CAIA Level 1: Most Common Mistakes Candidates Make (and How to Avoid Them)
- Dimitri Dangeros, CFA, CAIA
- Jul 17
- 4 min read
Updated: 36 minutes ago
As the September 2025 CAIA Level I exam approaches, avoiding the common missteps that derail even the best‑prepared candidates is critical. The CAIA Association has updated the curriculum exclusively for the 2025 exam cycle—delivered in digital form only—so all questions reflect content from the new package, with no legacy print exceptions. CAIA Level 1 Most Common Mistakes
Over 200 multiple‑choice questions must be answered in four hours, and fewer than 30% require calculations. Below are the 10 most common mistakes candidates make—focused on exam format, content, topic priorities, and practice exam strategy—and how to avoid them.
1. Misunderstanding the Exam Format & Digital Interface
Many candidates treat CAIA Level I like a paper‑based test, only to be thrown off by the computer interface and timing.
Key Facts: 200 questions, 4 hours, built‑in calculator tool or approved TI BA II Plus models only.
Common Slip‑Ups:
Fumbling with on‑screen navigation (flagging items, reviewing flagged questions).
Not knowing how to bring up the formula sheet or spreadsheet pilot tool.
How to Avoid:
Practice on the official sample exam (available free in the CAIA Study Tools section) to master navigation and time‑tracking.
Replicate the screen resolution and break schedule (two 2‑hour sections with a 30‑minute optional break).
2. Neglecting Topic Weightings CAIA Level 1 Most Common Mistakes
Treating all topics equally leads to misallocated study time—and missed points on high‑weight areas.
Topic | Weighting (%) |
Professional Standards & Ethics | 15 – 25 |
Introduction to Alternative Investments | 20 – 28 |
Real Assets | 11 – 17 |
Private Equity | 6 – 10 |
Private Debt | 10 – 15 |
Hedge Funds | 11 – 17 |
Digital Assets | 4 – 8 |
Funds of Funds | 2 – 6 |
Common Mistake: Spending equal hours on a 4% Digital Assets section as on a 25% Ethics section.
Fix: Build your study schedule around these weightings—tackle Ethics and Alternative Investments first, then mid‑weight topics, and reserve Digital Assets/FOF for final review.
3. Underpreparing New Curriculum Topics (Digital Assets & Private Debt)
Even candidates who ace traditional alternative investments stumble on brand‑new material.
Digital Assets (4 – 8%): Blockchain mechanics, tokenization frameworks, DeFi governance.
Private Debt (10 – 15%): Loan‑to‑own strategies, fulcrum securities, credit risk analysis.
Common Slip‑Ups:
Skimming instead of mastering learning objectives in the Digital Assets chapter of the curriculum companion.
Confusing private equity IRR methods with private credit performance metrics.
How to Avoid:
Drill definitions (“distinguish proof of work vs. proof of stake,” “evaluate credit default swap structures”).
Map learning objectives verbatim from the 2025 Curriculum Companion to your flashcards.
Do focused practice questions from question banks that tag these new sections.
4. Superficial Quantitative Foundations
Quantitative questions account for nearly 30% of the Introduction to Alternative Investments section, yet many candidates rely on calculators instead of understanding underlying concepts.
Frequent Errors:
Misapplying hypothesis tests (Type I vs. Type II errors).
Confusing risk‑neutral valuation with real‑world pricing.
Remedy:
Re‑derive formulas by hand weekly (e.g. risk measures, present value).
Explain calculations aloud to a study partner—teaching cements understanding.
Use ‘active recall’: after studying a concept, immediately test yourself without looking at notes.
5. Overlooking Vignette‑Based Ethics Scenarios
Ethics carries up to 25% of your score, and more than half the Ethics items appear in multi‑question vignettes.
Typical Pitfall:
Memorizing Standards of Practice bullet points but failing to analyze scenario nuances (e.g. conflicts of interest in fund manager compensation).
Best Practice:
Complete 40+ timed Ethics vignettes, under exam‑style conditions.
Outline your rationale in bullet form before selecting an answer—build the habit of structured thinking.
6. Using Outdated or Irrelevant Materials
Any resource not explicitly labeled “2025 Edition” risks misaligning you with current learning objectives.
Why It Hurts:
Terminology changes (e.g. “Additional Strategies” renamed “Funds of Funds”).
Shifts in emphasis (Derivatives & Risk‑Neutral Valuation moved from Module II to Module I).
Solution:
Cross‑check every book or bank against the CAIA Exam Curriculum Overview.
Download the official 2025 digital curriculum and Curriculum Companion—use them as your primary reference.
7. Skipping Full‑Length & Digital Mocks
Focusing only on topic drills leaves you unprepared for the mental endurance and pacing of a four‑hour test.
Common Oversights:
Never completing a two‑part, back‑to‑back 100‑question simulation.
Ignoring the time left indicator and flagging tools.
Fix:
Schedule three full mocks: six weeks out, three weeks out, and one final “dress rehearsal” in the week before.
Review with purpose: for every missed question, write a 2–3 sentence error log explaining why you chose wrongly.
8. Failing to Review & Learn from Practice Errors
It’s not enough to see that you answered incorrectly—you must internalize why.
Typical Mistake:
Marking a question as done once corrected, without revisiting the rationale later.
Corrective Action:
Maintain an “Error Notebook”: categorize mistakes by topic, question type, and root cause (e.g. calculation slip, misread stem).
Weekly error‑review sessions: revisit old mistakes, ensuring they don’t reoccur.
9. Calculator Mishaps & Formula Gaps
Only the TI BA II Plus (and Professional) are allowed. Not knowing keystrokes leads to lost time or wrong inputs.
Common Errors:
Incorrect use of payment (PMT) vs. cash‑flow (CF) functions.
Forgetting to clear previous entries, leading to cumulative errors.
Practice Drill:
Devote 10 minutes each study day to calculator drills—amortization schedules, NPV/IRR problems, statistical functions.
Create a one‑page “cheat sheet” of keystrokes (for your personal review, not for exam use).
10. Poor Time Management & Skip‑and‑Return Strategy
With only 72 seconds per question, panicking on one item can derail your entire section.
Frequent Misstep:
Spending 3–4 minutes on a single quantitative problem, then rushing the rest.
Winning Strategy:
Flag and skip any question that exceeds 90 seconds—allocate time later.
Triage based on difficulty: answer low‑hanging fruit first (easy definitional or ethics items).
Regular time checks: glance at the on‑screen timer every 25 questions to stay on pace.
Avoiding these 10 exam‑specific mistakes will sharpen your preparation and significantly increase your odds of passing CAIA Level I on the first try. Align your study plan to the 2025 digital curriculum, practice under realistic conditions, and turn each error into a learning opportunity. With focused effort and smart strategy, you’ll enter the exam center ready to succeed.
Good luck on your CAIA Level I journey!
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