Jeff Diermeier says that CFA pass rates are like ups and downs of the markets… “The CFA exam pass rates are much like the ups and downs of the markets. In 2004, we hit an aggregate low of 40 percent; in 2005 they moved back up to 48 percent; in 2006 they increased to 52 percent; and this year they dipped to 42 percent. As to how the different levels broke down: The pass rate for Level I held steady at 40 percent compared with 2006; the Level II pass rate was also 40 percent (down from 48 percent in 2006); and the Level III pass rate saw the most significant decline at 50 percent (down from 76 percent in 2006). Since the first exam was given in 1963, the average historical pass rates are 46 percent for Level I, 51 percent for Level II, and 67 percent for Level III.”
I can understand why markets move up and down but i cannot understand how the level of preparedness of candidates can vary so much across the cohort years. Are candidates less smart in some years than other years?
Of course, it doesn’t make any sense that the candidate pool varies nearly as much as the passing rate. It’s the Angoff method they use to determine the passing score. We discussed this here: http://www.analystforum.com/phorums/read.php?1,601563,601969#msg-601969
I wholeheartedly subscribe to the theory that CFAI will “prove” that their own study materials are superior by juicing up pass rates next year. There has never been a better year to pass!
Gooman, I’m with you!!!
I think it’s what Stalla said… Some years the CFA graders go a little easier (human nature) and pass rates shoot up. The next year they are told to grade a little harder and rates shoot down… They don’t intend for it to vary so much, just the graders are human
well i have feeling the CFAI wont drastically improve the pass rate in 2008… i spoke with some ppl who passed L3 this year, and they told me that if they were to mark next year they would be really tough on the candidates … simply because they dont want a lot more charterholders … that said, it is true that CFAI is forcing selling its own books but instead of increasing the pass rate to 76% (as they did back in 2006), i think they will keep it in the 55-60% range going forward to demonstrate reasonable difficulty in L3 exam and to stablise the pass % given the heavy criticism they have received this year in terms of oscillating pass rates… finally, the difference between AM and PM scores is huge in the L3 exam…so either they will increase scores in the AM or make PM much harder than previous years to bring both of the scores more closer to each other… needless to say, given above uncertainties and obscure grading process, i dont have a great feeling about 2008…