Updated for the 2026-2027 CFA® Level I curriculum.
Fixed Income in CFA Level I covers bond features, markets, valuation, yields, interest rate risk, credit analysis, and securitized products. Use this hub to see how those areas connect and open the focused study note you need.
Quick Answer
CFA Level I Fixed Income tests how debt securities are structured, issued, valued, and assessed for risk. A practical study order is to move from instruments and markets to valuation and yields, then to interest rate risk, credit analysis, and securitization. These CFA fixed income notes give you one place to follow that path or review a specific concept.
Key Takeaways About CFA Level I Fixed Income
A fixed-income security promises contractual cash flows, but its features and provisions can change how those payments behave.
Issuer type, market structure, and funding needs influence how securities are created, sold, and traded.
Bond pricing connects promised cash flows with required yields, spread measures, and the term structure of interest rates.
Duration, convexity, and curve-based measures help explain how bond prices respond to changes in rates and yields.
Credit analysis considers default risk, loss severity, seniority, financial strength, ratings, and spread behavior.
Securitization brings together pooled assets, structural protections, tranching, and risks such as mortgage prepayment.
This hub maps the topic. The child notes provide the detailed explanations, examples, exam traps, and practice questions.
What You Need to Know for CFA Level I Fixed Income
CFA Level I questions can test both calculations and interpretation. You should be able to:
Describe security features, bond indentures, covenants, cash flow structures, and contingency provisions.
Distinguish the roles of major issuers and investors, along with primary and secondary market activity.
Explain how corporate and government borrowers use short-term and long-term funding instruments.
Calculate or interpret bond prices, yields, spreads, spot rates, par rates, and forward rates when required.
Connect holding-period return and investment horizon with Macaulay, modified, effective, and money duration.
Use duration, PVBP, convexity, and key rate duration to interpret price sensitivity and curve risk.
Evaluate default probability, loss severity, recovery, seniority, ratings, financial ratios, and government credit risk.
Explain why assets are securitized and distinguish key features and risks of ABS, RMBS, and CMBS structures.
The goal is not to memorize each measure in isolation. Focus on what the measure tells you, which assumptions it uses, and when a different measure is more suitable.
How the Fixed Income Topic Fits Together
Start with the instrument. Learn what a bond promises to pay, which provisions can alter its cash flows, and how the indenture protects the issuer and investors.
Understand the market. Identify who borrows, who invests, which instruments meet different funding needs, and how securities move through primary and secondary markets.
Value the cash flows. Connect a bond's price with its yield, spread, spot rates, par rates, forward rates, and position on the yield curve.
Measure interest rate risk. Use duration and convexity to estimate price sensitivity, then consider how curve-based measures capture non-parallel changes.
Assess credit and structure. Review the borrower's ability to pay, the likely loss after default, and how securitization redistributes cash flows and risk.
Following this sequence makes the formulas easier to place. You first understand the security and its cash flows, then learn how to value those cash flows and test how the value may change.
CFA Level I Fixed Income Study Notes
The full fixed income CFA Level 1 study path is organized into five clusters. Choose a linked note for a focused review, or use the complete list to plan the next concept in your study sequence.
Fixed-Income Foundations, Markets, and Issuers
Start with instrument features, cash flows, market structure, funding choices, and the main issuer groups.
Fixed-Income Cash Flow Structures and Contingency Provisions
Legal, Regulatory, and Tax Implications for Fixed-Income Securities
Issuance and Trading of Government and Corporate Fixed-Income Instruments
Bond Valuation, Yields, and the Term Structure
Move into pricing, yield measures, spreads, spot rates, par rates, forward rates, and the relationships among them.
Interest Rate Risk, Duration, and Convexity
Review sources of return and the main tools used to measure how bond prices respond to yield and curve changes.
Bond Holding Period Return, Duration, and Investment Horizon
Relationship Among a Bond's Holding Period, Macaulay Duration, and Investment Horizon
Modified Duration, Money Duration, and Price Value of a Basis Point (PVBP)
Effective Duration and Convexity for Bonds With Embedded Options
Bond Percentage Price Change Using Curve-Based Duration and Convexity
Credit Risk and Credit Analysis
Review default risk, loss severity, creditworthiness, financial ratios, ratings, seniority, spreads, and government credit.
