This comprehensive 249-page study guide provides detailed coverage of the Equity Investments section of the CFA® Level I 2025 curriculum. Meticulously organized and written by a CFA candidate who passed the exam, this resource offers both clarity and depth across the equity-related LOS (Learning Outcome Statements) outlined by the CFA Institute.
Designed to help candidates grasp complex equity concepts and apply them in real-world scenarios, these notes also serve as an excellent reference for financial analysts, investors, and business students.
Covered Topics:
1. Market Organization & Structure
Introduces financial systems, types of market participants, and order-driven vs. quote-driven markets. Understand how primary and secondary markets operate, and the role of brokers, dealers, and exchanges.
2. Security Market Indices
Covers construction, types (price-weighted, market cap-weighted, etc.), uses of indices in benchmarking, and index performance evaluation. Includes global equity indices and sector-specific examples.
3. Market Efficiency
Explores the Efficient Market Hypothesis (EMH), forms of efficiency (weak, semi-strong, strong), and implications for investment strategies. Includes behavioral finance factors that challenge traditional views.
4. Overview of Equity Securities
Provides insights into types of equity securities (common, preferred), private vs. public equity, and hybrid securities. Discusses equity ownership, risk, and return characteristics.
5. Company Analysis: Past and Present
Teaches how to analyze company performance using historical financials, trends in profitability, growth, financial health, and peer comparisons. Lays groundwork for deeper forecasting and valuation.
6. Industry and Competitive Analysis
Details top-down and bottom-up approaches to analyzing sectors and industries. Includes the use of frameworks like Porter’s Five Forces, industry life cycle stages, and macroeconomic factors affecting performance.
7. Company Analysis: Forecasting
Explains revenue and earnings projection, cost structure analysis, and scenario analysis. Offers tools to estimate inputs for valuation models based on expected growth and margins.
8. Equity Valuation: Concepts & Basic Tools
Delivers essential valuation techniques such as:
- Dividend Discount Models (DDM)
- Price Multiples (P/E, P/B, P/S)
- Free Cash Flow Models (FCFE & FCFF)
- Residual Income Models
This section ties together analytical tools for assessing intrinsic value vs. market price, supporting investment recommendations based on fundamental analysis.
Why This Resource is Ideal:
- Structured by CFA Exam Blueprints – Organized to align with 2025 CFA® Level I Equity LOS.
- Real-World Applications – Concepts are explained with practical relevance to actual markets.
- Detailed Explanations & Diagrams – Includes charts, tables, and formulas for better retention.
- Time-Saving – Perfect for revising each concept efficiently without missing key points.
- Expertly Written – Authored by a successful CFA candidate with a strong academic background.
Best Suited For:
- CFA Level I Candidates
- Junior Equity Analysts and Interns
- Finance Majors and MBA Students
- Investment Enthusiasts
- Professionals prepping for career pivots into equity research or asset management
This guide brings you beyond memorization and into analytical thinking, essential for mastering the equity portion of the CFA Level I exam. Whether you’re studying full-time or balancing preparation with work, this material offers unmatched clarity and exam relevance.
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