Guesstimates of discouragement rates for Level 2 2010, continue, opposite, applies, country

Penny-wenny

I got >70% in all sections for Level 1 in 2010. Tried much the same strategy for the Level 2 exam, and got solidly kicked into touch / hit for six over the cover boundary. (I'm from a rugby / cricket country.) I was 80% sure that I'd passed Level 1 as I walked out the exam room. For level 2, the exact opposite now applies.

I'm really doubtful that I'll continue trying if the news is bad at the end of next month. With this in mind, I was curious about discouragement (ie CFA program dropout) rates after Level 2. Can we get a ballpark number, or range for this?

You'll need to look at the 1963 - 2010 exam results pdf to make sense of the following.

1. Start with the cohort that did Level 1 in 2008: 32 923 candidates passed (counting Jun and Dec exams). This group provides one main "feed" into the 2009 Level 2 exam.

2. The other main feed into 2009 Level 2 is the 2008 Level 2 fails: 18 206.

3. So the total theoretical maximum candidates for the 2009 Level 2 is 51 129. Actual number of entries: 38 998 (76% of theoretical max).

4. Now the heroic assumptions start. Let's assume that most Level 1 passes are enthusiastic enough to carry on to Level 2. Shall we say 85% of this group do Level 2? On this asumption, the 2009 Level 2 exam was written by 27 984 first-timers and 11 013 1st, 2nd, or nth-time repeats.

5. On this assumption, the level 2 dropout rate is 39.5% [1 - (11 013 / 18 206)].

Any criticisms of this logic, or suggestions or comments? If you carry the analysis into Level 3, things start looking even more gloomy.

sabre

Or, look on the bright side - despite a massive upswing in people taking the CFA, the number of people actually taking (and passing) all three isn't quite as large as you might expect...so when (not if!) we finally pass, we're still relatively elite!

Or something like that.

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parott

I follow your logic and I think your estimation is reasonable. I think one thing you forgot to take into account is candidates passing L1, but taking L2 two years later. I know several people who did this due to personal circumstances. Don't really know how to incorporate this though.

SFoyil

Only criticisim is the sensitivity of your assumptions. If you assume 90% L1 continue, the figure jumps up to nearly 50%. If you assumed 75% continue (maybe more realistic?), the dropout goes down to 20%.

As you note, some of the "dropouts" are taking their 2nd or 3rd try, so the persistance of 50-80% seems reasonable as a cohort.

I think you ignore the "special cases" since there are both positive and negative count reasonings that cancel in a steady state.

dreampak

Good try, but I think the sensitivity to your assumptions makes it really difficult to have any confidence in your conclusions. Also, like others have mentioned, your "theoretical maximum" excludes people who either passed Level 1 and took a year (or more) off and people who failed Level 2 and took a year (or more) off, unless you consider not taking level 2 the year immediately after failing to be dropping out. Maybe these cases are statistically insignificant, but we really have no way of knowing that. I wish CFAI would publish more detailed stats about the test taker demographics, because from the data they do provide, its really not possible to make any reliable inferences.



Edited 1 time(s). Last edit at Thursday, June 23, 2011 at 02:29PM by KilgoreTrout.

jcole21

Why waste time on this?

Get your result, make a decision, and move on.

Life is too short, and the CFA is NOT that big a deal.