You failed CFA Level I. But how close were you to passing?

Today is CFA I results day. As we correctly flagged shortly after the December exam took place, the most recent paper seems to have been pretty easy. At 44% the pass rate was the highest it’s been since 2009 and the highest it’s been for the December sitting since 2002!

If you passed, this is all fine. If you failed, knowing that the December pass rate was at its highest for more than a decade isn’t going to feel great. Nor is the CFA’s notoriously opaque mark scheme necessarily going to inform you how close you were to making the grade. CFA forums are full of candidates who passed despite scores of less than 50% on topics like portfolio management.  So why did they pass when you didn’t?

We asked Steve Horan, managing director and co-lead for education at the CFA Institute for his advice on deciphering the CFA I results sheet. This is what he said.

We understand that the minimum passing score varies with each exam, but by how much? What’s the variance…?

In the last two years, minimum pass scores have varied within a range of 5% of exam points at Level I, depending on the relative difficulty of the exam.  Of course, the minimum pass scores may vary by more than that in any given year, but if candidates are able to answer 70% of the exam questions correctly, they are very likely to pass the exam.

Which topic areas allow candidates to score the most points? Which topic areas allow candidates to score the fewest? Should candidates focus on the high-scoring topic areas?

Topic weights by level are published on the CFA Institute website. Curriculum and exam coverage reflect these published weights.  For example, the topic with the most weight at Level I is Financial Reporting and Analysis (FRA) at 20%; four of 18 curriculum study sessions focus on FRA and candidates can expect to see 48 questions on FRA out of the 240 questions on the exam.  For levels II and III, the weights are given as ranges rather than precise percentages of content.  We do not recommend that candidates skip any topics in their study efforts, but it makes sense to put in extra work on topics which the candidate finds challenging; these are often topics in which he/she has little or no professional or academic experience.

If you failed, is it possible to tell how close you were to passing the exam? How?

Not exactly. The best indicator is the “band” information provided on the results report. Unsuccessful candidates are divided into ten equal bands; band 10 lets the candidate know that he/she was in the decile (i.e., top 10%) of unsuccessful candidates that came closest to passing.

If you passed, is it possible to tell how good your pass was? How? How do the individual topic areas combine to create the overall pass rate?

As noted above, the topic areas are weighted; more exam questions and points are allocated to the higher-weighted topics.  With regard to relative proficiency, candidates whose results reports showed performance of no topics ≤ 50% and the majority of topics above 70% can be confident they performed near the top of their class.  We do not encourage candidates to compare performance.  As with any credentialing exam, the objective is to demonstrate an acceptable level of competence or mastery of the knowledge and skills deemed necessary for success in the profession.

If you failed, is there any way of telling how well you performed relative to the people who passed?

The band information described above provides a good indicator of overall performance, relative to those who passed.

On your website you note that papers are marked by a machine and that they can be retabulated if the machine reads them wrongly. Is it common for papers to be unreadable by the machines?  

Any candidate who did not pass the exam may request a retabulation. It is extremely rare that an answer document cannot be read by our scanning equipment.  CFA Institute incorporates numerous quality control measures during the grading process to ensure all answer responses are recorded accurately and the grading key is applied correctly.  Only after all quality control measures are complete do we release the results to the candidates.