Last updated: December 07, 2022

CFA Exam: Level 1 / Topics / 3 Easiest

No simple Yes or No answer can be given to the question posed in the headline.

However, we think there are 3 topics that could be nominated in the 'easiest topic' category. We give our nominations to:

    1. Portfolio Management (PM),

    2. Corporate Issuers (CI)*,

    3. Equity Investments (EI).

Especially if special conditions apply! If you meet these conditions, then the 3 topics should be – if not the easiest – then certainly easier for you.

We begin our analysis of the easy level 1 CFA exam topics with a table (see also all 10 topics tabulated).

Note that readings have been replaced with modules in the 2023 level 1 CFA exam curriculum but it's only a change in nomenclature.

Level 1 CFA Exam Topic Short Description Topic Weight No. of Modules
in 2023
No. of Formulas Predicted No. of Questions
Portfolio Management Portfolio: structure, risks & returns 5-8% 8 around 50 ca. 14
Corporate Issuers* Corporate governance
& decision-making
8-12% 8 around 50 ca. 16
Equity Market, industry & company analysis 10-12% 6 around 40 ca. 20

* Before 2022, CFA Program curriculum referred to Corporate Issuers as Corporate Finance.

The 3 topics have different exam weights. Equity gets the highest 10-12%, then there’s Corporate Issuers* with 8-12%, and Portfolio Management with the lowest exam weight of 5-8%. As regards the number of modules to study or formulas to remember, the 3 topics are comparable. As far as the number of questions in level 1 CFA exam goes, you can read more here.

On QM & PM Relationship

There’s a bond between Portfolio Management (PM) and Quantitative Methods (QM).

Rate of return or dispersion measures can serve as perfect illustrations of this inter-topic connection. The two concepts (and some more) are present in both Portfolio Management and Quantitative Methods. However, if you study QM first, PM gets so much easier.


Study QM before PM to pave the way for the quantitative PM modules. All else is pure theory.

The 8 modules comprising the PM topic can be labeled as either theoretical or quantitative (that’s right!):

Module 61 /theoretical/

in the intro, you will learn why portfolio diversification is so significant, who the market participants are and what steps is the portfolio management process made of.

As soon as you get familiar with all that, you will find out what portfolio managers must be able to do by studying:

Module 62 /quantitative/

portfolio risk and return (part I)

Module 63 /quantitative/

portfolio risk and return (part II)

With risk and return re-established in the context of a portfolio, you’re off to some basics of portfolio planning and construction followed by risk management process and some fintech and technical analysis issues:

Module 64 /theoretical/

you will get to know about the Investment Policy Statement (IPS) and its elements, how to construct a portfolio, that not every client willing to take the risk is able to take it or how strategic asset allocation differs from tactical asset allocation.

Module 65 /theoretical/

this module on behavioral biases was added to the 2022 curriculum.

Module 66 /theoretical/

you will become aware of the importance of the risk management process.

Module 67 /theoretical/

this module is devoted to technical analysis and has been moved from QM to PM as of 2020.

Module 68 /theoretical/

it’s a module that tells you about fintech and its applications to investment management (you’ll learn about artificial intelligence, machine learning, and distributed ledger technology).

We explain some of the major PM stuff in our free presentation The Power of Portfolio Diversification in 8 Diagrams:

Where Quantitative Skills Matter

There are 2 things every portfolio manager must be able to do:

1. Select 'the best' portfolios out of a larger set of investments, where 'the best' means with the best risk-return trade-off.

2. Choose from 'the best' portfolios those suitable for the client because compliant with the client’s investment profile.

Modules 62 & 63 are full of formulas and concepts that help you develop these analytical skills. You will learn:

1. how to calculate the portfolio’s risk and return,

2. that – on account of the risk-return trade-off – some portfolios are better than others and so we call them efficient portfolios (note: if we’d like to invest in risky portfolios only, we’d look for them on the efficient frontier),

3. that it’s better to invest in a portfolio consisting of an efficient portfolio and a risk-free asset rather than in the risky portfolios lying on the efficient frontier (to meet the risk-return trade-off),

4. how to use the utility theory to select the optimal investor portfolio,

5. how to make the analysis of risks and returns for different portfolios much easier thanks to the CAPM model.

So, to be able to grasp the real meaning of portfolio management (not only as a topic but also as a skill), you will surely need to understand what the expected rate of return, standard deviation, and correlation coefficient are and how they work. Without these QM concepts, there’s no portfolio management.

That is why you'll get Portfolio Management scheduled after Quantitative Methods if you choose Soleadea Topic Sequence while creating your study plan. We recommend our users what we believe to be the optimal level 1 topic sequence but you can also easily adjust it to your needs.


  • Where possible, topics are coupled based on the comparability of concepts, e.g. QM+PM (rate of return, standard deviation, covariance, etc.), FSA+CI (financing ratios).
  • More challenging topics are coupled with more easy ones allowing you to take a sort of a break meanwhile, so PM after complicated QM, CI after long and detailed FSA, or quite intuitive EI after more theoretical FI.
  • The most important topics – like FSA or QM – are scheduled upfront to ensure they are thoroughly studied.
  • The shortest topics – i.e. Derivatives and Alternatives – are scheduled more into the end. You can study them over a week if need be. Plus, DER should be easier to take in after you get familiar with the concept of options in FI.
  • Economics is scheduled next to last because if you're really needy for time that's the topic you can skim through (especially if you have some previous educational background in this area).

