Investment Foundations study guide
Investment Foundations · Work through your exam, one topic at a time.
The Investment Foundations Certificate is a self-paced online program from CFA Institute that gives a broad, practical overview of how the investment industry works. It is aimed at three groups: students exploring finance for the first time, professionals outside the industry who want greater financial fluency, and people already in support roles inside investment firms who want to deepen their knowledge. The Investment Foundations study guide has 5 sections and about 2,107 words.
01Industry Overview and Structure
This domain tests how the investment industry is organized: who supplies capital, who intermediates it, how firms split into buy-side and sell-side roles, and what duties and controls keep the system working. Questions typically ask you to place a participant in the correct part of the value chain or identify a conflict of interest.
429 words, about 2 min02Type and Functioning of Markets
This domain tests how securities are issued and traded: primary versus secondary markets, exchange versus over-the-counter trading, order-driven versus quote-driven mechanisms, and the mechanics of orders, clearing, and settlement. Expect questions that compare market structures or calculate an execution price.
451 words, about 2 min03Investment Instruments
This domain tests the main asset classes and their defining features: equity ownership rights, fixed-income cash flows and price-yield behavior, derivative payoffs, and the structure of pooled and alternative investments. Questions often compare instruments or compute a return or payoff.
388 words, about 2 min04Investment Inputs and Tools
This domain tests the quantitative tools used to evaluate investments: return and risk measurement, time value of money, valuation, portfolio theory, and performance measurement. Questions often require a calculation or a choice between competing measures.
427 words, about 2 min05Serving Client Needs
This domain tests how investment professionals translate client circumstances into suitable advice: knowing the client, writing an investment policy statement, distinguishing ability from willingness to take risk, and managing duties, fees, and reporting. Questions often present a client scenario and ask which recommendation or constraint is appropriate.
412 words, about 2 min