Introduction
The Chartered Financial Analyst (CFA®) Program is one of the most respected qualifications in global finance. But what does the CFA actually teach?
Behind the three notoriously demanding exams lies a structured curriculum designed to build, level by level, everything a professional investment analyst or portfolio manager needs:
from fundamental tools and valuation techniques to advanced portfolio management and wealth planning. CFA Institute+1
In this guide, we break down what the CFA teaches across all three levels, topic by topic, so you can clearly see how your knowledge compounds as you progress.
Overview: How the CFA Curriculum Is Structured
The CFA Program is built around three exam levels and a consistent body of knowledge spanning 10 core topic areas: CFA Institute+2edzeb.com+2
- Ethical and Professional Standards
- Quantitative Methods
- Economics
- Financial Reporting and Analysis (Financial Statement Analysis)
- Corporate Finance / Corporate Issuers
- Equity Investments
- Fixed Income
- Derivatives
- Alternative Investments
- Portfolio Management and Wealth Planning
Each level has a different focus:
- Level I – “Tools and Inputs”
Broad coverage of all topics, focusing on definitions, concepts, and basic applications. - Level II – “Asset Valuation”
Applies those tools to value securities and assets, using more complex cases and data. - Level III – “Portfolio Management & Wealth Planning”
Integrates everything into real-world portfolio construction, asset allocation, and client mandates. CFA Institute+2Wikipédia+2
Let’s walk through what you actually learn.
1. Ethics and Professional Standards
Core question: How should an investment professional behave?
Ethics is heavily emphasized at all three levels. You study the CFA Institute Code of Ethics and Standards of Professional Conduct, including: Wikipédia+1
- Duties to clients and employers
- Integrity of capital markets (insider trading, market manipulation)
- Conflicts of interest and disclosure
- Professionalism, diligence, and reasonable basis for recommendations
- Responsibilities as a CFA member or candidate
At higher levels, Ethics is applied to complex, realistic scenarios, such as global portfolios, research conflicts, or institutional mandates.
What you gain:
A structured ethical framework for decisions in research, trading, portfolio management, and client communication.
2. Quantitative Methods
Core question: How do we measure risk, return, and relationships in financial data?
Quantitative methods start simply and become more involved as you progress. Topics include: Wikipédia+1
- Time value of money (TVM): discounting, compounding, NPV, IRR
- Statistics and probability: distributions, expected values, variance, covariance
- Hypothesis testing & confidence intervals
- Correlation and regression analysis
- Time-series analysis (Level II/III)
- Portfolio-related calculations: risk–return, Sharpe ratios, diversification effects
- Recent additions: machine learning & big data overview (conceptual)
By Level III, you’re using quant tools to support asset allocation, risk modeling, and performance analysis.
3. Economics
Core question: How do economic forces drive markets and asset prices?
CFA Economics spans both micro and macro, plus international finance: Wikipédia+1
- Microeconomics: demand & supply, market structures, pricing power
- Macroeconomics: GDP, inflation, unemployment, business cycles
- Monetary and fiscal policy, central banks, interest rate channels
- International trade and capital flows
- Exchange rates, purchasing power parity (PPP), interest rate parity
- Economic growth theories and long-term drivers
At Level II and III, the focus shifts to using economics for capital market expectations and strategic asset allocation.
4. Financial Reporting and Analysis (FRA)
Core question: What do financial statements really tell you—and what are they hiding?
FRA (also called Financial Statement Analysis) is a major component at Levels I and II: CFA Institute+2CFA Institute+2
You study:
- Structure of the income statement, balance sheet, and cash flow statement
- IFRS vs US GAAP key differences
- Revenue recognition, inventory methods, depreciation, leases, pensions
- Financial ratios: profitability, liquidity, solvency, efficiency
- Earnings quality and red flags
- Adjusting reported numbers to arrive at “economic reality”
By Level II, you perform deeper valuation-oriented adjustments and build robust forecasts on top of accounting data.
5. Corporate Finance / Corporate Issuers
Core question: How do companies make financing and investment decisions?
Under Corporate Finance (now “Corporate Issuers” in the CFA curriculum), you learn: CFA Institute+2CFA Institute+2
- Capital budgeting: NPV, IRR, payback, project evaluation under risk
- Capital structure: debt vs equity, cost of capital, WACC
- Dividend policy, share repurchases, payout theories
- Corporate governance and stakeholder management
- Mergers & acquisitions basics, restructuring, corporate events
These topics support equity and credit analysis, as well as valuation and credit risk work in later levels.
6. Equity Investments
Core question: How do we value stocks and equity portfolios?
Equity is central at all levels and increasingly valuation-focused: CFA Institute+2AnalystPrep+2
- Market structure and types of orders
- Index construction and benchmarking
- Industry and company analysis (top-down vs bottom-up)
- Valuation models:
- Dividend discount models (DDM)
- Free cash flow models (FCFF, FCFE)
- Relative valuation (P/E, P/B, EV/EBITDA, etc.)
- Growth, profitability, competitive advantage (moats)
At Level II, you dive deeply into valuation in specific situations: cyclical businesses, financials, emerging markets, etc. At Level III, equity becomes part of holistic portfolio construction.
