Whatever this is, I can guarantee you it will not be the final word (or end the incessant questions) of pass rates and scores. Candidates love to guess and second guess the pass rate and minimum passing score (MPS) on the exams.
I was ready to post the script from a recent forum post I had read (even changed the names to protect the innocent), but decided to avoid a lawsuit from calling someone an idgit. You’ve all seen the posts. One guy says the pass rates have been between 35-40% and another interprets that to mean that a score of 35-40% will pass the exam. Still other posters asking questions like, “If I get 70% on half of the test but only 40% on the other half, will I pass?” My answer is that if you cannot do this kind of math yourself then you better look to another career.
Full disclosure: When I was a candidate for the first exam, I looked up the information on the MPS and pass rates. It would seem to be important stuff that you would want to know. No problem, but do not spend more than five minutes because you need to spend your time studying the curriculum.
From the CFA Institute website at http://www.cfainstitute.org/cfaprogram/exams/Pages/cfa_exam_results.aspx
The minimum passing score (MPS) for each level of the exam is determined by the CFA Institute Board of Governors each year after the administration of the exams. Neither the MPS nor individual candidate scores have ever been released. To set the MPS before the administration of the exams would require that an absolute standard be applied without regard to the difficulty of the exams; this could potentially be very unfair to candidates, especially across time.
The score matrix provided on the exam results is an indicator of overall performance and cannot be used to determine approximate scores or pass/fail status. The “≤50%” range is considered poor; “51%–70%” is considered poor to average; “>70%” is considered average to above average.
There you have it, “neither the MPS nor individual candidate scores have ever been released,” (or ever will be). Stop asking. The link above also includes two documents, “Guiding Principles for Setting the CFA Examination Minimum Passing Score” and “Learn more about the minimum passing score and how exams are graded”. I didn’t bother to look at the docs, because IT DOES NOT MATTER!
Why does the minutiae to which candidates go to learn the MPS not matter? Let’s look at the grading range.
- A score below 50% is considered poor. DUH! When was the last time you could pass a test by knowing less than half of the material? How valuable do you think the designation would be if candidates could pass with less than 50% correct? There is another level that corresponds to this score, F!
- A score of 51%-70% is considered poor to average, and means you will probably fail the exam. Now I will admit that a 70% on a grueling six-hour test-a-thon is approaching a decent grasp of the material, especially given the detail and breadth of the curriculum. The range still corresponds to a D on a letter-grade system however, and that just isn’t good enough for squat unless your daddy was a rich oil tycoon (if this describes you, I suggest you go into politics and forget about the CFA).
- A score above 70% is considered average to above average, and means you will ALWAYS pass the exam. There it is, plain as day and nothing to interpret, get a C or better and you will pass the CFA exams.
Now, the pass rates on the exams. These have ranged from ‘You have a pulse and can pay dues, good. You’re a member’ (95%) to ‘better luck next year’ (32%). The sweet spot over the last decade has been around 40%. The thing is, the pass rates really don’t matter either. Does it matter whether a third or half of the candidates score better than 70%? That C or better is your hurdle, and it’s really not that high if you put the time in to learn the material.
The morale of the story, if there is one beyond my need to vent, is that the exam itself is not as important as the curriculum. Spend an hour or two looking over exam policies, format, scoring, etc. but you need to limit this ‘meta-studying’. Most of the information you need is fairly clear and easily searchable. Learning the curriculum is the surest and quickest way to passing the exam, no passing rate or scoring calculations required.
Anyway, chin up! Only three more days and you can start studying for next year’s exam!
Good luck on Saturday.
Joseph Hogue, CFA