I don’t think it matters what the pass rate is. Schweser (or is it the CFAI) advises you to practice with a 70% minimum overall score in mind. If you really actually do that, it doesn’t matter what the pass rate might turn out. Plus, if you are enrolling for an exam with the hope that you make it courtesy of the pass rate, then you need to get a real life, because you most probably will get the charter through less ethical means if you are opportune. This is not to diss those who genuinely work out on this monster with a hope to pass and get the undesirable outcome, however…This pass rate thing is def not cast in stone in any case, and given the varying abilities of human man, it remains that exams are not necessarily a true test of (also IB)abilities, rather, it is more a test of one’s dogged commitment to figure out what works…
I think people need to accept that 50% is the new reality for this test. Even if you say that there are more young, inexperienced people and candidates from outside the industry than previously, I think the reality is that the program and especially Level 3 are harder than they used to be. So be it. That’s the challenge and that’s the reward to anyone who finishes. What I think is the valid question in the initial comments on this thread is why the pass rates are inconsistent. I used to think that 65% was normal and 2005 was the outlier. The new reality (it seems) is that 50% is normal and 2006 was the outlier. What I believe is unacceptible is to have the pass rate swing by 25 pp from year to year because the next thing you know people will try to say, “By the way, I passed Level 3 in 2008 when the pass rate was 53%, not like so and so who could only do it in 2006.” To that extent, let’s hope for the sake of the program’s quality that 50% is the new reality and that it stays that way.
omoobagberume Wrote: ------------------------------------------------------- > I don’t think it matters what the pass rate is. > Schweser (or is it the CFAI) advises you to > practice with a 70% minimum overall score in mind. > If you really actually do that, it doesn’t matter > what the pass rate might turn out. Plus, if you > are enrolling for an exam with the hope that you > make it courtesy of the pass rate, then you need > to get a real life, because you most probably will > get the charter through less ethical means if you > are opportune. This is not to diss those who > genuinely work out on this monster with a hope to > pass and get the undesirable outcome, > however…This pass rate thing is def not cast in > stone in any case, and given the varying abilities > of human man, it remains that exams are not > necessarily a true test of (also IB)abilities, > rather, it is more a test of one’s dogged > commitment to figure out what works… ================================== hit the nail on the head
You are probably right to a certain extent that the pass rate doesn’t matter, but if it jumped to 80% for Level 1, all of us who passed the exams would be complaining. More people are taking the exams every year, therefore there is more fat trying to get through the system. Lower pass rates remove this fat to produce real lean, mean CFA Charterholders!!!
I think the dynamic CBOK (as in reviewed every year) takes care of the the fat…Take note that since the size of L1 candidates increases exponentially every year, a falling/constant pass rate is already taking care of both the ease of moving to and the number of people who move to L2…and L2 is a whole new ball game, ditto for L3…the de-fatting process is continuous at every Level, but like earlier said, this also has its victims…
The higher you go, the coller it becomes. Before I got my MSc Finance and Investment, I was all over it thinking “i will learn a whole lot new”. It wasnt really. Registred for CFA thinking maybe thats where all the “unknowns” are. And after passing it in 2009 maybe I will go for a PhD. Maybe there is no more new things to invent.
I think this discussion is interesting as it demonstrates the inherent biases emanating from different perspetives. Some passers, like equity_research_nds and legend, now are advocating lower rates. I doubt they’d have the same view if they still needed to write additional exams to obtain their charter. Fact is, the exams are very tough and the individuals writing them are for the most part, of well-above average intelligence (particularly for those writing L3, since they had to pass L2 to get there). We all want to obtain the charter but we all realize that the pass rates can’t be too high, otherwise the value of the charter would diminish. Right now, people value the CFA charter very highly just because it’s so difficult to pass: above the CPA and in Canada, on par of above the CA designation. So I personally think the pass rates right now are in their sweet spot; and because the number of candidates writing the exam per year are now at historical highs and likely to stay at around these levels, I don’t think we’ll see much variance from the current pass rate range. I don’t think we should have wild swings from year to year (like the 32% to 56% jump in LII rates from 04-05; or 76% to 50% swing from 06-07 LIII), as with such a large sample size, it’s statistically impossible for the “quality” of candidates to shift that much from one period to another. A problem CFAI could face if pass rates were to decrease further would be the emergence of a competing designation to try to sweep up disgruntled individuals who didn’t pass. Even now, only 8% of those writing the exam go 3/3, and this is among highly-motivated university graduates, who are likely in the top 20-25 percentile of IQ. So, my view is that rates should stabilize as follows: LI : 35-45% LII : 40-50% LIII: 50-60% Now this is all within the context of a once-per-year sitting for LII and LIII. If the exams would eventually be offered twice a year, a somewhat lower pass rate would be justified.