7. Fixed Income
Core question: How do bonds work, and how do we price and manage them?
The fixed income sections cover: CFA Institute+2CFA Institute+2
- Bond features: coupons, maturities, embedded options, seniority
- Yield measures, spot and forward rates
- Term structure and yield curve theories
- Duration, convexity, and interest rate risk
- Credit risk and credit spreads
- Structured products: MBS, ABS, CDOs (more detail at Level II)
At Level III, fixed income is integrated into portfolio strategies, liability-driven investing, and risk management.
8. Derivatives
Core question: How can we use derivatives to manage risk and express views?
You learn the framework of derivatives markets and valuation: CFA Institute+2CFA Institute+2
- Futures and forwards: pricing via cost of carry, hedging
- Swaps: interest rate swaps, currency swaps, total return swaps
- Options: payoffs, Greeks (conceptually), option strategies
- Basic pricing models: binomial trees, Black-Scholes (at a conceptual level)
- Using derivatives to hedge equity, fixed income, and FX exposures
By Level III, derivatives are used in portfolio insurance, risk budgeting, and structured solutions rather than as isolated instruments.
9. Alternative Investments
Core question: What lies beyond traditional stocks and bonds?
Alternative investments include: CFA Institute+2edzeb.com+2
- Hedge funds and strategies (long/short, global macro, event-driven, etc.)
- Private equity and venture capital
- Real estate (direct, REITs, valuation approaches)
- Commodities and natural resources
- Infrastructure and other real assets
You study return drivers, risks, fee structures, and due diligence, and at advanced levels you see how alternatives fit into diversified portfolios and institutional mandates.
10. Portfolio Management and Wealth Planning
Core question: How do we put it all together for real clients with real constraints?
This topic area gains importance with each level and is the core of Level III: CFA Institute+2CFA Institute+2
- Modern portfolio theory: efficient frontier, CAPM, factor models
- Risk–return trade-offs and diversification
- Formulating an investment policy statement (IPS) for individuals and institutions
- Strategic vs tactical asset allocation
- Rebalancing, risk budgeting, and overlay strategies
- Performance measurement and attribution
- Behavioral finance in investment decisions
- Private wealth vs institutional portfolio management
- At Level III: specialized pathways (e.g., Portfolio Management, Private Wealth, Private Markets) and advanced asset allocation, liability-driven investing, and multi-asset strategies. CFA Institute+1
This is where you learn to integrate equity, fixed income, derivatives, and alternatives into coherent solutions for clients.
What Each CFA Level Really Teaches
To summarize it in one table:
| CFA Level | Main Focus | What You Learn to Do |
|---|---|---|
| Level I | Tools & Fundamentals | Understand and describe core concepts, formulas, instruments, and markets across all 10 topics. |
| Level II | Asset Valuation | Apply tools to analyze and value securities using more complex data, cases, and financial statements. |
| Level III | Portfolio Management & Wealth Planning | Integrate everything into real client portfolios, asset allocation, risk management, and wealth planning. |
This progression is reflected directly in the official curriculum description: Level I emphasizes tools and inputs; Level II emphasizes asset valuation; Level III emphasizes portfolio management. CFA Institute+2Wikipédia+2
Newer Additions: Practical Skills Modules (PSM)
Recently, the CFA Institute introduced Practical Skills Modules (PSM) at each level, which include: CFA Institute
- Videos
- Guided practice
- Case studies
- Applied tasks (e.g., financial modeling, data analysis, portfolio construction exercises)
You must complete at least one PSM per level to receive your exam result, adding a more hands-on component to the traditionally theory-heavy curriculum.
What Kind of Professional Does the CFA Program Shape?
By the time you complete all three levels, the CFA curriculum has taught you to:
- Read and adjust financial statements like an analyst
- Value companies, bonds, and derivatives using multiple approaches
- Understand and interpret global macroeconomic trends
- Construct and manage multi-asset portfolios for individuals or institutions
- Use derivatives and alternatives to enhance returns or control risk
- Operate with a strong ethical and professional framework
This mix of ethics, theory, and practical investment skills is why the CFA is widely recognized across asset management, private banking, research, corporate finance, and even parts of the fintech/quant world.
FAQ: What the CFA Teaches
1. Does the CFA teach “quant” finance?
It covers statistics, regression, time-series, risk/return, and a conceptual introduction to pricing models and even machine learning, but it does not go into deep stochastic calculus or high-end quantitative modeling. For pure quant roles, you typically complement CFA with a quantitative master’s or specialized training. Wikipédia
2. Does the CFA teach real-world portfolio management?
Yes. Especially at Level III, the focus is on client objectives, asset allocation, portfolio construction, and performance evaluation, supported by Practical Skills Modules.
3. Is CFA only about stocks?
No. The CFA curriculum is explicitly multi-asset: you learn about equities, fixed income, derivatives, alternatives, FX, and portfolio theory.
4. Is Ethics really that important?
Yes. Ethics is tested at all three levels and is a major factor in passing. The principle is clear: technical skill without integrity is dangerous in finance.
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