Preparation for all three levels of the Chartered Financial Analyst (CFA) exams require a serious commitment to following a structured study plan. According to the CFA Institute, the average annual pass rate for the last 10 years for the CFA Level I exam is 42%. This statistic shows that only dedicated candidates are likely to pass the exam, so be prepared to make the necessary sacrifices and put in the required effort.

Key Takeaways

  • Passing the CFA Level I exam, which has a 42% pass rate over the last decade, requires following a solid study plan.
  • Successful Level I candidates spend roughly 300 hours preparing for the exam.
  • The best strategy is to leave at least four months (approximately 17 weeks) to finish all the reading material.
  • Don’t neglect end-of-chapter questions, however. They will help reveal weak points.
  • Allow four weeks prior to the exam date to review questions and have practice sessions, while also setting aside at least one day to simulate exam conditions at home.

Your biggest investment in the CFA is your time, so spend it efficiently. According to the CFA Institute, successful candidates report that they spent on average about 323 hours in total preparing for the CFA exam.

The required preparation time can be greater for those with a poor background in the subject matter and less for those who have a strong background in the subjects that the CFA curriculum covers. As a guide for a study plan, let’s use this estimate of 323 hours of reading and practice hours as a benchmark.

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Pass Your CFA Exams on the First Try

Reading Material

The CFA Level I exam covers 10 topics, 19 study sessions, and 57 readings. Each subject carries a different weight in the exam. A good way to manage your study time is by allocating study time based on each topic’s weight. The table below summarizes the distribution of 323 hours of reading on the different exam topic areas.

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Image by Sabrina Jiang © Investopedia 2020

On average, it’s best to leave at least four months for readings and the last month for revision and practicing. If you read two hours per day on weekdays and eight hours on the weekends, then it will take about 17 weeks (four months) to complete all of the readings.

Weekends and nonworking days are the best time to study for the CFA. During the week, you likely will not have time for practice questions, in addition to end-of-chapter questions. Therefore, plan to spend an additional two to four hours during the weekend on practice questions. Do not forget that the more you practice, the higher your chances of being successful on the exam.

End-of-Chapter Questions

Do not forget end-of-chapter questions, and always write down your results to track your progress. End-of-chapter questions will give you an overview of what areas are tested on the exam, so you can be more focused on these areas. Additionally, these questions will reveal the weaker areas that you must focus on to improve.

The following table summarizes how to best allocate your study time for the various CFA exam topics, if you were to give yourself about 323 hours and four months (120 days) to study. Use this table as a benchmark and customize your study routine to suit your circumstances.

 Topic Area Weight Hours based on 323-hour schedule Days to allocate
  Ethical and Professional Standards   15%–20%   54   20 days
  Quantitative Methods   8%–12%   31   12 days
  Economics   8%–12%   31   12 days
  Financial Reporting and Analysis   13%–17%   46   17 days
  Corporate Finance   8%–12%   31   11 days
  Portfolio Management   5%–8%   20   8 days
  Equity Investments   10%–12%   35   12 days
  Fixed Income   10%–12%   35   12 days
  Derivatives   5%–8%   20   8 days
  Alternative Investments   5%–8%   20   8 days
  Total   100%   323   120 days

The Last Four Weeks 

After decades of paper-based exams, the CFA exams changed to computer-based as of January 2021. Beginning in 2022, the Level I exam will be offered in February, May, August, and November, the Level II exam in February and August, and the Level III exam in May and November.

Taking these dates into account, allow yourself four weeks prior to the exam date to review questions and have practice sessions. During this period, you should practice more intensively than in previous periods. The CFA Institute will give you mock exams.

It’s recommended that you set aside at least one day to simulate exam conditions at home with the mock test. Two 2.25-hour sessions with an optional break in between are advised, to reflect the conditions of the new computer exam. The mock exam will help you to be well prepared physiologically for the exam.

It would also be worthwhile to take a two- to four-week study leave from work during the final phase of your preparation.

The Bottom Line

The key to preparing for the CFA Level I exam is to study in a structured way over a period of at least 323 hours. Hopefully, after studying in a structured way for the exam, you won’t have any issues with passing it.