How to Study Fixed Income CFA Level 1 in One Month

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We can say that in Finance, fixed income is a central topic and when you advance to the CFA Level 3, it will be a more important topic. And now, you may be learning CFA Level 1 especially about fixed income and you want to learn it in 1 month. Of course, you need some tips and tricks for learning it in one month.

Cheat Sheet of CFA Level 1 Fixed Income

If you access 300Hours site, you will be able to read about CFA Level 1 Fixed Income cheat sheet. You are able to use it as your additional resources to learn about Fixed Income level 1. On that cheat sheet, you are able to read about:

  • CFA Level 1 Fixed Income: An Overview
  • Reading 39: Fixed Income Securities: Defining Elements
  • Reading 40: Fixed Income Markets: Issuance, Trading & Funding
  • Reading 41: Introduction to Fixed Income Valuation
  • Reading 42: Introduction to Asset Backed Securities
  • Reading 43: Understanding Fixed Income Risk and Return
  • Reading 44: Fundamentals of Credit Analysis

As described on the 300Hours site, in the Fixed Income CFA Level 1 topic, it constitutes one of the largest segments of the broader capital market and it covers any investments where investors are loaning the money for a fixed, scheduled repayment so that it is called ‘fixed income’. In level 1, this topic becomes the third largest topic after FRA and Ethics. Having a solid foundation on this topic in level 1 is important because the topic weight will increase throughout the 3 levels.

According to the 300Hours site, here is the summary of CFA Level 1 Fixed Income’s chapter reading.

  • Reading Number: 39
    Sub-topic: Fixed Income Securities: Defining Elements
    Description: You have to understand what a fixed income security is and what its basic structure is like.
  • Reading Number: 40
    Sub-topic: Fixed Income Markets: Issuance, Trading & Funding
    Description: You have to understand the structure and norms of the fixed income market.
  • Reading Number: 41
    Sub-topic: Introduction to Fixed Income Valuation
    Description: This topic highlights the nuances of valuing and pricing fixed income securities. It is the most important chapter.
  • Reading Number: 42
    Sub-topic: Introduction to Asset Backed Securities
    Description: You will dive into the detail of asset-backed securities and sub-products, such as residential and commercial mortgage-backed securities.
  • Reading Number: 43
    Sub-topic: Understanding Fixed Income Risk and Return
    Description: It outlines the types of risks related to typical fixed income securities. This topic focuses on a lot of testable concepts.
  • Reading Number: 44
    Sub-topic: Fundamentals of Credit Analysis
    Description: This topic focuses on credit risk, a type of risk especially relevant to fixed income.

Some Tips to Learn CFA Level 1 Fixed Income

To learn the material about CFA Level 1 Fixed Income above, you need some tips so that you are able to finish learning it in only one month. Here are some tips about learning CFA Level 1 Fixed Income according to the 300Hours site.

  • You have to cover the Fixed Income topic early in your studies.
    It is recommended for you to learn this topic early in your CFA studies. However, you have to firstly familiarize yourself with the concepts of Time Value of Money and the Discounted Cash flow approach.
  • You have to know what study materials that you have to use.
    If you want to know what study materials that you have to use, the answer depends on where you stand now. If you have a background in Fixed Income, it will be like a fish taking to water. However, if you are new to finance, you will find that certain concepts are strange for you. So, it is better for you to use prep provider notes. If then you find that some of the concepts are difficult to get, you are able to move up a notch and consult the CFA Institute curriculum. Frank J Fabozzi’s Handbook of Fixed Income Securities can be a good book to read if you need more reading material for this topic.
  • You have to master your calculator for this topic.
    Fixed Income Investment is a topic where you will always need a calculator. Besides, CFA exam calculations are not your regular multiplications and divisions that you are able to use with a paper and a pen. So, it is important for you to know the functions of every button in your calculator and also you have to know the operations of it. You are able to practice regularly with practice exams and given examples.
  • You need to practice often.
    Are you new to Finance and Fixed Income? If so, you have to make sure that you go through enough numerical problems before you take the actual exam from study notes. After that, you have to try again and again the questions that you find in the CFA Institute’s curriculum. Don’t forget to try your practice exam as well to make sure you have solid preparation for your CFA exam.

Preparing for CFA Exams Level 1

CFA Test Series site also shares the tips to prepare for CFA exams level 1 in one month that you are able to adapt and some of the tips can be read below.

There is a three-phase learning approach namely the Kaplan Way including Prepare, Practice and Perform. Cited from CFA Test Series site, CFA training for all three levels involves a significant dedication to a standardized study schedule and according to the CFA Institute, the average annual pass rate for the CFA level I exam for the last ten years is 41% where it shows that the exam is likely to be passed by only committed candidates. Your time is your most significant CFA investment so that you have to use it effectively. On average, successful candidates say that they have spent a total of about 300 hours studying for the CFA test and if you have a weak background in the subject, you need more time.

In the CFA level 1 exam, there are 10 subjects, 19 study sessions and 57 readings so that you are able to allocate study time depending on each subject’s weight. You are able to leave for readings for at least four months and leave for revision and practice in the last month. On weekends and non-working days can be a good time to prepare for the CFA.

You have to motivate yourself to review questions and practice sessions four weeks before the date of the exam and it will help if you practice more intensively during this time than in previous times.

Well, if you want to know more tips to learn CFA Level 1 Exam from the CFA Test Series site, you are able to access the site directly.

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