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Article on 46% Pass Rate

http://news.efinancialcareers.co.uk/newsandviews_item/newsItemId-20473

A brief investigation into the mysterious increase in the CFA pass rate
30 July 2009

Sarah Butcher

As we’ve mentioned before, CFA exams are not very easy. More people fail than pass them. This year, however, the balance has shifted in favour of passers.

Bloomberg notes that 46% passed the CFA Level 1 this year, up from a bleakly depressing 35% in 2008.

Does this mean the CFA is now akin to the A level or level one clarinet? No. the CFA Institute points out that the long term average pass rate for Level 1 is 45%, suggesting last year was the anomaly. It also offers various explanations for this year’s rise, chief among them being the fact that students are keener than they used to be.

“We experienced much lower no-show rates at level I this June relative to the past 10 years. This indicates to me that the candidates enrolled are very serious about the exam,” says a spokesman in the UK.

Last year’s retakes may also be a contributory factor. So may the geographic distribution of candidates: Europeans have a greater tendency to pass.

Suggestions of dumbing down are refuted by the CFA’s enormously complicated standard setting procedure. The pass rate varies year on year and is determined using the ‘Angoff method,’ described as follows:

This method involves a large and diverse group of CFA charterholders. The lead psychometrician divides participants into two smaller groups for each level of the examinations. Each participant reviews the entire examination question by question and makes an independent judgment on the expected performance of a just-competent candidate on each question on the examination.

Participants review the entire examination a second time after briefly viewing general impact data and overall actual candidate performance on the exam. In the second round, each participant again records his/her judgment as to the expected performance of a just-competent candidate on each question.

In this way, both difficulty of the examination content and actual candidate performance are considered. The workshops result in MPS recommendations that equate to competence in the subject matter from the perspective of demographically representative groups of charterholders. The size of the group, its diversity, and its reliance on independent judgments contribute to the power of standard setting results.

Longer term, the Institute seems to be expecting pass rates to fall, which is not entirely surprising as candidate numbers seem to keep rising all the time.

You’re ready to take on the CFA® Program, so stop guessing where you should begin. You give us your study dates, we’ll give you the study plan. Our adaptive activity feed breaks down your 300 hours into bite-sized weekly tasks that fit into your life.

I disagree with some things here. I know people who knew much less than I did when I took the 2008 test, and still passed. 2 were on the cutoff, if pass rate was 35% not 46%, they definitely would have failed.

Maybe there was a lower no-show percent. But no way that’s additional 11%. The economy was equally as horrible in December 08 as June 09. There’s no way two massive groups of people 6months apart yield a 11% pass rate gap.

And that other claim about the “long term pass rate = 45%” includes REALLY long term when pass rates were 70-80%, and the exam was much easier and contained far fewer topics.

Why not just admit the truth?
“We boosted the pass rate to gain more publicity for the designation, and once you pass Level 1 thinking it’s easy, you keep paying us and buying our books over and over again. But no worries, we’ll make sure the designation isn’t diluted by pummeling L2 or L3 takers.”

Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength, and greatest weakness.

Haha that’s an interesting take on it iteracom.

Why do Europeans have a greater tendency to pass?

Post37, I guess this is reflective of level of hardships in life. In general, Harder the life more the desperateness and higher the desire and effort level for achievements.

Wait till this program gains popularity in Asia !!

rus1bus
no, we are just smarter!!! (a joke)

and keep in mind most europeans are taking the exam in a foreign language.

Taniamadrid, i know you are smart. In another thread you mentioned you passed L1 just by watching videos ! Hats off to you!

rus1bus Wrote:
——————————————————-
> Taniamadrid, i know you are smart. In another
> thread you mentioned you passed L1 just by
> watching videos ! Hats off to you!

+1

Soddy1979, CFA

Now I am thinking to buy their audio (somebody reading the book to you), it’s more time-efficient. Just put on your head-phones when you go to sleep, and enjoy…

yea, well I passed using osmosis.

iteracom Wrote:
——————————————————-
> I disagree with some things here. I know people
> who knew much less than I did when I took the 2008
> test, and still passed. 2 were on the cutoff, if
> pass rate was 35% not 46%, they definitely would
> have failed….

The number of people who pass determine the pass rate, not the other way around…

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"Better to remain silent and be thought a fool than to speak out and remove all doubt" - A. Lincoln