CFA Level I - Chartered Financial Analyst Cheat Sheet

The CFA (Chartered Financial Analyst) Level I exam, administered by CFA Institute, is the first of three exams in the world's most recognized investment-management credential and tests the tools, asset classes, and ethics that underpin professional investing. This sheet maps the 2027 Level I curriculum across all ten topic areas, from Quantitative Methods and Financial Statement Analysis through Fixed Income, Derivatives, and the heavily weighted Ethical and Professional Standards. Level I rewards breadth and precise recall: it is computer-based across two 135-minute sessions of multiple-choice questions, and it is graded against the answer CFA Institute deems correct, which is not always the answer that sounds most reasonable in general practice. Use each table to drill the body's exact framing of a concept, the distinction it loves to test, and the formula or decision cue you need on exam day.

What This Cheat Sheet Covers

This topic spans 102 focused tables and 1157 indexed concepts. Below is a complete table-by-table outline of this topic, spanning foundational concepts through advanced details.

Table 1: Rates of Return and Risk PremiumsTable 2: Benchmarking Returns and Index ConstructionTable 3: The Time Value of Money in FinanceTable 4: Statistical Characteristics of Asset ReturnsTable 5: Probability Distributions for Asset Prices and ReturnsTable 6: Estimation and Hypothesis TestingTable 7: Portfolio Return and Risk MathematicsTable 8: Simulation of Asset Prices and ReturnsTable 9: Simple Linear Regression in FinanceTable 10: Introduction to Financial Data ScienceTable 11: Costs, Breakeven, and Economies of ScaleTable 12: Market Structures and ConcentrationTable 13: Understanding Business CyclesTable 14: Fiscal PolicyTable 15: Monetary PolicyTable 16: Introduction to GeopoliticsTable 17: International TradeTable 18: Capital Flows and the FX MarketTable 19: Exchange Rate CalculationsTable 20: Organizational Forms and Corporate Issuer FeaturesTable 21: Investors and Other StakeholdersTable 22: Corporate Governance: Conflicts, Mechanisms, and RisksTable 23: Working Capital and LiquidityTable 24: Capital Investments and Capital AllocationTable 25: Capital StructureTable 26: Business ModelsTable 27: Financial Statement Analysis FrameworkTable 28: Income Statement: Revenue and Expense RecognitionTable 29: Earnings Per Share and Income Statement RatiosTable 30: Analyzing Balance SheetsTable 31: Analyzing Statements of Cash Flows ITable 32: Analyzing Statements of Cash Flows IITable 33: Analysis of InventoriesTable 34: Analysis of Long-Term AssetsTable 35: Topics in Long-Term Liabilities and EquityTable 36: Analysis of Income TaxesTable 37: Financial Reporting Quality: Spectrum and IncentivesTable 38: Earnings Management and Warning SignsTable 39: Ratio Analysis: Activity, Liquidity, Solvency, ProfitabilityTable 40: DuPont Analysis and ForecastingTable 41: Introduction to Financial Statement ModelingTable 42: Equity Instrument FeaturesTable 43: Equity Jurisdictions, Classes, and VotingTable 44: Equity Issuance and TradingTable 45: Sources of Equity ReturnsTable 46: Introduction to Equity ValuationTable 47: Discounted Cash Flow (DCF) and Growth ModelsTable 48: Relative Value Equity Valuation ApproachesTable 49: Financial Statement Forecasting in Equity ValuationTable 50: Industry and Competitive AnalysisTable 51: Company Analysis: Past, Present, and FutureTable 52: Equity Analyst Research ReportsTable 53: CAPM, Market Model, and Factor-Based Equity ModelsTable 54: Fixed-Income Instrument FeaturesTable 55: Fixed-Income Cash Flows and TypesTable 56: Fixed-Income Issuance and TradingTable 57: Fixed-Income Markets for Corporate IssuersTable 58: Fixed-Income Markets for Government IssuersTable 59: Bond Valuation: Prices and YieldsTable 60: Yield and Yield Spread Measures for Fixed-Rate BondsTable 61: Yield Measures for Floating-Rate and Money Market InstrumentsTable 62: Term Structure: Spot, Par, and Forward CurvesTable 63: Interest Rate Risk and ReturnTable 64: Yield-Based Bond Duration Measures and PropertiesTable 65: Yield-Based Bond Convexity and Portfolio PropertiesTable 66: Curve-Based and Empirical Fixed-Income Risk MeasuresTable 67: Credit RiskTable 68: Credit Analysis for Government and Corporate IssuersTable 69: Fixed-Income SecuritizationTable 70: Asset-Backed Security (ABS) FeaturesTable 71: Mortgage-Backed Security (MBS) FeaturesTable 72: Derivative Instrument and Market FeaturesTable 73: Forward Commitments and Contingent ClaimsTable 74: Derivative Benefits, Risks, and UsesTable 75: Arbitrage, Replication, and Cost of CarryTable 76: Pricing and Valuation of Forwards and FuturesTable 77: Pricing and Valuation of SwapsTable 78: Pricing and Valuation of OptionsTable 79: Put-Call Parity and the One-Period Binomial ModelTable 80: Alternative Investment Features, Methods, and StructuresTable 81: Alternative Investment Performance and ReturnsTable 82: Investments in Private Capital: Equity and DebtTable 83: Real Estate and InfrastructureTable 84: Natural ResourcesTable 85: Hedge FundsTable 86: Introduction to Digital AssetsTable 87: Portfolio Risk and Return: Part ITable 88: Portfolio Risk and Return: Part IITable 89: Portfolio Management: An OverviewTable 90: Basics of Portfolio Planning and ConstructionTable 91: The Behavioral Biases of IndividualsTable 92: Introduction to Risk ManagementTable 93: Ethics and Trust in the Investment ProfessionTable 94: Code of Ethics and Standards of Professional Conduct (Overview)Table 95: Standard I: ProfessionalismTable 96: Standard II: Integrity of Capital MarketsTable 97: Standard III: Duties to ClientsTable 98: Standard IV: Duties to EmployersTable 99: Standard V: Investment Analysis, Recommendations, and ActionsTable 100: Standard VI: Conflicts of InterestTable 101: Standard VII: Responsibilities as a CFA Institute Member or CFA CandidateTable 102: Application of the Code and Standards: Level I

