CFA Level I format and questions

Format at a glance

The Level I assessment is built around recognition and application of the concepts, terms, and formulas in the curriculum. It does not use vignette sets in which one case feeds several questions. Each stem supports one item, so you can answer it without carrying information forward from another question.

That sounds simpler than it feels under a clock. A short item can still require you to identify the relevant convention, set up a calculation, and distinguish a close distractor. The format rewards reading the entire stem before reaching for a memorized formula.

How the two sessions work

CFA Level I is divided into two 135-minute sessions, each containing 90 questions. The average pacing allowance is approximately 90 seconds per question. That is an average, not an instruction to stop every item at exactly 90 seconds. A quick definition question can take less; a calculation may take more.

The topic groups are split between the sessions. In the 2026 curriculum, Session 1 covers Ethical and Professional Standards, Quantitative Methods, Economics, Financial Statement Analysis, and Corporate Issuers. Session 2 covers Equity Investments, Fixed Income, Derivatives, Alternative Investments, and Portfolio Management. The specific weights and topic names change across curriculum editions, so make sure your notes match your exam year.

Treat the session boundary as a reset. Before the exam, practice sustained concentration through a complete session rather than only doing short sets. During a session, avoid spending several minutes chasing a difficult calculation while easier questions remain unanswered. Your first pass should collect the points you can earn efficiently.

What a multiple-choice item looks like

Each item contains a stem and three answer choices. The stem may be a direct question, a sentence to complete, a short statement, or a table. CFA Institute uses qualifiers such as “most likely,” “least likely,” “best described,” and “most appropriate.” These words define the task. If you overlook one, a true statement can still be the wrong answer.

The item-writing conventions are designed to make one choice best answer the stated question. You should not expect options such as “all of the above” or combinations such as “A and C only.” When choices are numbers, they are generally arranged from smallest to largest. When they are phrases, they are generally ordered from shortest to longest. Do not infer correctness from where an option appears.

A useful first step is to restate the task in your own words. Is the stem asking for a value, a direction of change, an accounting treatment, a definition, or the most appropriate action? That short pause helps prevent answering the topic you recognize instead of the question on screen.

A calculation example

An investor deposits $1,000 today in an account earning 5% annually. What is the balance after two years, assuming annual compounding? A. $1,050.00; B. $1,100.00; C. $1,102.50.

The answer is C. Compound the amount for two periods: $1,000 × 1.05² = $1,102.50. Choice A applies one year of growth. Choice B applies simple interest for two years and misses the return earned on the first year’s interest. The calculation is elementary; the exam skill is matching the number of periods and compounding rule to the wording.

On a real item, put the units beside the inputs before using your calculator: dollars, annual rate, and years. Check that the result moves in a sensible direction. If the account earns a positive rate over a positive period, the ending balance should exceed the deposit.

How to pace a session

Use a two-pass approach. On the first pass, answer the items you can solve cleanly. If you do not see a path after reading carefully, make a provisional choice and flag the item if the interface permits. Return later if time remains. Since incorrect answers are not penalized, an unanswered item has no strategic advantage over a considered guess.

For calculations, identify the requested quantity before entering values. Write the relationship, check sign and units, then use the calculator. When an answer is far from all choices, check the period setting, percent conversion, and whether you used simple or compound interest. Do not repeatedly recalculate without identifying which assumption you are testing.

For conceptual items, compare the choices against the exact qualifier. “Most likely” asks for the strongest supported choice, not a statement that is always true. “Least likely” reverses the direction of selection. A quiet habit that helps: mark the qualifier mentally before reading the options.

What the score means

All questions are equally weighted, and CFA Institute does not deduct points for wrong answers. The pass decision is based on a Minimum Passing Score, not a fixed raw percentage published in advance. Because the exam can include trial questions that are not scored, and candidates cannot identify those reliably, answer every item as if it counts.

After results are released, candidates receive a pass or fail outcome, topic-level feedback, and an overall scale score compared with the MPS. The score report is not a transcript of each response. It can help identify areas for further work, but it does not reveal secure exam content.

Practice the interface and the thinking

CFA Institute provides official sample questions and practice through its Learning Ecosystem. Use those resources to learn the style and interface. Supplement them with original questions that test the same learning outcomes, not copied secure items. A useful question bank explains why the right choice works and what misconception makes each distractor tempting.

Build sets that mix topics once you understand the basics. Topic-by-topic practice tells you whether you can solve a familiar type; mixed practice tests whether you can identify which method applies. After a set, record errors under a small number of causes: missing concept, misread qualifier, calculation setup, or time management. Your next session should target the cause.

Use the calculator model you intend to take into the exam. Practice clearing prior entries and checking the settings that affect time value of money. A calculator can return a precise number from the wrong input, so it cannot replace a clear setup.

Three original questions, fully worked

A bond price direction question

A fixed-rate bond’s required yield rises while its promised cash flows and maturity remain unchanged. Which result is most likely? A. The bond’s price rises. B. The bond’s price falls. C. The bond’s coupon rate falls.

Answer: B. A bond’s price is the present value of its promised cash flows. A higher required yield discounts those cash flows at a higher rate, reducing their present value. Choice A reverses the price-yield relationship. Choice C confuses the coupon rate with the required yield: the coupon rate determines the contract’s coupon payment and does not change merely because market yields move. The phrase “promised cash flows and maturity remain unchanged” removes reasons that might otherwise affect value.

