The CFA exam is one of the most difficult exams out there. And if you’re not prepared, you’ll not pass or receive a CFA charter.
With CFA historical pass rates averaging around 40 percent for years, it’s safe to say that it takes more than basic knowledge of CFA concepts to become a charterholder. Even those who study for the test for months fail.
So, where do most people go wrong?
In a Reddit thread on CFA failure, one of the posters responded:
“I didn’t start studying early enough. I was actually in the beginning of an MS Finance program, and I made the dumb mistake of assuming a lot of the material would be things I already knew.”
Other posters mentioned things like not taking mock exams, not knowing essential formulas, and not sticking to their study schedule.
But don’t worry, we’re here to help. In this article, we’ll tell you everything you need to know about how to get a passing score on the CFA exam.
Getting Started: The Basics
Before we dive into the specifics of the CFA exam results and how to study, let’s make sure you’re on the right track to qualify.
First, you must have a bachelor’s degree from an accredited university. Second, you’ll need to have four years of professional work experience. And third, you must be a member of the CFA Institute.
The CFA Institute recommends that candidates have four years of professional work experience before sitting for Level III of the exam. However, there is no minimum work experience requirement for Level I or II.
If you meet all of these requirements, you can take the CFA exam.
Now that we’ve got that out of the way, let’s move on to the exam itself.
The CFA Exam: An Overview
To get passing CFA exam results, you need to understand the structure of the test.
There are three levels to the CFA exam: CFA Level I, CFA Level II, and CFA Level III. You must pass all three levels in order to become a Certified Financial Analyst. Each CFA level of the exam becomes progressively more complex, so it’s important to be prepared for the grading process.
The CFA exam Level I is given through computer based testing, and you’ll have six hours to complete it. You’ll be tested on your knowledge of investment management, financial analysis, and portfolio management.
There are a total of 180 multiple-choice questions on the exam, and you’ll need to get a minimum passing score (MPS) of 70% to pass. A numerical score is provided through a score report several weeks later.
Level II consists of 22 item sets comprised of vignettes. It also has 88 multiple-choice questions.
As of February 2023, CFA Level III’s structure is slightly different than previous exam administrations. Each test session will include constructed response (essay questions) sets mixed with 44 multiple-choice items based on vignettes.
To pass the CFA exam, candidates must earn a passing score on each of the three exams. The passing score for each exam is set by the CFA Institute Board of Governors and based on previous examinations’ results.
Candidates must get a minimum passing score (MPS) of 70% on the multiple-choice questions on the CFA Level I exam, a minimum score of 65% to 70% on the multiple-choice questions on the CFA Level II exam, and a minimum passing score (MPS) of 60% on the multiple-choice questions on the CFA Level III exam. In addition, candidates must earn a minimum passing score (MPS) on the essay portion of the CFA Level III exam.
Individual candidate scores vary, and the pass rates look slightly different for each CFA level. CFA Level 1, for example, has a historical pass rate of 37%. CFA Level 2 has a slightly higher pass rate of 40%. But the pass rate for CFA Level 3 is 48%. The pass or fail rates are published annually to show a consistent benchmark.
As important as knowing the test structure and passing scores candidates receive is, unfortunately, this isn’t enough.
Passing Score Tips
There are a few things other things you must do throughout the entire exam to increase your chances of getting a passing score on the CFA exam.
Let’s cover some fundamentals of a successful test taker.
Know the Content
This may seem like a no-brainer, but you’d be surprised how many people try to take the CFA exam without really knowing the material. If you want to pass, you need to make sure you know the topics inside and out. How can you do this?
Make sure you’re using high-quality study materials. The CFA Institute provides a great deal of free resources on its website and info on past exams. However, they’ve been very clear that these resources aren’t enough to ensure minimum passing exam scores or help you become a chartered financial analyst.
What you’ll really need is a course that not only provides study materials but also teaches quantitative methods for passing the test. You’ll also need a personalized study schedule you can stick to. Otherwise, you’ll try to cram everything in at the last minute—you’ll only end up stressed and overwhelmed.
This is where a top CFA prep course can come in handy. Thankfully, they are offered for the CFA Level I exam, CFA Level II exam, and CFA Level III exams.
Start studying early, and you’ll give yourself plenty of time to learn the material.
Take CFA Practice Exams
Although there’s no substitute for taking the actual CFA exam, you can ensure you’re as prepared as possible by taking practice exams under mock exam conditions. This will help you get used to the exam format and identify areas where you need more study.
CFA Mock exams can also be a great way to find out which topics you need to focus on, so feel free to take as many as you can until you’re comfortable with the format.
Many CFA study courses provide access to mock exam questions as well as CFA test question banks. These help test takers know what to expect on exam day. Some even offer money-back guarantees for those who don’t earn minimum passing scores.
Answer Every Question
This may seem like obvious advice, but it’s important to make sure you answer every question on the exam, even if you’re not sure of the correct answer. There is no penalty for guessing, so you might as well take a shot at every question.
Doing so helps raise CFA exam pass rates.
You’ll also want to review the requirements of a question before reading the actual scenario. You can use this strategy for ethical and professional standards questions in particular. CFA candidates who take their time to do so during exam administration are much more likely to receive sold exam results.
They are also more likely to become CFA charterholders.
Use the Process of Elimination
Stuck on a question? Passing candidates use the process of elimination to secure a passing exam score.
If you’re unsure of the answer to a question, try to eliminate any obviously wrong answers. This can give you a better chance of guessing the correct answer.
Again, this may seem simple, but so many times, our knee-jerk reaction to not knowing an answer for a particular exam question is to guess. Eliminating wrong choices can make for a better exam result.
Don’t Waste Time on Difficult Questions
If you find yourself stuck on a difficult question, moving on and returning to it later is okay. However, you don’t want to spend too much time on tough exam questions and run out of time for the rest of the exam.
These are just a few tips to help you get a passing score on the CFA exam. Just remember that the most important thing is to be prepared. If you study hard and put in the work, you have a much higher chance of raising those pass rates.
How to Get a CFA Passing Score FAQs
The MPS, or minimum passing score, is not actually released by the CFA Institute. So there really isn’t a set number of questions needed to pass the CFA. In fact, the MPS can vary somewhat from year to year based on the difficulty of the questions. However, shooting for a passing percentage of 70% or above is generally thought of as optimal.
It’s possible but not likely. This is considered a borderline MPS line score since general passing rates are around the 70% mark. However, the actual passing rate isn’t released by the CFA Institute. This means that scores under the 70% score range can still pass depending on test difficulty.
The exam pass rate for CFA Level I is historically low because it is a difficult test. The breadth of topics covered is massive. This means that CFA charterholders must put in a great deal of study time to get passing CFA exam results.