Table 1: Rates of Return and Risk Premiums

The CFA Level I Quantitative Methods reading "Rates and Returns" covers how interest rates function as required rates of return, discount rates, and opportunity costs, and how an interest rate decomposes into a real risk-free rate plus compensating risk premiums. Candidates must also calculate and compare the key return measures used across asset classes and time horizons: holding-period return, arithmetic and geometric means, gross/net, pre-tax/after-tax, nominal/real, and leveraged returns.

Term	Example	Description
Holding Period Return (HPR)	$HPR = \\frac{P_1 - P_0 + CF}{P_0}$ ; e.g. buy at 34.50, sell at 30.50, receive dividend 0.515 per share: $HPR = \\frac{30.50 - 34.50 + 0.515}{34.50} \\approx -10.1\\%$	The total return earned over a single investment period, capturing both price change and cash flows. Not annualized; does not assume reinvestment.
Arithmetic Mean Return	Years: +20%, -10%, +15%; AM $= \\frac{0.20 + (-0.10) + 0.15}{3} = 8.33\\%$	Simple average of periodic returns. Best for forward-looking single-period estimates; overstates long-run growth when returns vary. Always $\\geq$ geometric mean.
Geometric Mean Return	GM $= (1.20 \\times 0.90 \\times 1.15)^{1/3} - 1 \\approx 7.46\\%$ ; always $\\leq$ arithmetic mean	Compound average return; the correct measure for multi-period realized performance (CAGR). Captures the effect of compounding; the gap vs. arithmetic mean widens with volatility.
Required Rate of Return	10-yr bond required return: 1.5% (real RFR) + 2.5% (inflation) + 1.2% (risk premia) = 5.2%	The minimum return an investor demands for bearing a given risk, interpreted as a discount rate or opportunity cost. • Not the same as expected or realized return. • Component sum: real risk-free rate + inflation premium + risk premium(s).
Real Risk-Free Rate	If short-term T-bill nominal yield = 3.5% and expected inflation = 2.0%: approximate real RFR $\\approx 1.5\\%$	The theoretical return on a risk-free asset with zero inflation. Compensation for deferring consumption, not for bearing risk or inflation. Approximated as nominal risk-free rate minus expected inflation.

CFA Level I - Chartered Financial Analyst Cheat Sheet

Table 1: Rates of Return and Risk Premiums

Term	Example	Description
Holding Period Return (HPR)	$HPR = \\frac{P_1 - P_0 + CF}{P_0}$ ; e.g. buy at 34.50, sell at 30.50, receive dividend 0.515 per share: $HPR = \\frac{30.50 - 34.50 + 0.515}{34.50} \\approx -10.1\\%$	The total return earned over a single investment period, capturing both price change and cash flows. Not annualized; does not assume reinvestment.
Arithmetic Mean Return	Years: +20%, -10%, +15%; AM $= \\frac{0.20 + (-0.10) + 0.15}{3} = 8.33\\%$	Simple average of periodic returns. Best for forward-looking single-period estimates; overstates long-run growth when returns vary. Always $\\geq$ geometric mean.
Geometric Mean Return	GM $= (1.20 \\times 0.90 \\times 1.15)^{1/3} - 1 \\approx 7.46\\%$ ; always $\\leq$ arithmetic mean	Compound average return; the correct measure for multi-period realized performance (CAGR). Captures the effect of compounding; the gap vs. arithmetic mean widens with volatility.
Required Rate of Return	10-yr bond required return: 1.5% (real RFR) + 2.5% (inflation) + 1.2% (risk premia) = 5.2%	The minimum return an investor demands for bearing a given risk, interpreted as a discount rate or opportunity cost. • Not the same as expected or realized return. • Component sum: real risk-free rate + inflation premium + risk premium(s).
Real Risk-Free Rate	If short-term T-bill nominal yield = 3.5% and expected inflation = 2.0%: approximate real RFR $\\approx 1.5\\%$	The theoretical return on a risk-free asset with zero inflation. Compensation for deferring consumption, not for bearing risk or inflation. Approximated as nominal risk-free rate minus expected inflation.