*yawn*. Most of you have missed the point and show a poor understanding of both statistics and the value of the charter. But, whatever…
OK… lets compromise: (1) For new entrants: Lower passing rates. (2) For CFA charter holders: Must take and pass special exams every five years to retain their charters. These especial exams would cover any topics that have been added to CBOK over the preceding five years. This would be equitable solution to maintain the value of the Charter. And it would be my sweet revenge against all those old dawdlers who passed the exam in 1980s and who told me it is really easy.
CFAAtlanta Wrote: ------------------------------------------------------- > OK… lets compromise: > > (1) For new entrants: Lower passing rates. > (2) For CFA charter holders: Must take and pass > special exams every five years to retain their > charters. These especial exams would cover any > topics that have been added to CBOK over the > preceding five years. > > This would be equitable solution to maintain the > value of the Charter. And it would be my sweet > revenge against all those old dawdlers who passed > the exam in 1980s and who told me it is really > easy. ================================================== “(2) For CFA charter holders: Must take and pass > special exams every five years to retain their > charters. These especial exams would cover any > topics that have been added to CBOK over the > preceding five years” not a bad idea at all!!!
Worst idea ever
ValueAddict Wrote: ------------------------------------------------------- > Worst idea ever ======================== why do you think so? Lets say someone who took the test in 1990s would not have studied CMO’s etc so it would be a great platform for them to upgrade their knowledge, obviously the test would be different from those who pass L2 but it would a basic test of the concepts which have recently evolved in finance it could work , just my 2 cents on it
CFA_IND Wrote: ------------------------------------------------------- > ValueAddict Wrote: > -------------------------------------------------- > ----- > > Worst idea ever > > > ======================== > > why do you think so? > Lets say someone who took the test in 1990s would > not have studied CMO’s etc so it would be a great > platform for them to upgrade their knowledge, > obviously the test would be different from those > who pass L2 but it would a basic test of the > concepts which have recently evolved in finance, the idea would not be to compete for the charter ( or being on the right side of the MPS) , it could be an open book test > > it could work , just my 2 cents on it
I think continuing education is a good idea in general…But to mandate a one-size fits all approach is not the answer. Who can even say that all the material covered by the CFA Program is useful. Its all perspective. What if I took the test in the 90’s and don’t give a rats @$$ about CMOs because a.) I run an equity portfolio or b.) I think the product is bogus (just another fancy way for Wall Street to dress up an old product to collect fees by offering no benefit whatsoever) I have other priorities/endeavours that I want to accomplish that do not include studying for another series of CFAI exams (even if it is open book). So if you want to study more by all means go for it. I’ll learn something more relevant to my passion. To each his own.
Even after passing all levels, I still feel pass rates should be higher for Level 3. I say make Level 1 pass rates lower to keep just about anyone related to finance from giving the exam. However after passing Level 1, and demonstrating an interest in the program, make it a little easier. or atleast practical. 2008 Level 3’s morning session was a joke. I could not even get to the last few questions (and have heard the same complaint from about everyone who gave the exam). That is no test of knowledge. On the other topic - difference between CFA and MBA (from a view point of someone who has both): CFA helps me do my job. Lessons learnt while doing my MBA might help me get to the top. No wonder organizations care more about MBA than CFA. I know I do.
Having to take more exams is just dumb. Now that I have passed all three exams, the only evaluator of my skills and knowledge is the market. I intend to dedicate the rest of my life to making money. Achieving the CFA charter was just a means to an end ie demonstrate a minimum level of knowledge. I have demonstrated that minimum level of knowledge, now to the more important things in life: MAKING LOTS OF MONEY