for 2022’s curriculum.
  • For 2021, this translates to Reading 39-41 first, then 36-38.

Readings 36-38 for 2022 (Reading 39-41 for 2021) focuses on the analysis, valuation and characteristics of equity securities. Once again your knowledge of TVM will prove beneficial as you can move quickly from an understanding of equity securities to valuing the equity itself.

With a clear understanding of equity securities from the previous readings, you should be able to move through Readings 33-35 for 2022 (Readings 36-38 for 2021) with relative ease.


5th: Alternative Investments (5-8% exam weight)

What Is The Best CFA Level 1 Study Order? [2021 & 2022] 3

This is relatively small reading that can be easily overlooked – but do so at your peril.

Covering topics such as Real Estate and Private Equity (as well as added content on private debt, timber, and farmland in 2022’s curriculum), this is a relatively straight forward topic area.

It’s a topic you cannot skip, since it has relatively high topic weight given the number of reading.


6th: Derivatives (5-8% exam weight)

Building the conceptual framework for the understanding of basic Derivative Securities, Forwards, Future Options and Swaps, these readings will ensure you are competent in your comprehension of these different financial instruments, which form a foundation for future levels.


7th: Corporate Finance / Corporate Issuers (8-12% exam weight)

What Is The Best CFA Level 1 Study Order? [2021 & 2022] 4

While there is some overlap in this study session with the accounting section of the syllabus, notably Financial Analysis Techniques, as well Net Present Value and Internal Rates of Return in Quantitative Methods, topics such as Budgeting the Cost of Capital and Measures of Leverage are the foundations of this study session. 

Corporate Governance also features in this topic, and is definitely one that should be reviewed closer to the exam.


8th: Quantitative Methods (8-12% exam weight)

Jumping back into the world of Quantitative Methods (second part), Readings 4-7 for 2022 (Reading 6-8 for 2021’s curriculum) are often viewed as one of the more difficult areas of the syllabus to master.

Introducing concepts such as sampling and estimation as well as hypothesis, you should be aware that perceived difficulty of these topics may slow the pace of your studies. You should therefore build in adequate time to tackle this session.

For 2022, there is also a new added chapter on linear regression that will help ease the transition to Level 2.


9th: Portfolio Management (5-8% exam weight)

Portfolio planning and the construction process are critical topics in this study session.

In addition, the area of diversification is introduced, and statistical concepts such as standard deviation covered previously are applied in the context of Portfolio Management.


10th: Economics (8-12% exam weight)

What Is The Best CFA Level 1 Study Order? [2021 & 2022] 5

Economics covers three main areas and takes time to get through:

  • Microeconomic and Macroeconomic Analysis (Readings 8-11 in 2022, Readings 12-15 in 2021): Important particularly if you are new to the world of Economics, these readings introduce the basic concept of supply and demand. Once you have grasped this, you can expand your knowledge to cover the output and costs incurred by firms – fixed, variable and marginal costs. Covering basic macroeconomic concepts this study session begins with the analysis of aggregate demand, supply and output combined with examination of economic growth. Moving onto business cycles in different economies, this session concludes with a look at the fiscal and monetary policy as a backdrop for mitigating economic activity.
  • Monetary and Fiscal Policy, International Trade, and Currency Exchange Rates (Readings 12-14 in 2022, Readings 16-18 in 2021): This study session explains the flow of goods and services, physical and financial capital across countries. It also provides an overview of currency market fundamentals.

Lastly: Ethical and Professional Standards (15-20% exam weight)

What Is The Best CFA Level 1 Study Order? [2021 & 2022] 6

This is a crucial topic which isn’t easy, so don’t leave it to the last week. That’s too late.

Ideally, have a review early in your studies and then hit it hard in the final month. Make sure you understand the rule and regulations that make up the Ethics syllabus – scenarios in the CFA curriculum will allow you to put these conventions into a practical context. The questions will be scenario-based so make sure you can apply the rules to hypothetical situations.


If you have any questions about the CFA Level 1 study order, comment below!

P.S – these resources may be helpful:

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7 thoughts on “What Is The Best CFA Level 1 Study Order? [2021 & 2022]”

  1. Hi, I’ve been studying with the 2020 version (study sessions) from the cfa website while I was waiting for the results of the CFA scholarship. Would I need to study again with the newest version after the registration?

    Reply

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