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Disappointed CFA Level III candidates are complaining that the marking system seems really quite arbitrary

Congratulations, you've passed (Photo credit: Wikipedia)

Congratulations, you've passed (Photo credit: Wikipedia)

Yesterday was CFA Level III results day. 52% of candidates passed. This wasn’t too bad compared to an average Level III pass rate of 49.5% since 2009, but wasn’t so good compared to a 10 year average pass rate of 55%.

As we’ve noted numerous times, it’s a moot point whether being a CFA Charterholder will really make much difference to your career. As far as we can see, it’s a nice to have, but only in combination with the correct sort of work experience for the job you’re applying for – it’s no magic bullet. On eFinancialCareers at least, few jobs specify a full CFA Charter: fewer than 1% of the jobs currently being advertised on our system contain those words.

Nevertheless, it does seem that full CFA Charterholders are less likely to be unemployed. And it does seem likely that there’s an alumni effect of being a Charterholder: one Charterholder is more likely to employ another.

In the circumstances, therefore, having put in your 300 hours of studying to achieve CFA Level III, you’d probably be slightly annoyed if you found that you’d failed for what appeared to be no real reason other than the way the CFA designed the layout of the exam paper.

This is what various people are complaining about here. Several candidates seem to have scored inexplicably badly in the morning papers and very well in the afternoon papers. They attribute their poor morning test results to the way the CFA had designed the test paper, arguing that there were questions and then blank pages and then the formatted answering template, making it difficult to know where to write your answer.

“Candidates fail because they’re writing on the wrong places,” argues one candidate. “Even though attention to detail under time pressure may be an important quality, for some candidates the  “Writing on the Right Place” subject becomes more important than Portfolio Management. That’s a little too much.”

If you sat any of the CFA Exams in June and are wondering about your results, blogger 300 Hours has devised a tool for analysing your results, which is accessible here. 

The CFA Institute was unable to immediately comment on Level III candidates’ claims that they’d been penalised for the confusing layout of its papers. However, it did point out that after each exam, the CFA Institute Board of Governors sets a minimum passing score, suggesting that if everyone were equally confused by the layout the passing score may have been reduced to take this into consideration.

One Level III candidate suggests whinging about marking systems is merely an excuse for failure: “I know you don’t want to hear this, but it’s not the exam, it’s you. You are either providing too much information or it’s not clear enough when you do.”

LATE ADDITION: These are the responses from the CFA Institute: 

Here is the link to the Fifth Decade article which discusses the standard setting and MPS processes on pp.10-11.

·  It seems that most of the candidate discussion is around differences in perception of what the questions were asking.

·  Candidates may be unfamiliar with the essay format in their own educational experiences. Unlike the other formats (multiple choice and item set) where you see the set of answers and can choose the best one, the essay format requires the candidate to create or construct a response.

·  There is a candidate in the discussion thread who passed on his/her third try and offers good advice.  Study the curriculum and draw upon what you learned in your answers.  A candidate is at a big disadvantage if he/she has not studied the curriculum.  Many questions will ask you to apply what you learned to a different set of circumstances than the examples and practice problems given in the curriculum.  So one has to learn to apply the concepts, not just repeat key words from the curriculum.

·  Common mistakes that candidates make in the essay format stem from failing to read the questions carefully; quite often candidate answers address the general topic covered but not the specific question asked.  Candidates are advised to pay close attention to the “command words” used in the question.  Command words are defined in the curriculum and on the inside cover of the exam books.

Some examples:

·  If a question asks the candidate to determine the correct asset class to use and justify the response with two reasons, candidates will receive little or no credit for discussing the components of one or more of the asset classes presented without directly justifying why that asset class is the correct choice.

·    If a question asks candidates to show their work in support of a complex, multi-step calculation, the candidate may know how to perform the calculation but makes an error.  The candidate will receive partial credit if his/her work is shown and the grader can see that the problem was set up correctly and the error was minor, but no credit in the absence of the supporting work.

·   If a question asks for two supporting reasons, candidates need to make a judgment as to the best supporting arguments and provide only those two.  Additional reasons that the candidate may list beyond the first two are not scored.”


Comments (2)

  1. The whole thing with the CFA is that if you want to work in Asset Management or Investment Analysis, if you have it, fine, well done, let’s move on now, BUT if you don’t have it, then you have a real problem… This is the true value of a CFA and it is actually huge: it is assumed that you have it, period. Nearly every job oppening I see in Asset Management asks for it (reason why I had to do it, as I work there) so if you don’t have it you won’t normally get the job. But on the other hand, once you have it, good for you but it won’t be of any help anymore.

  2. I disagree with HFManager…I have found the concepts and knowledge gained through the CFA program to be extremely valuable in my career as a portfolio manager.

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