AuthorTopic: Pass rate: 35%!
@2008-07-29 06:12:26
@2008-07-29 08:09:58
THe pass rate became lower. Does that mean the exam got harder?
@2008-07-29 08:50:48
Look at a graph of the number of people taking the exam. It has skyrocketed. I don't think the test became harder all of the sudden, I think you have a lot more unqualified people (no finanace background..myself included) going for three letters and not understanding what is required.
@2008-07-29 09:31:27
The exams haven't gotten any harder, they have just gotten different. The changes that have happened over the last 10-15 years seem to be:

1) Many, many more people are taking the exam as a way to get into finance. There are lots of college students, IT professionals, waitresses, etc. taking these exams to get a new career. That was nearly unheard of 15 years ago and very rare 10 years ago.

2) The exam has gotten more international. That has a variety of effects on the candidate pool as there are some very driven Chinese and Indians (for example) taking the exam, except their English is not very good.

3) The scope of the exams gets broader all the time. For example, in the last ten years, structured finance has exploded and the CFA exam has incorporated at least some of that.

4) There are way more study aids than there were 10 years ago. When I took these exams 5 years ago, there were a couple of review guides mainly Schweser and AnalystNotes. Now there seem to be a whole bunch of products that are unrecognizable to me (e.g., what the heck is "professionalexamprep"?). While this should make it easier to pass the exam, there's a whole group of people who think that these are shortcuts not study aids. Anybody who comes to AN saying that they need to find the magic product to cut their study time to 100 hrs is a failure waiting to happen.

5) The ethics sections have become even more byzantine and bizarre (I can't believe nobody here will help me fix this).

6) The method for deciding who passes and who fails has gotten more touchy-feely with the Angkoff (or whatever) method. I have no idea what this actually does to the passing rate, but the stuff about "psychometric validity" is just gabbledegook.

7) CFAI is involved in more gamesmanship with the review providers. In 1995, for example, AIMR barely cared that AnalystNotes was selling review guides that competed with their textbook sales. If Schweser doesn't cover something well that is covered well in CFAI's literature, it's a likely vignette on L II.

8) CFAI has gotten big business. The head honcho at CFAI made $2M last year. You've got to get lots of people taking the test for that. That means that normal, pretty smart people need to be able to take and pass the test if they work hard enough at it. That's why the test is a million miles wide and an inch deep. If the exam was constructed so that you needed a 150+ IQ and lots of education or experience to pass it, the people who could pass it would barely want to ("I've got enough trophies, now I want to spend time with my family"). Many of the earlier exams (think '70's) required much more synthetic thought than is now required replaced by a much broader topic list.

9) CFAI is using the exam to forward their own agenda more. For example, I am offended by questions on the exam about GIPS, CFAI's homegrown only partially sensible presentation standards. Using the test to accord GIPS with the same kind of weight as, say, Black-Scholes is vile.
@2008-07-29 10:39:23
How do you feel about the fact that CFA is much less of a professional diploma than it was when taking the exam required professional experience?
Some seem to think that it is not optimal to put students in competition with professionals (I am quoting one of my co-workers)
@2008-07-29 11:06:07
I want to say I heard 25% somewhere, but it isn't really relevant. Many people who have employers pay for the exam sit and fail without putting in the time or effort. Obviously this creates an artificially high fail rate relative to the people who put in the time and effort.

CFA Discussion Topic: Pass rate: 35%!

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You have a wonderful website and definitely should take some credit for your members' outstanding grades.
Colin Sampaleanu

Colin Sampaleanu