CAIA Level I — Exam Survival Playbook

Window: Global | Focus: Intro to Alternative Investments | 200 MCQs, 4 hours (typically split in 2 sessions)

Must-do topics

Alternative investments landscape
• What counts as “alts”: hedge funds, private equity, real assets, commodities, structured products
• Why investors use them: diversification, illiquidity premia, inflation hedging, absolute return

Private equity basics
• Venture vs growth vs buyout vs distressed
• J-curve, capital calls vs distributions, IRR vs multiple, carry and fee structures

Real estate & real assets
• Direct vs indirect real estate, REITs, core vs opportunistic
• Infrastructure assets, farmland, timber, natural resources

Hedge funds
• Strategy buckets: long/short equity, event-driven, macro, relative value, managed futures
• Fee structures, leverage, liquidity terms, side pockets, gates

Commodities & derivatives
• Spot vs futures, convenience yield, roll yield, contango vs backwardation
• Structured products basics (capital-protected notes, yield-enhancement notes)

Portfolio management & risk
• Role of alts in portfolios, correlation stories, liquidity and valuation risk
• Due diligence frameworks, operational risk, governance

Top traps (avoid)

Treating CAIA like CFA I and over-focusing on formula crunching instead of understanding structures and risks

Memorising “strategy lists” without knowing how they actually behave in markets

Ignoring operational risk and due diligence (the “boring” bits that the exam loves)

Forgetting that liquidity terms and valuation can be just as important as performance

Getting lost in commodity futures jargon without a simple mental picture of how roll works

Time split

200 questions, 240 minutes → ~1.2 minutes per question

Practical pacing:
• Q1–75 → ~90 minutes (build confidence on fundamentals)
• Q76–150 → ~90 minutes (strategies + risk/portfolio questions)
• Q151–200 → last 60 minutes + flagged questions

Last-48h checklist

Redo 60–80 mixed questions (split across: PE, hedge funds, real assets, commodities, risk/portfolio)

Skim your own 2–3 page “alts map”:
• For each asset class: how it works, where return comes from, key risks, typical investors

Re-read:
• Fee structures, liquidity terms, redemption conditions, side letters, valuation practices

Work 10–15 quick items just on roll yield / term structure and PE cash flow patterns

Make sure you can explain each major strategy in 2–3 sentences aloud

Quick frames

Always ask:
• “What is the source of return here?” (carry, credit spread, illiquidity, mispricing, beta with leverage, etc.)
• “What risk is the investor really taking?” (leverage, liquidity lockup, key-person, model risk, legal)

PE: IRR is sensitive to timing; multiple is about overall wealth creation. Don’t confuse the two.

Commodities: total return = spot move + roll yield + collateral yield (conceptually).

Speed tactics

For strategy questions:
• Match the description to a few core patterns you know (“event-driven”, “relative value”, “macro”) before touching answer choices.

For risk/due diligence questions:
• Pick the answer that is most boring and process-oriented (document, check, verify, diversify).

If you’re stuck:
• Eliminate answers that describe risks or features that don’t fit the asset class (e.g., talking about prepayment risk in commodities).

Day-of mini-plan

Warm-up: 10–12 quick questions — 2 each from PE, hedge funds, real assets, commodities, risk.

During exam:
• Don’t spend 5 minutes on one exotic structured product; flag and move once you’ve taken a reasonable shot.

Last 15 minutes:
• Clear blanks, revisit any obvious misreads, then stop fiddling.