Fixed Income
Fixed-income questions test bond features, markets, pricing, yields, curves, duration, convexity, credit analysis, securitization, ABS, and MBS.
How to study for CFA Level I
Use CFA Institute's Level I topic weights and learning outcomes as the map: combine ethics discipline with calculation fluency, financial reporting analysis, valuation basics, and portfolio risk-return reasoning.
Core concepts
Concept 1
Fixed Income questions reward the answer that follows the official source, the professional role, and the stated facts.
Exam cue: Identify the candidate role, client or public risk, source rule, calculation, or process step being tested.
Concept 2
The strongest answer identifies the rule, safety concern, ethical duty, calculation, client factor, or process step before acting.
Exam cue: Check whether the fact pattern is using a national standard, jurisdiction rule, handbook policy, or scenario-specific instruction.
Concept 3
Eliminate answers that ignore requirements, skip documentation, overreach the role, or treat convenience as the standard.
Exam cue: Choose the compliant and professionally scoped answer before the convenient or familiar answer.
Risk pitfalls and guardrails
Treating related standards as interchangeable without checking the source.
Guardrail: Avoid answers that rely only on habit, ignore the stated source, skip safety or compliance steps, or choose convenience over the professional standard.
Skipping screening, documentation, authorization, sanitation, recordkeeping, or other required procedure.
Guardrail: Avoid answers that rely only on habit, ignore the stated source, skip safety or compliance steps, or choose convenience over the professional standard.
Choosing an answer that protects convenience instead of client safety, public protection, or the stated professional duty.
Guardrail: Avoid answers that rely only on habit, ignore the stated source, skip safety or compliance steps, or choose convenience over the professional standard.
Memory anchors
Bond Indenture
A bond indenture states the issuer's obligations, covenants, payment terms, and bondholder rights.
Coupon Rate
The coupon rate determines periodic interest payments as a percentage of par value.
YTM
Yield to maturity is the discount rate that equates a bond's price to promised cash flows.
Spot Curve
The spot curve gives zero-coupon rates by maturity.
Forward Rate
A forward rate is an implied future interest rate derived from current spot rates.
Duration
Duration measures a bond's price sensitivity to changes in yield.
Convexity
Convexity captures curvature in the price-yield relationship and adjusts duration estimates.
Credit Risk
Credit risk includes probability of default, loss severity, and spread volatility.
Checkpoint rule
Do the check-up only after you can summarize each concept in one sentence and identify one dangerous pitfall from memory.
Knowledge Check (after reading)
Short check-up to confirm understanding of this module.
Check-up Questions
The par value (face value) of a bond represents the amount that:
Among the contractual features of a bond, the coupon rate of a fixed-rate bond determines the:
Answer all questions to submit.
Next step personalized recommendations
Continue learning
Move forward only after this module is stable.
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