While there are no required prerequisites to sit for the CAIA exams, candidates are assumed to have an understanding of the basic concepts of finance and quantitative analysis. This includes knowledge about the instruments that trade in traditional markets, models used to value these instruments, and the tools and methods used to analyze data.

The CAIA Prerequisite Program organizes these foundations into topics and learning objectives in a study guide similar to its Level I and Level II programs. Candidates can expect to incorporate this material into Level I and Level II examination questions. For example, a candidate may be expected to evaluate the output of a regression analysis, calculate the value of a bond and analyze the payoffs of various option contracts.

We recommend that all candidates work through the outline and take the Prerequisite Diagnostic Review (PDR), an assessment tool available on the CAIA website. Candidates who score 70% or higher on the PDR are assumed to have the background knowledge necessary to begin Level I of the CAIA program.

The study guide is designed to be used in conjunction with two textbooks: Quantitative Investment Analysis by DeFusco, McLeavey, Pinto, and Runkle (Wiley Publishers, 2nd Edition), and Investments by Bodie, Kane, and Marcus (McGraw Hill Publishers, 8th Edition). These textbooks are recognized as the best blend of practical and theoretical coverage of traditional investments and quantitative analysis. While you can obtain the material from other textbooks, working through the material will be made easier by using these materials.

Once comfortable with all prerequisite material, take the alternate version of the Prerequisite Diagnostic Review to reassess your knowledge.