This comprehensive CFA® Level I (2025) Fixed Income study guide provides a 252-page deep dive into every concept, formula, and learning objective you’ll encounter in the Fixed Income section of the CFA Level I exam. Authored by a passed candidate, this resource is tailored to help you understand not just the what but also the why behind bond pricing, yield measures, duration, credit risk, and structured products.
What You’ll Learn:
1. Fixed Income Instrument Features
Breaks down bond characteristics including maturity, coupon structures, embedded options, and indenture details.
2. Fixed Income Cash Flows and Types
Explores cash flow classifications: bullet bonds, amortizing securities, sinking funds, and others.
3. Fixed Income Issuance and Trading
Learn how corporate and government bonds are issued, priced, and traded in primary and secondary markets.
4–5. Fixed Income Market for Corporate & Government Issuers
Insight into institutional frameworks, regulatory environments, and investor demand in both sectors.
6. Bond Valuation – Prices and Yields
Master the pricing of fixed income securities using present value formulas, and learn the effects of market interest rate changes.
7–8. Yield and Spread Measures
Covers nominal yield, current yield, yield to maturity (YTM), yield to call (YTC), spread to benchmark, and floating rate structures.
9. The Term Structure of Interest Rates
Understand yield curve construction including spot rate, par curve, and forward rate modeling techniques.
10–12. Interest Rate Risk, Duration, and Convexity
Quantify how bond prices respond to interest rate changes through Macaulay, Modified, and Effective Duration. Assess risk with convexity to refine your portfolio strategies.
13. Curve-Based and Empirical Risk Measures
Learn how to implement empirical models like key rate durations and factor models in practical scenarios.
14–16. Credit Risk and Credit Analysis
Explore credit spread drivers, rating methodologies, and the risk-return relationship for both sovereign and corporate issuers. Assess default probability, loss given default (LGD), and expected loss (EL).
17. Fixed Income Securitization
Gain foundational knowledge of the securitization process, its role in financial markets, and legal structure of SPVs (Special Purpose Vehicles).
18. Asset-Backed Securities (ABS)
Understand how loans, leases, and receivables are bundled into investable instruments. Learn about tranching, credit enhancement, and cash flow structures.
19. Mortgage-Backed Securities (MBS)
Delve into residential and commercial MBS, prepayment risk, extension risk, and the role of agencies like Fannie Mae and Freddie Mac.
Why These Notes Work:
- Targeted for 2025 CFA Curriculum: Aligned with current CFA Institute Learning Outcome Statements (LOS).
- Real-World Focus: Applications to portfolio management, bond trading, and risk analysis.
- Candidate-Tested & Written: Authored by a CFA Level I candidate who passed using this methodical breakdown.
- Visually Structured: Includes diagrams, tables, formulas, and definitions that simplify high-yield concepts.
Ideal For:
- CFA Level I Candidates
- Aspiring Fixed Income Analysts
- Credit Analysts and Treasury Professionals
- MBA Students with a finance concentration
- Self-learners looking to build foundational bond market expertise
Whether you’re preparing for the CFA exam or working in asset management, this document is a must-have resource for mastering fixed income. It bridges theoretical knowledge with quantitative applications, making complex concepts digestible and test-ready.
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