How Borrowing Can Make Life Easier

Let’s say you need a specific amount of money asap but you just don’t have it. Which solution is the easier one: borrow the money or make the money? Definitely, it’s a loan that helps you satisfy your need here and now. Especially if it’s a friend that you’re borrowing from ;).

It seems that the whole CI topic builds on this 'friendly borrowing' rule.

It borrows a lot:

from Quantitative Methods (QM) TVM,

from Portfolio Management (PM) beta & CAPM model,

from Financial Statement Analysis (FSA) financial ratios.

Get friendly with the 'lending' topics first and you can get done with Corporate Issuers quickly.

That’s right!

By studying all the 3 topics before you start reading Corporate Issuers, you can facilitate the understanding of this topic excessively.


Study QM, PM & FSA before Corporate Issuers to speed up its intake. Apart from a couple of more complex bits, CI theory is quite intuitive & easy to handle.

Using our CFA Exam Study Planner and the Soleadea Optimal Topic Sequence, that’s exactly what you'll get! The first 4 topics are scheduled as follows: Quantitative Methods, Portfolio Management, FSA, and Corporate Issuers .

Corporate Issuers: No Troubles?

Owing to the borrowed concepts, quite intuitive CI issues and relatively easy formulas, Corporate Issuers may actually prove to be the easiest level 1 topic.

Our categorization of the 8 CI modules and the analysis of their contents look as follows:

5 easy modules:

Module 28 (Corporate Structure & Ownership)

business structures

private and public corporations

lenders and owners

Module 29 (ESG)

introduction to corporate governance & ESG (environment, society, governance) you will get to know more about it when studying for your level 2 exam.

Module 30 (Business Models)

business models and risks

Module 31 (Capital Investments)

capital budgeting steps,

types of investment projects (conventional vs unconventional),

investment decision criteria such as NPV & IRR.

Module 35 (Leverage & Breakeven Point)

different types of risks from the perspective of a company (business risk, sales risk, operating risk, financial risk),

how the company measures its risks using measures of leverage (DOL/DFL/DTL = degree of operating/financial/total leverage).

3 moderate modules:

Module 32 (Working Capital)

corporate financing methods,

working capital management in a company,

ratios but you don’t need to worry about that ‘cos you already know how to interpret them having done your FSA first!

Module 33 (Cost of Capital)

WACC and its components:
you will learn how to calculate the cost of capital for various sources of financing,
beta & CAPM already explained in Portfolio Management,
cost of equity and pure-play method for beta estimation may prove a bit more complicated (shouldn’t be too problematic, though).

Module 34 (Capital Structure)

Modigliani-Miller proposition without and with taxes,

static trade-off theory & optimal capital structure,

competing stakeholder interests.

Can Level 1 Topic Get Any Simpler?

Many CFA exam candidates invest in stocks. If you’re an investor yourself and follow companies listed on the stock exchange, you will find the Equity Investments topic quite basic in many aspects (though equity is not only stocks).


Interest in stocks & listed companies gives you a head start. Besides, Equity Investments is mainly theory and it learns smoothly.

The topic is mostly theoretical, which means you need to hire your memory skills to get the job done (even if you never made any investments, no big deal you can still ace the topic if your memory’s good):

Module 36 – introduction to markets

Real basics, including types of assets and contracts, financial intermediaries, orders on the stock exchange, and the distinction between the primary and secondary security markets.

Module 37 – indices

Probably the most complicated of all Equity modules. You get to know different types of indices, how they are created, as well as what the advantages and disadvantages of the indices are. Also, examples from many markets throughout the world are given.

Module 38 – market efficiency

3 forms of market efficiency are explained: weak, semi-strong, and strong. To complement the picture, types of market pricing anomalies (e.g. January effect) and behavioral mechanisms behind investors’ decisions are described.

Module 39 – types of equity securities

Module 40 – industry and company analysis

Module 41 – basics of equity valuation

The last two modules include issues elaborated on in greater detail in the level 2 curriculum. Don’t get misguided by the fact that Equity can be defined as quite plain and simple among all 10 level 1 topics. In the level 2 exam, this topic gets the greatest weight (along with 3 different topics) and becomes more complex with its different valuation methods and scary formulas.

On Market Efficiency (& Not Only)

There are 3 forms of market efficiency: weak, semi-strong, and strong. Each next form includes the previous one as shown below:

Weak form efficient market when all past information about prices and volumes are included in the price of an asset.

Semi-strong form efficient market when all past information about prices and volumes as well as all publicly available information is included in the price of an asset.

Strong form efficient market when all past information about prices and volumes as well as all publicly available and confidential information is included in the price of an asset.

What follows is that:

for weak form efficient market technical analysis should yield no abnormal returns,

for semi-strong form efficient market both technical and fundamental analysis should yield no abnormal returns.

Not only markets can be efficient!

Also topics can be analyzed with respect to their efficiency. On the efficiency of topics, we write in one of our posts on study planning. Before you go, also take a minute to think about how efficient is your exam prep. If you wish it was more productive, use our CFA Exam Study Planner that puts you in charge, motivates you to work, holds you accountable, and makes you study:

It All Starts With Your CFA Exam Study Plan


& customize it to suit your needs :)

+ get: weekly control, maintained motivation & knowledge retention!