Let’s Examine the CFA® Scoring System

You finished taking your first level of the CFA® exam, now what? You’re probably have tons of questions about how the exam is scored and when you’ll know your results. These are all valid questions and frustratingly complicated to find direct answers.

Your CFA® exam result will either be a pass or did not pass. Seems simple enough, but what determines a not passing score and who’s calling the shots? Let’s check out what goes on behind the scenes and resolve any confusion you may have about how your CFA® exam will be graded.

Availability of Your Results

For CFA® Level 1 and Level 2, your results will be available within 60 days of your exam date. CFA® Level 3 results are released within 90 days of your exam date. Once you get your results (assuming you passed) you are allowed to register for the next level of the exam.

If you did not pass, don’t be too hard on yourself because technically, you’re in the majority. In 2016, the pass rates for Levels 1 and 2 were below 50% and Level 3 was 54%. You will receive additional information with your “did not pass” results that highlight your performance relative to all other candidates. I suggest you use this to help guide your studies for when to retake the exam. Checkout my blog post on how to recover from a CFA® Exam failure.

Who’s Grading the CFA® Exam?

Most of the CFA® exam is in multiple choice format, which means they are machine graded. But don’t worry, the graders will manually score 5-10% of the multiple choice tests in order to ensure that the machine is in check.

Early on in the grading process, there will be a reevaluation of the multiple choice questions depending on the results and complaints logged during the exam. If the CFA® Institute comes to the conclusion that a question was unfairly unclear, the points go to you. This ensures you don’t get screwed over when the CFA® Institute makes a mistake in the way a question was phrased.

The Level 3 exam includes essay questions which cannot be graded by a machine. Instead, essays will be graded in a 2 week period in Charlottesville, VA by a whole camp of graders. These graders are the best of the best and come from academic and professional fields. If you think becoming a CFA® is hard, these graders are the elite that make up 15% of the people that are accepted into this role. Those 50% pass rates aren’t as scary in comparison.

The graders form into teams of 3 or 4 and score one question or a question part that relates to the group’s speciality area. There is a whole process with junior graders and senior graders that check each other’s work to maintain consistent quality control. After all the essays have been graded, the middle 50% is graded again to double check the borderline cases. Graders see only the essay content they are given. They will not know your name, test center, or even how you performed on other questions—giving you the most unbiased score possible.

What is the Minimum Passing Score for the CFA® Exam?

To pass any of the CFA® Exam Levels, you need to match or beat the Minimum Passing Score (MPS). Great! Now, what is that score? Unfortunately, the MPS is not public knowledge nor a straightforward number for you to aspire towards. Even though the MPS is never known externally, chances are it has a maximum around 70%.

After each exam administration, the CFA® Institute Board of Governors sets the MPS for each level. They approach the scoring system in this manner to ensure fairness to candidates across administrations as the difficulty of each exam is taken into account when setting the MPS. Once the MPS is set, the CFA® Institute generates the results of the candidates who took the exam to determine who passes and who doesn’t.

Why Ethics Can Decide Whether you Pass or Fail

If your results are borderline, graders will go back and check out how you did in the Ethics section. If you performed strongly, your borderline score becomes a passing grade. If you failed the Ethics section, your borderline score turns into a fail.

This “Ethics Adjustment” was instituted by the Board of Governors to place emphasis on ethics. This started in 1996 and has become a factor in the pass/fail decision for those scores that are borderline. This can be either a negative or positive impact for you, so make sure you give Ethics the love it deserves and know it very well so you can have that extra boost if needed.

Dealing with the Uncertainty Factor

You’re probably not feeling too reassured by now, especially knowing that the MPS isn’t public knowledge. And as number people, it can be hard to swallow such uncertainty when we know how much is at stake. The only way to deal with this is to be as prepared as you can. Make sure your ethics are solid as they can help tip the balance in your favor and be sure to choose the right CFA® prep course to maximize your study efficiency. Know your learning style, and arm yourself with the best tools to allow yourself the best chance to pass.

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