Study guide
2.1 Ethics Weight, Code, and Standards Map
CFA Level I Study Guide Exam
Track your progress as you read
Finished sections get a check mark.
1 Chapter 1: Orientation, Official Sources, and Exam Strategy
1.1 What Level I Tests and Why It Matters 1.2 Official Source Control and 2026 Curriculum 1.3 Eligibility, Registration, Passport, and PSM 1.4 Exam Format, Fees, Windows, and Results 1.5 Topic Weights and Session Map 1.6 Three-Hundred-Hour Study Plan
2 Chapter 2: Ethical and Professional Standards
2.1 Ethics Weight, Code, and Standards Map 2.2 Professionalism and Integrity of Capital Markets 2.3 Duties to Clients and Employers 2.4 Investment Analysis, Recommendations, and Conflicts 2.5 Responsibilities as a CFA Candidate and Member 2.6 GIPS, Performance Presentation, and Ethics Case Lab
3 Chapter 3: Quantitative Methods
3.1 Rates, Returns, and Time Value of Money 3.2 Statistics, Distributions, and Risk Measures 3.3 Probability, Conditional Expectations, and Bayes 3.4 Portfolio Mathematics and Safety-First 3.5 Sampling, Estimation, and Hypothesis Testing 3.6 Regression, Simulation, and Big Data
4 Chapter 4: Economics
4.1 Firm Market Structures and Breakeven Analysis 4.2 Business Cycles and Economic Indicators 4.3 Fiscal Policy, Monetary Policy, and Central Banks 4.4 Geopolitics, Globalization, and Trade 4.5 Foreign Exchange, Capital Flows, and Arbitrage 4.6 Economics Case Lab
5 Chapter 5: Financial Statement Analysis
5.1 FSA Framework and Information Quality 5.2 Income Statements, Revenue, Expense, and EPS 5.3 Balance Sheets, Assets, Liabilities, and Equity 5.4 Cash Flow Statements and Free Cash Flow 5.5 Inventories, Long-Lived Assets, and Taxes 5.6 Reporting Quality, Ratios, DuPont, and Modeling
6 Chapter 6: Corporate Issuers
6.1 Organizational Forms and Corporate Features 6.2 Stakeholders, ESG, and Governance Conflicts 6.3 Working Capital, Liquidity, and Cash Conversion 6.4 Capital Budgeting, NPV, IRR, and Real Options 6.5 Capital Structure, WACC, and Modigliani-Miller 6.6 Business Models and Corporate Case Lab
7 Chapter 7: Equity Investments
7.1 Market Organization, Orders, and Trading 7.2 Security Market Indexes and Efficiency 7.3 Equity Securities and Industry Analysis 7.4 Company Analysis and Competitive Position 7.5 Dividend Discount Models and Valuation Inputs 7.6 Multiples, Private Company Valuation, and Equity Case Lab
8 Chapter 8: Fixed Income
8.1 Bond Features, Issuance, and Cash Flow Structures 8.2 Yield Measures, Spot Rates, and Forward Rates 8.3 Bond Valuation, Clean Price, and Accrued Interest 8.4 Duration, Convexity, and Interest Rate Risk 8.5 Credit Risk, Ratings, and Spreads 8.6 Securitization and Fixed Income Case Lab
9 Chapter 9: Derivatives
9.1 Derivative Markets, Forward Commitments, and Claims 9.2 Forwards, Futures, and Swap Basics 9.3 Option Payoffs, Moneyness, and Risk 9.4 Arbitrage, Pricing, and No-Arbitrage Intuition 9.5 Hedging, Speculation, and Risk Management 9.6 Derivatives Case Lab
10 Chapter 10: Alternative Investments
10.1 Alternatives Role, Characteristics, and Structures 10.2 Hedge Funds, Strategies, Fees, and Risks 10.3 Private Capital, Venture, Buyout, and Private Credit 10.4 Real Estate, Infrastructure, and Commodities 10.5 Liquidity, Due Diligence, and Performance Measurement 10.6 Alternatives Case Lab
11 Chapter 11: Portfolio Management
11.1 Portfolio Return, Risk, and Diversification 11.2 Portfolio Planning, Policy, and Construction 11.3 Risk Management and Investor Objectives 11.4 Behavioral Finance and Client Decision Errors 11.5 Fintech, Data, and Portfolio Applications 11.6 Portfolio Case Lab
12 Chapter 12: Integrated CFA Level I Review
12.1 Session One Integration: Ethics, Quant, Economics, FSA, and Corporate 12.2 Session Two Integration: Equity, Fixed Income, Derivatives, Alternatives, and PM 12.3 Formula Sheet and Calculator Workflow 12.4 Question Stem Reading and Answer Elimination 12.5 Mock Exam Review and Error Log 12.6 Mixed-Topic Case Lab
13 Chapter 13: Final Countdown, Results, and Next Steps
13.1 Ninety-Day, Sixty-Day, and Thirty-Day Plan 13.2 Exam Week Prometric and Passport Checklist 13.3 PSM Completion and Result Release 13.4 If You Pass: Level II Path 13.5 If You Fail: Retake and Deferral Strategy 13.6 Career Path, Charter Requirements, and Membership 13.7 Final Readiness Audit
2.1 Ethics Weight, Code, and Standards Map
Key Takeaways Explain This Topic AI
Ethical and Professional Standards carries a 15-20% weight on CFA Level I, the single largest topic, so weak ethics can decide a borderline result.
