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What can you do now to pass CFA Level I? How to pass Level III? The Institute speaks

The CFA Institute talks CFA exams

The CFA Institute talks CFA exams

The December sitting for the CFA Level I exams is fast approaching. As we noted last week, many will fail. In most years, the December pass rate is way below the June pass rate – sometimes significantly so (e.g. in December 2010, it was just 36%). So what should you be doing now if you want to pass in a few weeks’ time? And on a separate note, is it worth persisting on until Level III?

We put these questions on CFA exams, and more, to Stephen Horan, PhD and co-lead of education at the CFA Institute. This is what Stephen said.

1. If you want to pass CFA Level I in December, you need to practice, practice and practice

“At this late stage, my advice is to make sure people are focusing on practice problems and mock exam. We find that candidates who are able to reserve time for this at the end tend to be more successful.

“The other big driver of success (although it’s difficult to change at this stage) is study time. Candidates who put in a lot more than 300 hours of study are more likely to succeed. Some people study a lot more than 300 hours, some study a lot less – the standard deviation in study time for the exams is 137 hours.”

2. Keep going and don’t fear failure

“It’s rare that a candidate goes through and passes all three exams in one sitting each. Most candidates sit for one exam more than once, and folks typically take four years to complete the CFA program. However, fewer than one in five of those who start the program will complete it.”

3. You have a greater chance of passing Level III when you have more experience

[In response to a question on why the pass rate for Level III has fallen in the past decade.] “We find that professional experience plays more of a role in Level III success than in Level I success. Today, the proportion of students entering the program is greater than it’s ever been in the past. Candidates tend to be younger. The level three pass rate is higher among candidates with higher experience.”

4. The hardest parts of Level III are being updated soon

“The hardest parts of the Level III exam tend to be derivatives and risk management. Every year we update 20% of the curriculum and we’re in the tail end of a process to update those two elements in 2014.”

5. 14,500 people passed CFA Level III this year. This is what that signals to employers 

“Around 27,000 people sat CFA Level III this year [54% passed]. The aim of the program has always been the same: to look at what a professional with four years’ experience should know and accomplish.” Full CFA Charterholders therefore know and have accomplished what’s necessary in today’s investment market.



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