What Is The Best CFA Level 1 Study Order?

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

There are 57 readings in CFA Level 1 curriculum. But should you study the topics in order? Or is there an optimal CFA Level 1 study order?

We’ve received questions like these time and again in the 300Hours forum (which, by the way, you can join for free CFA advice).

In order to get the best answers, we reached out to John Bowman, CFA (previously managing director & co-lead of Education at CFA Institute) and his advice to readers is below:

While there is no hard fast “official” order of the readings, the published flow mirrors the content progression of the competences taught in the Program.

For Levels 1 & 2 it is Ethics -> Tools ->Asset Classes -> Portfolio Management.

Since Level 3 is basically all Portfolio Management, the flow follows the portfolio management process and is Ethics -> PM Framework -> Asset Class Strategies -> Client Needs -> Execution -> Performance Evaluation.  

However, the design of the readings in each study session do not assume that the candidate approaches the study sessions in any particular order. Generally the same holds true for readings within a particular study session but the best approach is to follow the order of the readings within a study session.  Alternatively, some candidates tackle areas of weakness or less familiarity first.  We would also stress to cover Ethics both at the beginning and end given its importance.

So what should be your ideal CFA Level 1 study order?

We have some advice in this area as well. Rob Thakur, CFA, Head of Fitch Learning Professional Qualifications, has also chipped in on this subject with his expertise.

Rob will be analyzing each study session, what you should expect, and recommend a plan with the best CFA Level 1 study order.

We hope this helps you prepare for your CFA Level 1 exam!

The Recommended Study Plan for CFA Level 1 Topics

Best CFA Level 1 study order

In the process of guiding candidates to passing their CFA exams, I’ve determined and used an alternate order to approach CFA readings.

This study structure has been followed by over 34,000 CFA exam candidates over 16 years.

1st: Quantitative Methods (Readings 6-8)

Quantitative Methods is 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 (Reading 19-30)

Covering the interactions of the Balance Sheet, the Income Statement and the Cash Flow Statement, Readings 21-23 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: Asset Classes (Readings 36-50, in the following order)

What Is The Best CFA Level 1 Study Order? 1

With a multitude of asset classes covered in the syllabus, here’s my suggested study order:

  • Fixed Income (Readings 42-47): Having mastered the concept of TVM in Quantitative Methods (Readings 6-8) you will be well positioned to quickly understand the topics covered in this session.
  • Equity (Readings 39-41, then 36-38): Readings 39-41 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 36-38 and its topics with relative ease.
  • Alternative Investments (Reading 50): This is relatively small study session that can be easily overlooked – but do so at your peril. Covering topics such as Real Estate and Private Equity, this is a relatively straight forward topic area. But while it makes up only 3% of the exam, that 3% could make a significant difference to your overall mark!
  • Derivatives (Readings 48-49): 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.

4th: Corporate Finance (Readings 31-35)

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.

5th: Quantitative Methods (Readings 9-11)

Jumping back into the world of Quantitative Methods, this study session is 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.

6th: Portfolio Management (Readings 51-57)

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.

7th: Economics (Readings 12-18)

What Is The Best CFA Level 1 Study Order? 2

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

  • Microeconomic and Macroeconomic Analysis (Readings 12-15): Important particularly if you are new to the world of Economics, these readings introduce the basic concept of supply and demand (Reading 12). Once you have grasped this, you can expand your knowledge to cover the output and costs incurred by firms – fixed, variable and marginal costs (Reading 13). Covering basic macroeconomic concepts this study session begins with the analysis of aggregate demand, supply and output combined with examination of economic growth (Reading 14). 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 (Reading 15).
  • Monetary and Fiscal Policy, International Trade, and Currency Exchange Rates (Readings 16-18): 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.

Last, but not Least: Ethical and Professional Standards (Readings 1-5)

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 CFAI 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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