Process
| Year | Level 1 | Level 2 | Level 3 |
|---|---|---|---|
| 2012 Pass % | 38% | 42% | 52% |
| 2011 Pass % | 39%/38% | 43% | 51% |
| 2010 Pass % | 42%/36% | 39% | 46% |
| 2009 Pass % | 46%/34% | 41% | 49% |
| 2008 Pass % | 35% | 46% | 53% |
| 2007 Pass % | 39% | 40% | 50% |
| 2006 Pass % | 40% | 48% | 76% |
| 2005 Pass % | 35% | 56% | 55% |
| 2004 Pass % | 35% | 32% | 64% |
| 2003 Pass % | 41% | 47% | 68% |
| 2002 Pass % | 44% | 47% | 58% |
| Weighted Mean of Pass % | 39.7% | 44% | 57.7% |
The basic requirements for participation in the CFA Program include holding or being in the final year of a university degree (or equivalent as assessed by CFA Institute), or having four years of qualified, professional work experience in an investment decision-making process. To obtain the charter, however, a candidate must have completed a university degree (or equivalent) or four years of qualified, professional work experience, in addition to passing the three exams that test the academic portion of the CFA program, as discussed below.
Candidates take one exam per year over three years (assuming a pass on the first attempt). Fees as of December 2009 for each exam range from $710 to $955, depending on the date on which the candidate registers to take the exam, plus an additional $400 to $480 for program enrollment for new members.
Exams are challenging, with 38% passing the Level I, 42% passing Level II, and 52% passing Level III exam in June 2012. It should be noted that Level II and III pass rates apply to candidates that must have already passed the prior level. From 1963-2012 950,221 candidates have sat for the Level I exam, with 152,035 candidates ultimately going on to pass the Level III exam, representing a weighted average completion rate of 16%. From 2003-2012, the completion rate was 14%. Completion rates may be skewed lower due to candidates' voluntarily dropping out of the CFA program and recent candidates that have yet to sit for the Level III exam.
All three exams are administered on paper on a single day; the Level I exam is administered twice a year (usually the first weekend of June and December). The Level II and III exams are administered once a year, usually the first weekend of June. Each exam consists of two three-hour sessions. Level I has 240 independent, multiple-choice questions - all information required to answer the question is contained in the question. Level II has 120 multiple-choice questions, organized as 20 six-question item sets, each set having its own vignette of facts. To answer each question, the candidate must refer to the vignette as there is insufficient information in the question stem. Level III consists of a session of constructive response, essay-type questions, and a session of 10 six-question item sets as in the Level II exam. On the multiple-choice/item set sections, there is no penalty for wrong answers. For the test, only two models of calculator are allowed (the Hewlett Packard 12C including the HP 12C Platinum, and the Texas Instruments BA II Plus including the BA II Plus Professional).
Candidates who have taken the exam receive a score report that is intended to be fairly unspecific: there is no overall score for the test, only a Pass/Fail result, and a range within which his or her performance for each topic area falls: below 50%, between 50% and 70%, and above 70%. Additionally, failing candidates are informed of their decile rank within the body of failing candidates. The passing grade for the exams had been defined as 70% of the top percentage of exam papers until 1989; since then, the grading method is not explicitly published and the minimum passing score is set by the Board of Governors after each exam. The Board of Governors reviews the results of the standard setting process and input from psychometricians.
Standard setting is a process that defines the passing score of the exam. The CFA exam utilizes the modified Angoff method which is a commonly used approach to setting standards for certification and licensure examinations. Subject matter experts review the exam and recommend a minimum passing score for the "just-qualified candidate". The minimum passing scores are presented to the Board of Governors in a report. The Board of Governors is not bound by this recommendation, but does recognize it as very important information.
Read more about this topic: Chartered Financial Analyst
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