Pretty optimistic - 58%

I’m with LGF… considering the pass rate was so low last year there will be a lot more retakers this year. I’ll go with 55%.

50% on the nose. Heads or tails?

We would be crazy to believe that CFAI is not planning for a downwards drifting pass rate over time (provided that more and more people keep signing up for these exams, of course). CFAI does not operate altruistically for the benefit of the investment profession - they are concerned with maximizing the CFA charter’s prestige, which is inseparable from exclusivity. As a rudimentary, unscientific approach, I would take the average decline in pass rates over the past few years, subtract that from last year’s pass rate, and add a 2% or so buffer on either side of that.

i like your logic, ohai!

i like the idea, but as a candidate, i don’t like it

likely 2-3% less than 2009

The MPS looks too high to candidates and too low to charter holders. If that’s not frame dependence, I don’t know what is.

I’ll go contrary and say that it is going to be slightly higher than last year. I think the low pass rates over the last few years have effectively scared candidates into being more dilligent in studying. And since we are naming psychological traps, that is pure projection by me.

With each post I feel better about my prediction.

maratikus Wrote: ------------------------------------------------------- > With each post I feel better about my prediction. The only properly calibrated analyst in the bunch.

how many behavioral biases in this thread? i count a few…

0%-100%

58%

artvandalay Wrote: ------------------------------------------------------- > 0%-100% What is your margin of error?

CPierce Wrote: ------------------------------------------------------- > artvandalay Wrote: > -------------------------------------------------- > ----- > > 0%-100% > > > What is your margin of error? Margin of error of plus or minus 200%

I would say around ~60% Reasoning; look at the last three year cycles, cumulative pass rate. For example 2007 Lvl 1, 2008 Lvl 2, 2009 Lvl 3 pass rates. Multiply these and you get the percentage of people who made it through, assuming they passed on the first attempt. For 2005 L1, 2006 L2, 2007 L3; 8.40% For 2006 L1, 2007 L2, 2008 L3; 8.48% For 2007 L1, 2008 L2, 2009 L3; 8.79% If you accept the argument that CFAI limits pass rates to reflect an 8-9% cumulative pass rate which is apparent over the last 5 years, then take my cohort; 2008 L1: 35% pass 2009 L2: 41% pass Then take the average cumulative pass rate over the last 5 years (8.56%), divided by the factor of last two years pass rates to compute the 2010 L3 pass rate. 2010 L3 pass rate = (.0856)/[(.41)*(.35)]=59.6% There’s reason to be optimistic ladies and gentlemen!!

FinanceMBA2011 Wrote: ------------------------------------------------------- > I would say around ~60% > > Reasoning; look at the last three year cycles, > cumulative pass rate. > > For example 2007 Lvl 1, 2008 Lvl 2, 2009 Lvl 3 > pass rates. Multiply these and you get the > percentage of people who made it through, assuming > they passed on the first attempt. > > For 2005 L1, 2006 L2, 2007 L3; 8.40% > For 2006 L1, 2007 L2, 2008 L3; 8.48% > For 2007 L1, 2008 L2, 2009 L3; 8.79% > > If you accept the argument that CFAI limits pass > rates to reflect an 8-9% cumulative pass rate > which is apparent over the last 5 years, then take > my cohort; > > 2008 L1: 35% pass > 2009 L2: 41% pass > > Then take the average cumulative pass rate over > the last 5 years (8.56%), divided by the factor of > last two years pass rates to compute the 2010 L3 > pass rate. > > 2010 L3 pass rate = (.0856)/[(.41)*(.35)]=59.6% > > There’s reason to be optimistic ladies and > gentlemen!! Your math is incorrect, but i like the thought.

What’s wrong with the calculation? I think he’s just saying that 59.6%*41%*35% equals the 5 year average rate. Granted I think he is being very creative in his logic here, but the sums themselves are ok I think. Do we have any evidence to suggest that the CFA actually looks at this metric? Leaving that minor detail aside, the thought of a 60% pass rate makes me feel happy inside, so I am going to give this post a stamp of approval!

Graph of pass rates from 1963 - 2008 http://img251.imageshack.us/img251/8982/passrate.gif taken from this paper by the CFAI, which gives a nice summary of how the program has changed over time: https://www.cfainstitute.org/cfaprogram/Documents/the_cfa_program_our_fifth_decade.pdf What I think is really interesting is how they explain why the pass rates have consistently dropped: “Falling pass rates over time reflect, among other things, the expansion of the candidate pool, candidate aptitude, and candidate preparation habits.” No mention whatsoever of the test being made more difficult to protect existing charterholders or the test being expanded to cover a larger and larger range of subjects, which is the common excuse people make in the real world. I guess if they said such a thing in writing, then it would support the idea that people who got the CFA charter in the past didn’t have to learn as much or work as hard as people getting it now, and we all know that’s simply not true. In addition, we all (should) know that everyone is specifically disallowed by the code of ethics from making any statement to that effect, regardless of what evidence they present to justify such a claim. Indeed, the only possible explanation for the fact that over 90% of the applicants passed the test in the 1960s must be that the first CFA candidates were the absolute elite geniuses of finance, and since then, everyone else has been progressively dumber and lazier. All this about the test getting harder over the years is complete hogwash.