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Overview of CFA® Program

Updated: Nov 22, 2021




The CFA® Institute was founded in 1947. Over the past 70+ years, The CFA® Program has established itself as the golden standard in the industry for Investment Certification. Candidates taking up the CFA® Program will get knowledge of Finance and Investment Industries, which will enhance their abilities and also increase the likelihood of getting a high-paying position in the field of Finance and Investment Management.


CFA® Institute has charter holders in over 160+ nations across the world. These charter holders work as Portfolio Managers, Equity Research Analysts, Fund Managers, Wealth Managers, Chief Financial Officers, Risk Consultants etc.


The entire CFA® course has been divided into three levels. The levels are CFA® Level 1, CFA® Level 2 and CFA® Level 3. The candidates can only move to the next level after passing the previous level exam. After clearing all the three levels, candidates can obtain their charter from the institute after fulfilling certain criteria as specified by the institute.


Brief discussion on Topics to be covered in CFA® Curriculum


In the CFA® Curriculum, there are ten topics (can also be read as subjects). Let us not be too concerned with just knowing the names of those ten subjects. Let’s connect the topics with practical life with the help of a story.


Assume you want to put your money to work i.e., you want to invest your money. The first question you must answer is where to put your money. Buying a company's equity shares, Debentures, or Gold are undoubtedly three possibilities that have crossed your thoughts. Here are the three topics in CFA® which are Equity, Fixed Income, and Alternative Investment.


The second question which may arise is allocation of funds i.e., how much of your money you will put in equity, fixed income, and alternative investments. This brings us to the function of Portfolio Management, which is also one of the topics in our CFA® Curriculum.


Following that, the next question that must be addressed is security selection i.e., deciding which firms' equity or debt to invest in, in order to generate a good return. This is determined by a variety of criteria, including how the economy will perform, what were the company's previous returns, and the strength of the company's fundamentals. To address these concerns, the CFA® Curriculum has three topics which are Economics, Quantitative Methods, and Financial Reporting

Analysis.


7 out of 10 topics have been introduced to you. Let’s look into the remaining 3 topics.


Now assume you don't want to invest your money, but rather want to protect yourself against potential losses (i.e., Hedging) or benefit from your instincts (i.e., Speculation). This will need the use of a derivative instrument, which brings us to the curriculum's next topic, Derivatives.


As you are aware, investment managers manage money for others, so being ethical is important. So, in order to encourage ethical behaviors in the investment industry, the CFA® Institute has developed a topic called Ethical and Professional Standards.


So, now you have a brief idea about nine topics. The last topic is Corporate Finance. This topic is all about procurement and deployment of funds.


Eligibility for registering for the CFA® Program?


In order to be eligible for the course, CFA® aspirants must fulfill any one of the following eligibility requirements.

  • Candidates must have completed a bachelor's degree or an equivalent program from a recognized university or institution.

  • Candidates in their final year of their Bachelor's degree program are also eligible to enroll in the CFA® course. Candidates must, however, finish their Bachelor's degree before applying for the CFA® level 2 exam.

  • Candidates must have at least four years of relevant work experience at the time of registration.

One more thing which is the utmost important for registering is that you must have a valid international passport.


What is the pattern for CFA® Level 1 Examination?


The CFA® Level I is a computer-based examination containing 180 multiple-choice questions spread across two sessions of 2-hour 15 minute each i.e., each session containing 90 MCQs. There is an optional break in between the two sessions. To get examination results, candidates must attend both sessions.


In the first session there will be 90 multiple-choice questions on Ethical and Professional Standards, Quantitative Methods, Economics, and Financial Reporting Analysis.


In the second session there will be 90 multiple-choice questions on Corporate Finance, Equities, Fixed Income, Derivatives, Alternative Investments, and Portfolio Management.


Why should you pursue the CFA® Program?


CFA® qualification is the perfect choice for those interested in a finance profession and seeking credentials that will provide an in-depth grasp of financial topics as well as global recognition. If you're debating whether or not to take CFA® examinations, consider the following advantages:

  • The Program focuses on financial modeling, portfolio management, and other investment-related topics in depth. Top financial firms, asset management firms, and hedge funds appreciate this knowledge base and favor charter holders above other applicants in comparable industries.

  • It is one of the few degrees that takes your job experience into account when giving you the charter. This is to ensure that your expertise is not only theoretical, but you also have exposure to relevant positions in equities research, investment banking, or any other similar sector. Having a CFA® credential on your CV instantly convinces companies of not just your in-depth knowledge but also your expertise in managing demanding tasks.

  • The CFA® Qualification is one of the finest choices for someone who does not have the time or money to enroll in a full-time MBA Finance program but wants to enter in the investment finance business.


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1 Comment


manya bansal
manya bansal
Sep 22, 2021

It was really helpful and the way you explained the curriculum is definitely commendable !!

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