meaning of MPS

CFA Level III
#21

A score of 64 can border 63 the same way that 62 can border 63…Their explanation seems pretty clear in that they explicitly state an Ethics adjustment can have a negative or positive impact on a candidate’s results.

Using logic, we can say that a positive impact would be moving from barely failing to passing. Similarly, a negative impact must be moving from barely passing to failing. A “negative impact” wouldn’t make sense for barely failing to failing even more, because the candidate failed either way.

Additionally, if the adjustment was only to boost someone over the MPS (failing to passing), they would likely say this is the case-- that an Ethics adjustment can only help a candidate.

I might have missed it somewhere, but there could also be a range of “indeterminate” scores. In other words, below the range, you surely failed. If your score is above the range, you surely passed. If you scored in the range, then your Ethics score will be more heavily considered.

#22

Great post

#23

And to tie this to the original question, the MPS could be 62%, 63%, or 64%, depending on how CFA Institute defines it. Any one of those three is defensible, as long as the MPS is so defined.

#24

Many thanks, sir!

#25

Regarding the MPS my understanding is based on the advice I received from the CFA trainer, the charter holder who preps around 140 people yearly across all 3 levels…

anyhoo my view may be different but the logic is that if you are beyond the MPS score than you pass no matter what the ethics score you got !

#26

Confirmation bias at its finest.

#27

Good arguments, and there is truth somewhere that borders.

#28

I understand your view. I’m simply saying that that may not be the view that CFA Institute holds when they defint the MPS.

And, for the record, I’m a charterholder who preps several hundred people yearly across all three levels, develops curriculum materials, and have done so for over 10 years now.

#29

There is no maybe, nor any argument. There are factual statements made by the exam issuer, CFA Institute, and illogical statements made by a test taker. I can’t believe this is even a conversation amongst analysts, or wannabe analysts.

#30

+1

#31

1.Assemble Subject Matter Experts: The Angoff Method requires the input of subject matter experts in order to set a given standard. Some key points from the CFAI demonstrate the first step of the process. _ " __ Another quality control during this period is the investigation of all comments and complaints related to the examinations." _ Any of you remember filling out a survey or being asked about your opinion on a given question? No, of course not, we’re just candidates, which means that the comments and complaints are being provided by their subject matter experts during the first step of the Angoff Method.

  1. Round One of Grading: The Angoff Method’s premise is that with a sufficient number subject matter experts, a uniform decision on _ what makes a minimally competent candidate can be discerned with enough iterations of "grading rounds _." The rounds change slightly from one to the next, and based on what was mentioned previously, it seems likely that the first round of grading is to figure out which questions fall into one of these categories. _ " __ Special focus is given to reviews under any of the following circumstances: multiple similar complaints, exam results suggesting more than one correct answer, or exam results that otherwise suggest that a question was confusing or unfair." _ If I had to guess, I’d say that this step is what makes the CFAI’s method a “modified Angoff Method” as opposed to simply an “Angoff Method”. Don’t quote me, this is just a guess. But, good news everyone, if you thought there were some questions on the exam that were totally unfair, don’t worry, the CFAI states explicitly:

"If, after investigation, a question is determined to be confusing or unfair, results are adjusted to credit all answers. If more than one answer was correct, then all correct answers are credited."

3.** Round Two of Grading:** After round one, we’re now working within the traditional methodology of the Angoff Method. This is noted by the CFAI, which states:

"Each participant reviews the entire examination, question by question, and makes an independent judgment on the expected performance of a just-competent candidate on each question on the examination" … The data is then collected and compiled and averages are calculated for each question, resulting in a probability for each and every question found on the exam. For example, if every question is assigned a probability of 70%, meaning that a minimally competent candidate has a 70% chance of getting the question correct, then the passing score recommendation for the round is 70%. Obviously, it’s a little more varied than that, but the process is the same.

