What does the CFA teach? In short, the core toolkit of professional investment analysis: ethics, quantitative methods, economics, financial statement analysis, corporate finance, the valuation of equities, bonds and derivatives, alternative investments, and portfolio construction. Level I builds the vocabulary and the tools, Level II applies them to valuing securities, and Level III combines them to build and manage portfolios for clients.
Below, we go through the curriculum level by level and topic by topic, show the official Level I weights for 2026 and 2027, and explain which parts carry over to analysing a stock yourself. Bullish Stock Alerts is not affiliated with or endorsed by CFA Institute; CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
How the CFA curriculum is structured
The program has three exams, taken in order. The depth changes at each step: from knowing the concepts (Level I), to analysing and valuing securities (Level II), to combining everything into portfolio decisions (Level III). The traditional shorthand is “tools and inputs”, “asset valuation” and “portfolio management and wealth planning”.
The ten topic areas, with their 2027 names and the 2026 name in parentheses where it changed:
- Ethical and Professional Standards
- Quantitative Methods
- Economics
- Financial Statement Analysis
- Corporate Finance (Corporate Issuers)
- Equities (Equity Investments)
- Fixed Income
- Derivatives and Risk Management (Derivatives)
- Alternative Investments
- Portfolio Construction (Portfolio Management)
Level I: tools and concepts
Level I covers all ten topic areas at an introductory level: definitions, core formulas, how markets and instruments work, and how to read financial statements. The exam has 180 multiple-choice questions, split into two sessions of 135 minutes each.
Level II: asset valuation
Level II is where valuation takes over: you apply the Level I tools to value equities, bonds and derivatives, adjust financial statements and judge the quality of reported earnings. The exam has 22 item sets, each a vignette of case facts and data followed by four multiple-choice questions: 88 questions in two sessions of 132 minutes.
Level III: portfolio management and wealth planning
Level III moves from single securities to whole portfolios: asset allocation, portfolio construction, performance measurement, and derivatives and risk management, with ethics tested again. Candidates also choose one specialized pathway: Portfolio Management, Private Markets or Private Wealth. CFA Institute weights the pathway content at 30–35% of the exam, and the common core makes up the rest. The exam combines vignette-based item sets with constructed-response (written) questions.
CFA Level I topic weights: 2026 vs 2027
CFA Institute publishes a weight range for each topic. The 2027 Level I outline brings a notable shift: Ethics falls from 15–20% to 10–15%, Quantitative Methods rises from 6–9% to 11–14%, and four topics are renamed.
| Topic (2027 name) | 2026 weight | 2027 weight |
|---|---|---|
| Ethical and Professional Standards | 15–20% | 10–15% |
| Quantitative Methods | 6–9% | 11–14% |
| Economics | 6–9% | 6–9% |
| Financial Statement Analysis | 11–14% | 11–14% |
| Corporate Finance | 6–9% | 6–9% |
| Equities | 11–14% | 11–14% |
| Fixed Income | 11–14% | 11–14% |
| Derivatives and Risk Management | 5–8% | 6–9% |
| Alternative Investments | 7–10% | 6–9% |
| Portfolio Construction | 8–12% | 8–12% |
Source: the CFA Institute Level I exam page and its topic outlines, checked in October 2026. At Level II, each topic weighs 5–10% or 10–15%; at Level III, Asset Allocation and Portfolio Construction weigh 15–20% each. Check the outline for your own exam year, as ranges and readings change.
What does the CFA teach in each topic area?
The summaries below follow the 2026 readings; several Level I readings change for 2027.
Ethics and professional standards
Every level tests the CFA Institute Code of Ethics and the seven Standards of Professional Conduct: professionalism, integrity of capital markets, duties to clients, duties to employers, investment analysis, recommendations and actions, conflicts of interest, and responsibilities as a CFA Institute member or candidate. Questions are scenario-based: material non-public information, fair dealing with clients, independence and objectivity, or whether research has a reasonable basis.
Quantitative methods and economics
Quantitative Methods starts with the time value of money, return measures, probability, statistics, hypothesis testing and regression. Level II moves on to multiple regression, time-series analysis and an introduction to machine learning and big data projects. Economics covers market structures, business cycles, monetary and fiscal policy, trade and capital flows, exchange rates and parity conditions, and economic growth. Later levels use it to form capital market expectations for asset allocation.
Financial statement analysis and corporate finance
Financial Statement Analysis is among the most useful topics for anyone who studies companies. You learn how the income statement, balance sheet and cash flow statement fit together, how IFRS and US GAAP treat items such as inventories, leases and income taxes, how to calculate and interpret ratios, and how to recognise low-quality earnings. Level II goes further into intercorporate investments, pensions and share-based compensation, multinational operations and the analysis of financial institutions.
Corporate Finance covers governance and stakeholders, working capital, capital investment decisions using net present value (NPV) and internal rate of return (IRR), capital structure and the cost of capital. Level II adds dividend and share repurchase analysis, advanced cost of capital estimation and corporate restructuring.
Equities, fixed income, derivatives and alternatives
Equities covers market organisation, indexes, market efficiency, industry and company analysis, and valuation. At Level II, valuation becomes the heart of the topic: dividend discount models, free cash flow to the firm (FCFF) and to equity (FCFE), price and enterprise value multiples, residual income and private company valuation.
Fixed Income covers bond features, yields and spreads, the term structure, duration and convexity, credit risk and securitisation, then arbitrage-free valuation and bonds with embedded options at Level II. Derivatives moves from forwards, futures, swaps and options at Level I to binomial and Black-Scholes-Merton valuation at Level II and hedging strategies at Level III. Alternative Investments covers private capital, real estate, infrastructure, natural resources and hedge funds: structures, fees, returns and due diligence.
