IFoA CB1 study guide
IFoA CB1 · Work through your exam, one topic at a time.
CB1 Business Finance is a core subject in the Institute and Faculty of Actuaries' qualification pathway, sitting alongside actuarial mathematics subjects to give candidates the commercial and financial grounding that actuarial work demands. It suits trainee actuaries and analysts who need to read financial statements, value assets, appraise investment projects, and understand how firms raise and manage capital. The IFoA CB1 study guide has 8 sections and about 2,386 words.
01Financial Institutions and Markets
This domain examines how savers and borrowers are matched, how securities trade, and how prices and yields convey information. CB1 expects you to distinguish institution roles from market mechanisms and to apply pricing logic, not just define terms.
288 words, about 1 min02Financial Products and Their Valuation
This domain tests whether you can value cash-flow claims using consistent discounting and no-arbitrage. Expect bond and equity valuation, derivative payoffs, and the assumptions behind pricing models.
309 words, about 2 min03Principles of Corporate Finance and Capital Structure
This domain tests capital budgeting, cost of capital, financing choices and payout policy. You must link investment decisions to cash flow, risk and financing, and recognise when a textbook rule breaks down.
315 words, about 2 min04Financial Analysis and Performance Measurement
This domain tests your ability to interpret financial statements, compare performance and judge whether reported profit reflects economic reality. Expect ratio construction, DuPont decomposition, cash-flow quality and value-based measures.
295 words, about 1 min05Corporate Governance, Regulation and Ethics
This domain tests how organisations are directed and controlled, how regulators pursue prudential and conduct objectives, and how ethical judgement is applied. CB1 expects you to connect governance failures to incentives, disclosure and accountability.
303 words, about 2 min06Risk Management and Financial Risk
This domain tests risk identification, measurement, appetite and control. Expect market, credit, liquidity and operational risk, plus capital adequacy, hedging and the limitations of quantitative models.
291 words, about 1 min07Behavioural Finance and Decision-Making
This domain tests how real decision-makers deviate from rational expected-utility models, and how those deviations affect markets and corporate decisions. Expect biases, heuristics, prospect theory and limits to arbitrage.
291 words, about 1 min08Business Strategy, Planning and Control
This domain tests how organisations set direction, allocate resources and monitor performance. Expect strategic analysis, budgeting, variance analysis and performance-measurement systems that link plans to control.
294 words, about 1 min