CFA Level 1 Fixed Income Study Guide
Master bond valuation, yield measures, duration, convexity, and credit analysis with 230+ practice questions and detailed explanations.
Fixed Income Topic Breakdown
Key Fixed Income Concepts
Master these fundamental concepts that appear regularly on the CFA Level 1 exam
Bond Pricing
HighUnderstanding the inverse relationship between bond prices and yields
Duration & Convexity
HighMeasuring sensitivity of bond prices to interest rate changes
Yield Curve Analysis
MediumInterpreting spot rates, forward rates, and yield curve shapes
Credit Risk Assessment
MediumEvaluating credit quality and spread risk in corporate bonds
How to Ace CFA Level 1 Fixed Income
Master Bond Math
Fixed Income requires calculation speed. Practice PV/FV calculations, YTM solving, and duration until they're second nature. Use your BA II Plus calculator efficiently.
Understand Duration deeply
Duration isn't just a formula - understand how it measures price sensitivity and how it changes with coupon, YTM, and maturity. Convexity builds on this foundation.
Learn Yield Curve Shapes
Understand normal, inverted, and flat yield curves and what they signal about future economic conditions. Practice calculating spot rates from YTM and forward rates.
Focus on Credit Risk
Credit analysis is heavily tested. Understand credit spreads, default risk, and the difference between investment grade and high yield bonds.
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Fixed Income FAQs
How much of the CFA Level 1 exam is Fixed Income?
Fixed Income represents 11-14% of the CFA Level 1 exam, making it one of the most heavily weighted topics. This translates to approximately 20-25 questions out of 180 total questions.
What are the key Fixed Income topics to master?
Focus on bond valuation (pricing bonds given YTM), duration and convexity (interest rate risk), yield curve analysis, credit risk fundamentals, and securitization basics.
How do I calculate duration for the CFA exam?
Macaulay duration = (PV of cash flows × time to receipt) / Bond Price. Modified duration = Macaulay duration / (1 + YTM/m). Focus on understanding how duration changes with coupon rate, YTM, and time to maturity.