I am tired of seeing those threads where AFers are picking numbers from air and suggesting them as the pass rate for 2010 LIII exam which in my opinion is now well over due…try telling that to CFAI! Anyway, if you are on this forum, you should know better than guesstimate!!! CFA ia about rigour of analysis. You should focus and produce a number that has reasonable and adequate basis such as the one below; 1. Total number of retakers (failed in 2009): 9,839 2. Total number of 2009 LII passers: 15,892 3. Total number of candidates eligible for 2010 LIII exam: 25,731 less adjustment factor of 10% for those abstaining from the exam (this is determined by historical trend) 4. Total number of candidates who sat for 2010 LIII exam: 23,158 (20% growth over 2009) … 5. Recent three year average number of candidates passing: 7,905 6. Total number of candidates who passed 2009 LIII: 9,597 (24% growth over 2008) 7. Total number of candidates who passed 2009 LIII: 7,720 (21% growth over 2007) Estimation method 1 (best case): Using 22% as the average growth rate of candidates passing -last 2 years- (which is reasonable to use as it has more closely mimicked growth in candidates taking the exam) and applying this to the number of candidates who passed LIII in 2009 you get 11,708 as the predicted number of candidates passing in 2010, versus the 23,158 candidates that sat the exam, gives you a pass rate of 50% for 2010 (compared to 49% in 2009). Estimation method 2 (worst case): Using the 3 year average of 7,905 as the number of candidates passing 2010 LIII, versus the 23,158 candidates that sat the exam, pass rate is 34% for 2010. If you apply this methods to the 2010 LII results, it gives you a rough picture of why pass rate fell from 49% in 2009 to 39% in 2010. I get the sense that you should not expect to see wild growth rates (say 40%) in the number of candidates passing LIII as the CFAI board expects this to continue to remain fairly exclusive.
probably the best analysis i’ve seen on this board. thanks for sharing. posts like this make AF and internet great.
As the questions for discussion: do you think that retakers have a better/worse/same chance to pass as first timers do? (with obvious impact on model estimates)
It will be between the best and worst case - 45%
but how do you explain years where pass rates increased?
I guess you are referring to 2006 when pass rate was 76%? i.e a total of 12,314 candidates passed (double the 2005 number of candidates who passed in 2005 and the highest number of candidates passing LIII in CFAI’s history). In 2007, the number of candidates passing LIII dropped back to the 6,399. REASON: well if you remember right, that was the year CFAI celebrated its 60th anniversary and at the same time coinciding with 60,000 charter holders that CFAI had so the pass rate must have been significantly lowered to shore up the number of people qualifying for the charter to 60,000 in that anniversary year. Well simply put, you could wait for the next major milestone…100th anniversary and hope they do the same. Unfortunately, there will be no coincidence this time as we are just closing in to about 100,000 charterholders!!
yea its freaky. Every year the number of charters increase by several thousand. And there are double the # of candidates in the program then there are charter holders…
Interesting analysis. I can say the pass rate will definitely be below last year based on pass rates decreasing for all levels 1 & 2 this year and the fact that a lot of candidates left questions unanswered in the morning. I can make a reasonable argument for pass rate in 2011 to be above 65%: If you look at the trend of pass rates for Level 3 you will notice that in the last ten years, there have been two instances where L3 pass rate has jumped and then come back down. It happened in 2001 and then 2006 (source: http://www.cfainstitute.org/cfaprogram/Documents/1963_current_candidate_exam_results.pdf) Now, since the curriculum essentially did not change for 2011 and the pass rate for 2010 is going to be pretty low (increasing the number of retakers), I expect pass rate in 2011 to rocket upward to above >65%
how is this estimate better than any other? they’re all based on representativeness (i think that’s the right L3 buzzword).
Also it depends on how many LII candidates will register for 2011 LIII exam, this year waiting period between LII results and LIII results issuance could be the answer for LIII borderline people .