Can anyone please shed me some light regarding how CFA grading works. It is obvious no one has clear answer but more often I come across comments such as “for level I and II it is all about FRA and ethics.” It kind of confuses me since we know that relative section weights are more or less close, without any section sticking out so much by weight.
It looks like despite the fact that weights are transparent, importance of sections such as FRA and ethics is greater than for other sections. Could you please explain this to me.
p.s. are there other sections for L1 and L2 that are “more important”
As far as I know, “Ethics” was always the most important part for L1. I can be wrong but “Ethics” may give you some additional points if you are somewhere at the edge between “FAIL” and “PASS”.
Relative section weights are not more or less close. FR&A occupies 20% of the exam, Ethics takes up 15%. Meanwhile portfolio management, derivatives and alternative investments take up 7%, 5% and 4% of the exam respectively. That’s a large disparity, you could not even know what a derivative is and still pass the exam relatively easy if you’re strong in the other topics. The same can’t be said for not knowing accounting.
When people say it’s all about FRA and ethics it’s because they’re the largest sections and are often two of the most difficult for candidates to grasp.
Ethics can push you to pass if you’re teetering on the edge while no other section has that capability.
The questions also aren’t weighted. FRA question #45 isn’t worth twice as much as Alt question #89 or whatever, it’s just that there are more FRA questions than Alt.
Each question is worth one point, regardless of the topic.
Your point understandable but although FRA has 4-5 times greater weight than some other sections it is still only about 20% of total exam. FRA and Ethics are 35% combined, meaning that a person really needs to do well in other sections in order to pass.
To me it sound like the best approach is to try to get 70% in each section and not worry to much this or that section in particular. As far as I understood you really need to have all sections covered in order to move on to next level as focusing so much on two sections is not going to cut it. Surely, you do not want to bomb FRA & Ethics sections but as far as I understood CFA is really about everything. That is why people`s approach confuses me sometimes.
FRA is certainly the bellwether of the exam: folks who do well on FRA (and ethics) generally pass the exam. Those who don’t, generally fail.
It’s really hard to bomb (like 20% right) FRA and still pass but it’s possible. For instance:
You can pass with Financial Reporting and Analysis under 50%, Economics and Portfolio Management over 70%, and everything else (seven other subjects) between 51% and 70%.
You can pass with less than 50% in Quantitative Methods, Derivatives, Financial Reporting and Analysis, as long as you have more than 70% in Economics, Quantitative Methods, and Equity Instruments, and 51% to 70% in Corporate Finance, Ethical and Professional Standards, Fixed Income, and Portfolio Management.
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