4.** Round Three, Four, Five,… , Whatever of Grading:** Herein lies the bulk of the process found within the Angoff Method. After each round of grading, new information is provided to the subject matter experts, and the process begins anew utilizing the new information. The most common type of information that is provided to subject matter experts is what is known as “impact data”. The CFAI explicitly states that they do, in fact, provide impact data to those doing the grading:

“Participants review the entire examination a second time after reviewing general impact data and overall actual candidate performance on the exam”

  1. But, of course, the CFAI is a little coy with the details about what “general impact data” actually represents. Typically, impact data is the percentage of candidates who would pass based on the previous round’s median or average passing score recommendation. So, if in the previous round, the score recommendation ended up being, let’s say, 65%, the impact data associated with this recommendation would be the percentage of candidates who would have passed had the final recommendation been 65%. Or, put more simply, in the above quote, replace the word “and” with “which is” (I have no idea why they wrote it the way they did). This process may be repeated as many times as necessary to arrive at a consensus recommendation. Once a consensus is reached, the recommendation is sent up to the CFA Institute Board of Governors who then sets the MPS based on this recommendation. If I had to guess, I doubt the board significantly changes the recommendation, if at all.

From a high level, this is how the CFA exams are graded. So, if someone tries to tell you that the MPS is 70% of the top 1% of scores, they’re wrong. Maybe that’s how they used to do it, but it isn’t done that way anymore. Also, this should clear up why it takes so damn long to grade the exams!

Now that everyone is armed with the knowledge of how their exam is being graded, I hope we can all return to not caring about the CFA results until August!!

#32

This is precisely why I’m unsure why so many candidates don’t read the Institute’s comments on these topics. Even when the Institute leaves the idea bit vague, people are still claiming there is one MPS value for the whole exam level (and it’s never at or above 70%, etc.). All of these contentions are unsubstantiated, and the Institute’s word is what matters instead of anyone else’s speculation. If they’re vague (and they have every right to be), then you’re probably never going to figure out exactly how things are done. The best solution is to study to learn and do so very well. Trying “just to pass” will likely land you in the same exam one year later…

As an aside, and a little contrary to your analyst statement, aren’t analysts supposed to draw conclusions from limited information while recognizing a degree of uncertainty in their results? If this weren’t the case (i.e. they have certainty), wouldn’t more people be rich from analyst opinions? But, I do agree with you about the (endless) discussions about the MPS-- don’t act like an opinion supersedes the Institute’s comments on a topic (we don’t have much information to make a strong argument for some/most of these things)…

#33

If I ask you the following : do you for a fact know how the ethics adjustment works ?

the question would be similar to : can you with outmost certainty tell us how the MPS is calculated ?

if you can’t answer than perhaps you have your answer why the conjectures are being made in this forum.

One more thing is : if you are an analyst you don’t take things at its face value, and always challenge them !

#34

Really hope not be in this forum in 2 month time, though others might still see you :slight_smile:

Mid Aug would put it at rest.

#35

Yes, I know for a fact how the ethics adjustment works. CFA Institute gave clear, unambigous, albeit not complete, guidance on the ethics adjustment. Their statement clearly states that within a band around the MPS (minimum passing score), which is normally the cutoff for fail/pass grades, an ethics adjustment is introduced as a constraint, which can positively affect candidates with failing scores, and negatively affect candidates with passing scores. I don’t know anything else, but I do know for a FACT, that the ethics adjustment can and will both negatively and positively affect candidates performance on the exam, the main argument towards the latter end of this discussion thread.

No, I have zero clue how the MPS is calculated, and I do not care to discuss a fruitless topic with limited guidance and no direct bearing on the ethics adjustment argument.

When you are an analyst, you challenge opinion, forecasts and views. You do not challenge clearly stated facts. You don’t say, “Well, although XOM said Revenue was X, and they recognized Y early, I think they are lying”. You consider XOM’s revenue number to be a fact. You “analyze” and contemplate future revenue growth, etc. As an analyst, you don’t take XOM’s CEO’s future growth forecasts at face value, you challenge them.

#36

You studied/conversed with a tutor whose words/information supersede all guidance given by the exam issuer, the CFA Institute.

You have the highly sought out edge! You are a winner! Of course we won’t be seeing you here!

#37

We all know it works but you didn’t answer the question how it works !

Then in your own example of XOM you referenced the X and Y numbers right ? Than where in the CFAI extract you see any reference for the fact ? Not that I doubt it but just challenging your view on what “borders” means !

I think if MPS is 10 for example and you got 11 there will be no ethics adjustment since you are beyond the MPS point and if you got 9 than there will be an ethics adjustment positive or negative and your view is that if you got 11 and the MPS is 10 than you can fail if you did poorly in ethics.

just a thought : why CFAI institute would punish the folks who already crossed so called MPS ?