A probability question

An analyst assigns a 60% probability to a return of 10% and a 40% probability to a return of negative 5%. What is the expected return? A. 1.0%. B. 4.0%. C. 7.5%.

Answer: B. The expected return is the probability-weighted average: (0.60 × 10%) + (0.40 × −5%) = 6% − 2% = 4%. Choice A may come from subtracting probabilities or averaging returns without weights. Choice C is the simple average of 10% and negative 5%, which incorrectly treats outcomes as equally likely. Keep probability and return as separate inputs before multiplying them.

An ethics application question

An analyst receives material information from an issuer during a private meeting. The information has not been made public. A colleague asks the analyst to trade the issuer’s shares before the next research note. What is the most appropriate response? A. Trade only a small amount. B. Do not trade or pass the information along. C. Trade after the meeting because the analyst did not request the information.

Answer: B. The issue is whether the information is material and nonpublic, not whether the analyst sought it or how large the trade would be. A small trade is still a trade. Choice C does not remove the duty created by receiving the information. The analyst should protect the information and follow firm controls for restricted or watch lists and escalation. This is an original teaching example, not an official exam item.

What distractors are testing

A distractor is often plausible because it reflects a recognizable mistake. In a calculation, it may use the right numbers with the wrong timing convention. In a bond question, it may swap coupon and yield. In an ethics scenario, it may focus on intention when the standard turns on conduct and information. After answering, name the mistake represented by each alternative. If you cannot explain why the wrong choices are wrong, the correct answer may have been a lucky guess.

Watch for a change in the question’s qualifier. “Most likely” asks for the best-supported outcome, while “least likely” reverses the selection. Neither means the selected statement must be universally true. A condition such as holding other factors constant, assuming annual compounding, or using information available at a stated date narrows the task. Carry that condition into your reasoning.

Numbers in distractors often reveal setup errors. A choice equal to one period’s return may signal that a candidate missed another period. A simple average may ignore unequal probabilities. A bond price that moves in the same direction as yield may reveal a reversed relationship. Use these patterns to diagnose an error, not as a shortcut that replaces solving.

Pacing with a concrete example

Suppose you reach a time-consuming fixed-income calculation after several short concept questions. If the formula is clear but the arithmetic is slow, set up the calculation, check the units, and select the closest supported choice. If the method itself is unclear, another minute staring at the same figures is unlikely to create one. Make the best available selection, flag the item, and return after your first pass.

The average allowance of about 90 seconds protects the full session; it is not a stopwatch for each item. A 20-second definition question leaves time for a multistep calculation. A few slow items can quietly consume the time intended for the rest. Practice with mixed sets so your pace reflects the variation in item length.

Review accuracy and efficiency separately. If you got the calculation right but took too long because you entered it twice, practice the setup. If it was fast but wrong, revisit the concept. Speed without accuracy is not readiness; accuracy that cannot be sustained across a session is not enough either.

Calculator errors that change the answer

Time-value-of-money problems can go wrong because payments are set at the beginning rather than end of periods, the number of payments is entered incorrectly, or a stored value remains from the previous problem. Clear or verify relevant registers before starting. Label each input: number of periods, periodic rate, present value, payment, and future value.

Rate frequency matters. If a nominal annual rate is compounded monthly, the periodic rate and number of periods must both use months. If cash flows are annual, entering a monthly rate with annual periods gives a precise but conceptually wrong result. On a bond problem, check whether coupon frequency and yield convention match the stated assumptions.

Sign convention matters in cash-flow functions. An investment purchase and its later proceeds have opposite signs from the investor’s perspective. If a calculator rejects the inputs or returns an unexpected result, check signs before changing the formula. Also distinguish nominal from effective annual rates; the effective rate incorporates compounding.

Use a direction check: should the answer be above or below the starting value, should a higher discount rate raise or lower present value, and should a weighted average lie between the possible outcomes? These checks cannot prove an answer is correct, but a result that violates them deserves a second look.

A format-specific practice routine

For each practice block, first complete a timed set without notes. Then review every item, including correct answers, and explain the stem’s task and why each distractor fails. Finally, classify misses: missing knowledge, misread qualifier, wrong model, calculator setup, arithmetic, or pacing. This turns a score into a revision plan.

Once topic-level work is steady, mix questions from different areas. A mixed set does not use a section heading to identify the formula or standard. That is closer to the decision candidates face on the stand-alone exam: identify the problem, choose a method, and execute it.

Keep questions for later review rather than repeating the same bank immediately. Repetition can make an answer feel familiar before the concept is secure. When you return after a gap, change the figures or explain the method aloud. Recognize the structure; do not memorize a letter choice.

A short test-day checklist

• Confirm the appointment location and time in your candidate account.
• Bring a valid international travel passport that satisfies the current identification policy.
• Use an approved calculator model and know its relevant functions.
• Answer every question, even when you must make an educated guess.
• Keep your pace flexible and reserve time to review flagged items.

The exam format is predictable; the content is broad. Candidates often spend too long on a hard calculation and then rush questions they could have answered confidently. Protecting your time is part of the format skill.