The Code states six broad commitments; the seven Standards (I through VII) convert them into testable duties.
Most Level I ethics items ask for the most or least appropriate action after facts change, not for rote definitions.
CFA Institute may apply the ethics adjustment near the Minimum Passing Score, so candidates near the line are reviewed on ethics performance.
Last updated: June 2026
Ethics Weight, Code, and Standards Map
Ethical and Professional Standards sits in the first part of the CFA Level I exam and carries a 15-20% topic weight , unchanged from 2025. That makes ethics the single largest area on the exam: out of 180 multiple-choice questions split across two 135-minute sessions, roughly 27 to 36 items test ethics. It behaves differently from formula topics. You almost never calculate an answer; you judge conduct when facts compete, incentives pull in different directions, and several responses sound partly reasonable.
A practical reason to master ethics is the ethics adjustment . CFA Institute has long stated that when a candidate's total score is near the Minimum Passing Score, the candidate's ethics performance is reviewed and can tilt the borderline decision. Strong quantitative work cannot rescue a candidate who guesses through ethics, so this section pays disproportionate dividends.
The Code of Ethics: six commitments
The Code of Ethics states six broad obligations members and candidates accept:
Act with integrity, competence, diligence, and respect.
Place the integrity of the profession and client interests above personal interests.
Use reasonable care and exercise independent professional judgment.
Practice in a professional and ethical manner.
Promote the integrity and viability of global capital markets.
Maintain and improve professional competence.
The seven Standards
The Standards of Professional Conduct turn those ideals into seven testable groups. A Level I item usually hides the Standard title, so your job is to name it from the facts.
Standard Title Core duty tested
I Professionalism Know the law; independence; misrepresentation; misconduct.
II Integrity of Capital Markets Material nonpublic information; market manipulation.
III Duties to Clients Loyalty; fair dealing; suitability; performance; confidentiality.
IV Duties to Employers Loyalty; additional compensation; responsibilities of supervisors.
V Investment Analysis Diligence and reasonable basis; communication; record retention.
VI Conflicts of Interest Disclosure; priority of transactions; referral fees.
VII Responsibilities as Member/Candidate Conduct in the CFA Program; reference to CFA Institute and the marks.
A repeatable triage process
When a vignette appears, ask who could be harmed. A client may be harmed by unsuitable advice, unfair allocations, or hidden fees. An employer may be harmed by stolen records or undisclosed outside pay. The market may be harmed by rumors, false volume, or trading on material nonpublic information. The profession may be harmed by exam misconduct or misuse of the CFA marks.
First question Standard area Action
Law, rule, or firm policy in conflict? I Professionalism Follow the stricter requirement.
Price or volume distorted? II Market integrity Avoid private information and manipulation.
Client relying on advice? III Client duties Check suitability and deal fairly.
Employer time, data, or pay affected? IV Employer duties Disclose, get consent, protect records.
Analysis supportable? V Recommendations Document basis, communication, records.
Exam or CFA marks involved? VII Candidate duties Keep exam content confidential; state status accurately.
Ethics answers depend on timing. Conduct acceptable after disclosure and consent may be a violation before disclosure. A recommendation reasonable when supported by a documented process becomes misleading if new risk information is ignored.
Trap: do not pick the most dramatic answer
The best action usually fixes the ethical risk while respecting process. Escalate to a supervisor or compliance officer when the firm can address the issue. Dissociate from misconduct when it continues. Resignation may be needed in serious cases, but most Level I scenarios expect investigation, disclosure, documentation, or supervision first.
Consider a portfolio manager who learns a model uses stale bond prices. If she waits until month-end because correcting prices reduces reported returns, the issue touches performance presentation, fair dealing, and the duty to communicate limitations. The ethical response is to correct the process, assess client impact, disclose as needed, and prevent recurrence.
How the exam phrases items
Level I ethics questions cluster into a few predictable forms, and recognizing the form saves time:
Most appropriate action : choose the response that cures the risk through proper process (correct, disclose, escalate), not the most aggressive option.
Least appropriate action / least likely to violate : read carefully, because the answer is the conduct that breaks a Standard or, in negative phrasing, the only compliant choice among violations.
Single Standard identification : name which Standard the facts implicate.
No violation occurred : roughly one in five ethics items has "no violation" as the credited answer, so do not assume every scenario contains misconduct.
A common distractor pattern offers an answer that is technically legal under some jurisdiction's law but still violates the stricter Code and Standards; another offers disclosure as a fix when refusal or dissociation is actually required. Train yourself to ask whether disclosure alone genuinely cures the harm.
For study, build a one-page Standards map. When you miss a question, write the Standard, the trigger fact, and the action that would have prevented the violation. Over many repetitions ethics becomes pattern recognition: identify pressure, hidden conflict, unfair treatment, weak basis, misleading presentation, or conduct that damages exam integrity, then match it to the controlling Standard before you read the answer choices.