Securitization and Structured Products
Finish with securitization, covered bonds, asset-backed securities, CDOs, mortgage loans, RMBS, CMBS, and prepayment risk.
How to Use These Fixed Income Study Notes
If CFA Level I Fixed Income is new to you, begin with the first cluster and work through the topic in sequence. On each child page, use the Previous and Next links to keep moving without returning to the directory after every note.
If you are reviewing a weak area, start with the note closest to the question you missed. Read the Quick Answer first, then work through the example, common exam traps, and practice question. This gives you an active review instead of another passive read.
Return to this hub when two concepts begin to blur together. The five clusters show whether you are dealing with an instrument feature, a valuation input, an interest rate risk measure, a credit issue, or a securitization structure.
Common Fixed Income Areas Candidates Mix Up
Coupon rate vs yield to maturity. The coupon rate determines a bond's scheduled coupon payments. Yield to maturity is the discount rate that equates the bond's promised cash flows with its current price, subject to its assumptions. Review Relationships Between Bond Prices and Bond Features and Yield and Yield Spread Measures for Fixed-Rate Bonds.
Spot rates vs par rates vs forward rates. Spot rates discount individual cash flows, par rates apply to bonds priced at par, and forward rates describe implied future borrowing periods. Use Spot Curve, Yield Curve, Coupon Bonds, Par Curve, and Forward Curve to keep the curves and rates connected.
Macaulay vs modified vs effective duration. Macaulay duration is a weighted-average time measure, modified duration estimates price sensitivity to yield changes, and effective duration is designed for securities whose cash flows may change when rates change. Compare them in Macaulay, Modified, and Effective Duration.
Duration vs convexity. Duration gives a first-order estimate of price sensitivity. Convexity adjusts for the curved price-yield relationship and can improve the estimate for larger yield changes. Review Bond Risk and Return Using Duration and Convexity.
Credit risk vs yield spread drivers. Credit risk concerns the chance and cost of a borrower failing to meet its obligations. A yield spread can also reflect liquidity, maturity, and market conditions. Compare Credit Risk, Default Probability, and Loss Severity with Credit Spread, Liquidity, Yield, and Maturity.
Covered bonds vs asset-backed securities. Both involve pools of assets, but their legal structure and investor claims differ. Review Covered Bonds to start the comparison.
RMBS and prepayment risk vs CMBS risk. Residential mortgage structures are especially sensitive to borrower prepayments, while commercial mortgage structures depend more on property cash flows, refinancing, and loan terms.
Continue Your CFA Level I Prep With KeyPoint
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FAQs About CFA Level I Fixed Income
What does Fixed Income cover in CFA Level I?
Fixed Income covers security features, issuers and markets, bond valuation, yield measures, the term structure, interest rate risk, credit analysis, and securitized products. The curriculum combines definitions, calculations, and interpretation.
What should I study first in CFA Level I Fixed Income?
Start with basic bond features, cash flow structures, and market participants. Then move into pricing and yields before studying duration, convexity, credit analysis, and securitization. This order gives later formulas a clear purpose.
What is a fixed-income investment?
A fixed-income investment is a debt security that gives the investor a contractual claim on specified cash flows. Those cash flows often include interest and principal payments, but embedded options or other provisions can change their timing or amount.
Which Fixed Income formulas should I know for CFA Level I?
Focus on the formula groups required for pricing and yields, spot and forward rates, holding-period return, duration, PVBP, convexity, and credit loss measures. Use the formula-based child notes, including Modified Duration, Money Duration, and PVBP and Calculating and Interpreting Convexity, for the full calculations and practice.
How should I use these CFA Level I Fixed Income study notes?
Study in sequence when the topic is new. For review, open the note tied to a missed question, read its Quick Answer, and complete its example and practice question. Return to the hub when you need to reconnect that concept with the wider topic.