How many questions are on the CAIA Level I exam?

CAIA Level I consists of 200 multiple-choice questions administered in a 4-hour computer-based exam at Prometric testing centers.

What is the CAIA Level I pass rate?

The CAIA Association does not publish exact pass rates, but historical estimates suggest approximately 60 to 70% per level (CAIA Association).

How many hours should I study for CAIA Level I?

The CAIA Association recommends approximately 200 hours of study. Most candidates study over 2 to 4 months, dedicating 12 to 15 hours per week.

Is a calculator allowed on the CAIA Level I exam?

No. The CAIA Level I exam does not permit calculators. Questions are designed so that calculations can be done by hand or are conceptual in nature.

CAIA Level I Study Guide (2026)

CAIA Level I is a 4-hour, 200-question multiple-choice exam testing foundational knowledge of alternative investments, including hedge funds, private equity, real assets, structured products, and digital assets (CAIA Association). The estimated pass rate is approximately 60 to 70% (CAIA Association).

Alternative investments continue to grow as a share of institutional portfolios. Pension funds, endowments, and sovereign wealth funds now allocate 20 to 40% or more to alternatives. The CAIA designation is the recognized credential for professionals working in this space.

What the Exam Covers

CAIA Level I tests knowledge across these topic areas (CAIA Association):

Professional Standards and Ethics

Ethical conduct, fiduciary duty, and professional standards specific to alternative investments. Similar in spirit to CFA ethics but focused on alternative investment contexts (conflicts of interest in fund management, fee disclosure, allocation practices).

Introduction to Alternative Investments

Overview of the alternatives landscape: why alternatives exist, their role in portfolios, common characteristics (illiquidity, complexity, less regulation), and the institutional investor perspective.

Real Assets

Real estate (public and private REITs, direct ownership), infrastructure, natural resources, farmland, and timberland. Focus on valuation approaches, risk factors, and return drivers for each category.

Key Concept

Real assets questions often test whether you understand the difference between public and private market exposure to the same underlying asset. A public REIT and a private real estate fund have the same underlying asset but very different liquidity, correlation, and return profiles.

Private Securities

Private equity (buyouts, growth equity), venture capital, private debt (direct lending, mezzanine). Key concepts include fund structures (LP/GP), fee arrangements (2 and 20), J-curve, IRR vs. TVPI, vintage year effects, and the private equity lifecycle.

Hedge Funds

Long/short equity, market neutral, global macro, event-driven, relative value, managed futures. The exam tests your understanding of strategy mechanics, risk exposures, fee structures, and how different strategies perform in various market environments.

Common Trap

Candidates often memorize hedge fund strategy names without understanding the underlying positions. The exam tests whether you can identify what a strategy is actually doing (long, short, hedged) and what risks it carries, not just its label.

Structured Products

Securitization, asset-backed securities, collateralized debt obligations (CDOs), mortgage-backed securities. Focus on tranche structures, credit enhancement, and the risk characteristics of different seniority levels.

Digital Assets

Blockchain technology, cryptocurrencies, tokenization, decentralized finance. This is a newer topic area. The exam tests foundational understanding rather than deep technical knowledge.

Portfolio Integration

How alternatives fit into multi-asset portfolios: diversification benefits, liquidity considerations, risk budgeting, and allocation frameworks. This ties everything together.

Study Timeline (12 Weeks)

The CAIA Association recommends approximately 200 hours of study (CAIA Association). Here is a 12-week plan at 15 to 18 hours per week.

Weeks 1 to 3: Foundation Topics

Cover ethics, the introduction to alternatives, and real assets. These are the most approachable topics and build the conceptual framework for everything that follows. Work 15 to 20 practice questions per day.

Weeks 4 to 6: Core Alternative Asset Classes

Private securities and hedge funds are the most heavily tested areas. Spend extra time here. Learn fund structures, fee calculations, and performance metrics thoroughly. Work 20 to 30 practice questions per day.

Weeks 7 to 9: Structured Products, Digital Assets, and Integration

Structured products require careful attention to tranche mechanics. Digital assets is lighter weight. Portfolio integration ties all the asset classes together. Work 20 to 30 practice questions per day and begin mixing topics.

Weeks 10 to 12: Practice Exam Phase

Take full-length practice exams (200 questions, 4 hours) every 3 to 4 days. Use the time between to review wrong answers and shore up weak areas.

Key Concept

The CAIA Level I exam does not allow calculators. All calculations must be doable by hand. Practice quick mental math for IRR approximations, fee calculations, and return computations.

Practice Strategy

Aim to complete 800 to 1,200 practice questions before exam day. Start with topic-specific practice, then shift to mixed sets in the final month.

FreeFellow offers free CAIA Level I practice questions with adaptive difficulty, detailed solutions, and performance analytics by topic.

Key benchmarks:

After 400 questions: you should be scoring 55 to 60% on mixed practice
After 800 questions: target 65 to 70% on practice exams
Exam ready: scoring 70%+ consistently on full-length mocks

Common Mistakes

Treating it like a CFA exam. The CAIA tests different skills. Less calculation, more conceptual understanding of alternative asset characteristics, structures, and risks. Adjust your study approach accordingly.

Skipping ethics. Ethics is tested at Level I and can make the difference for borderline candidates. It is also the most straightforward section if you prepare for it.

Not enough practice questions. Reading the CAIA curriculum without working through questions is the same trap candidates fall into on any exam. Active recall beats passive reading.

Common Trap

The no-calculator policy catches candidates off guard. Practice all calculations by hand during your study period. Do not rely on a calculator during practice and then face mental math on exam day.

Free Resources

FreeFellow CAIA Level I Practice - free practice questions with adaptive difficulty, solutions, and analytics
CAIA Association curriculum - included with exam registration
Alternative Investment Analyst Review (AIAR) - free research articles from the CAIA Association

Start Preparing

CAIA Level I is achievable with consistent effort over 10 to 12 weeks. The content is interesting if you are drawn to alternatives, and the credential carries real weight in institutional investment circles.

Begin with free CAIA Level I practice questions on FreeFellow.