Lastly lets read it again

The rule is:

“The Board of Governors instituted a policy to place particular emphasis on ethics. Starting with the 1996 exams, the performance on the ethics section became a factor in the pass/fail decision for candidates whose total scores BORDERED the minimum passing score. The ethics adjustment can have a POSITIVE OR NEGATIVE impact on these candidates’ final results.

CFA Institute has a policy of not releasing either the minimum passing score or individual candidate scores. Consequently, CFA Institute does not release specific information about the ethics adjustment or the candidates who were affected. The adjustment has had a net positive effect on candidate scores (and thus pass rates) in most exam sessions. The published pass rates always take into account the ethics adjustment for borderline candidates.”

Source: CFA Institute

Very simple and straightfoward.

#38

CFAI would probably wanna keep it simple

  1. Set passing score (for example 240 points)

  2. everyone above passes, below fails

  3. those that score exactly 240 points gets Ethics adjustments (8/12 or better pass, otherwise fail)

Regardless, you goal is to score as many points as possible in 6 hours. Everything else is a distraction.

#39

It is too difficult to have an argument with someone that neither speaks/writes nor understands the English language properly, so this is it for me.

I explained exactly how it works, as it is known to candidates. The band, what ethics score is deemed “failing”, the MPS and other specifics are unkowns and irrelevant to my argument.

____

I see the fact that a passing score based on MPS can become a failing score because of ethics implicitly/explicitly mentioned three times:

  1. the performance on the ethics section became a factor in the pass/fail decision for candidates whose total scores BORDERED the minimum passing score.

  2. The ethics adjustment can have a POSITIVE OR NEGATIVE impact on these candidates’ FINAL RESULTS.

  3. The adjustment has had a net positive effect on candidate scores (and thus pass rates) in most exam sessions.

_____

Border is an English word meaning: “the part or edge of a surface or area that forms its outer boundary.”

Just like a country has borders completely surrounding it.

____

Just so we are clear:

What is a negative adjustment (on a candidate’s FINAL RESULTS) to an already failing score? (i.e. a score of 9, with an MPS of 10).

The only other logical explanation is that a candidate’s band can drop lower. However, bands were only added to test scores recently, and definitely after 1996, making that argument fall flat on its face.

____

Lol CFA Institute would punish candidates that already crossed the so called MPS because they performed poorly on ethics, hence the “Ethics Adjustment”, and ethics constraint on the MPS.

#40

I agree with your assessment on the implicit/explicit mentions-- a negative impact is most logically (and in a most simple manner) moving from just passing or in an inconclusive range into a failing score. I disagree with your assessment that the band could drop lower (even though I know you were stretching it for the example)-- this doesn’t seem like a real negative impact. If your band moves lower, no one cares-- you still failed. The CFA Institute seems to avoid any ordinal rankings that could arise from exam performance. It doesn’t seem like this mindset only applies to “good” performance; therefore, a lower failing band wouldn’t have a negative impact on a candidate, since a band 2 and band 10 are “equivalent”.

Also, to the poster who suggested that Ethics only comes into play for those who score exactly on the MPS-- this doesn’t make logical sense if you take the words as they are written. A minimum passing score is the lowest possible score that would secure a pass-- i.e. if the MPS is 65%, then saying a score >= 65% secures a pass is an equivalent statement. It also doesn’t jive with the Institute’s explanation of a score that borders the MPS. If a score equals the MPS, then it doesn’t border the MPS, it is the MPS. If the CFA Institute truly wants to ensure a minimum competency with high resolution, they will take a more complex approach as it is needed. They’re not likely to choose simplicity over the integrity of the results, so I don’t believe a more complex structure should be ruled out.

For one, I don’t necessarily think my ideas are correct, but I think they follow some kind of logic that reasonably jives with the statements made by the Institute. There could be one MPS, there could be many. The MPS could be the top score of an indeterminate range; within the range, your fate isn’t sealed until they look at your Ethics performance. Below the range, too bad, you’re out. There are many possibilities for these things, and without CFAI guidance, no one is getting anywhere. Out of curiosity, where did the 40/60/80 rule come from as a “legitimate” estimation method (I actually haven’t read much on the methodology)?