Portfolio construction and wealth planning
At Level I this topic introduces risk and return, diversification, the capital asset pricing model (CAPM), the investment policy statement and behavioural biases. By Level III it is the centre of the exam: capital market expectations, strategic and tactical asset allocation, liability-driven and index-based strategies, equity and fixed-income portfolio management, and performance evaluation. The chosen pathway then adds depth in portfolio management, private markets or private wealth.
Practical Skills Modules
Alongside the exams, CFA Institute requires one Practical Skills Module (PSM) per level: roughly 10 to 20 hours of videos, guided practice, case studies and multiple-choice questions. You must complete it to receive your exam result, and the same module cannot count at two levels. Options include Financial Modeling and Python programming; at Level III, the module corresponds to your pathway.
Does the CFA teach you how to invest?
Partly. The CFA Program teaches how professionals analyse securities and build portfolios for clients. It does not hand you a stock-picking system, and it is not a trading course. What it does give you are habits that transfer to your own research:
- reading and adjusting financial statements before trusting a headline number;
- estimating what a business is worth under explicit, written-down assumptions;
- understanding how risk, correlation and diversification behave inside a portfolio;
- setting objectives, constraints and a time horizon before choosing investments;
- recognising behavioural biases such as overconfidence, anchoring and loss aversion.
What it leaves to you is everything around the tools. The curriculum is written for professionals managing other people’s money, with mandates, compliance teams and benchmarks. A self-directed investor still has to choose what to study, check the data, set personal risk limits and accept uncertain outcomes. And no qualification makes a forecast right: prices can stay far from any model’s estimate for a long time.
How CFA valuation topics map to practical stock analysis
The most transferable parts are financial statement analysis, corporate finance and equity valuation. Each helps answer a practical question about a listed company:
| CFA topic | What you learn | Practical question |
|---|---|---|
| Financial Statement Analysis | Earnings quality, cash conversion, accounting choices | Are reported profits backed by cash, and comparable from year to year? |
| Corporate Finance | Cost of capital, capital allocation, payout policy | Does the company earn more than its cost of capital, and what does it do with its cash? |
| Equities: DDM, FCFF, FCFE | Present value of expected future cash flows | What is the business worth under stated assumptions? |
| Equities: multiples | P/E, EV/EBITDA and P/B relative to peers and history | Is the valuation high or low relative to comparable companies, and why? |
| Fixed Income and credit | Leverage, maturities, credit spreads | Could the balance sheet become a problem if rates or earnings change? |
| Portfolio Construction | Diversification, correlation, policy statements | How much weight should any single idea carry in a portfolio? |
Worked example: the constant-growth dividend discount model
The simplest equity valuation model in the curriculum is the Gordon growth model, a dividend discount model with a constant growth rate:
V0 = D1 / (r − g)
Here D1 is next year’s dividend, r is the required return on equity and g is a constant long-term dividend growth rate, which must be lower than r. Take a hypothetical company that has just paid a $2.00 dividend, with g = 4% and r = 9%:
- D1 = $2.00 × 1.04 = $2.08
- V0 = $2.08 / (0.09 − 0.04) = $2.08 / 0.05 = $41.60
Now change one input at a time. With r = 8% instead of 9%, the value becomes $2.08 / 0.04 = $52.00, which is 25% higher. With g = 5% instead of 4% (r back at 9%), D1 is $2.10 and the value is $2.10 / 0.04 = $52.50. One percentage point in a single assumption moves the estimate by about a quarter. The practical lesson: an intrinsic value is a range built on assumptions, not a precise target.
The same logic extends to free cash flow models. In the single-stage case, firm value equals next year’s FCFF divided by (WACC − g), and equity value is firm value minus the market value of debt. For a step-by-step treatment, see our guide to the intrinsic value of a stock, or test your own assumptions with the intrinsic value calculator.
Our research methodology explains how we combine valuation, quality, growth, risk and technical context, and the stock valuation scanner turns that framework into a score for US-listed companies, used to set research priorities, not recommendations.
FAQ: what the CFA teaches
What are the 3 levels of the CFA?
Level I tests tools and concepts across ten topic areas, Level II tests asset valuation through case vignettes, and Level III tests portfolio management and wealth planning, including one specialized pathway. The exams must be passed in order, and the charter itself also requires qualifying work experience and CFA Institute membership.
What is in the CFA Level 2 curriculum?
The same ten topic areas as Level I, studied in more depth with a valuation focus: equity models (dividend discount, free cash flow, residual income, multiples), advanced financial statement analysis, fixed income and derivatives valuation, multiple regression and machine learning, and portfolio management. Each topic carries a weight of 5–10% or 10–15%.
Does the CFA teach accounting and financial modelling?
Accounting, yes: financial statement analysis under IFRS and US GAAP is one of the most heavily weighted topics at Levels I and II. Building spreadsheet models is not tested in the exams; hands-on modelling practice comes from the Financial Modeling Practical Skills Module.
Does the CFA teach Python or trading?
Python is available as a Practical Skills Module, and Level II quantitative methods introduce machine learning concepts. Trading is not a focus: markets and execution are studied from an institutional portfolio perspective, and chart-based technical analysis is not a core topic.
Is the CFA curriculum the same every year?
No. CFA Institute updates the curriculum regularly and publishes a topic outline for each exam year. The 2027 Level I outline renames several topics and shifts weight from Ethics to Quantitative Methods, so check that your study materials match your exam year.
Educational content, not investment advice.
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