Benjiko

Esco, if that is the case why is it that Europe was the only place to achieve the highest pass rate? Looking at the 2006 and 2007 overall pass rates(unfortunately not broken out by level) the US had a higher total pass percentage than Asia and Pacific Asia region in both years(just on a quick google search)

You may be correct but you also have a small sample size there ;-) I know of one indian friend who cleared level 1 on his first try but was already a CPA and MBA but had to take level 2 twice.

I am curious how this will matter and how it was done before, were we lumped in with the other regions too?

Ben

suyash1989

According to my research, one of the two things will be proven wrong for sure this time around:

1) 70% score is passing
2) Only 30% of test takers pass

Let me explain why. The reason has to do with 3 choices instead of 4 this time around. First let's analyze the old system. Take an average student Joe Smith who just barely passed in Dec 2008. He scored 70% (per cfa institute - the passing score) and was the 30th percentile of test takers (per CFA pass rate of 30%). Joe knew x number of questions positively and y number of questions he had no clue about. So he randomly guessed on y questions with a 25% chance of getting it right. This leads to two equations:

x + y = 240 (total number of questions equal 240)
and
x + .25 y = 168 (total score must equal 168 to pass)

Solving these two equations leads to values of x = 144 and y = 96

Now Joe has a twin brother, Bruce Lee (unrelated to the kung foo star), with equal intelligence who takes the test in June 2009. Let's say Bruce also knows 144 questions with certainty and 96 questions he has no clue about. How much will Bruce score?

x + .33y (because now the probability of getting the unknowns right is .33 not .25)

Plugging x = 144 and y = 96 in this equation, Bruce will score:

175.68 out of 240 which translates to 73.2% !!!

So the twin brothers of equal intelligence and ability with same number of questions right would have scored 70% and 73.2% correctly, in their respective tests.

This leads me to believe that either the CFA passing score of 70% will lead to more candidates passing than 30% of the total candidates. Or, if they only pass 30% of candidates, then the passing score will likely be higher than 70% (more like 73.2%).

Comments/suggestions?

lc26mizzou

I think it's the top 1% multiplied by the 70 pass mark to arrive at the cutoff. In December, the cutoff must have been pretty low cause I know I BOMBED the PM version like woah and ended up being a band 10. NO way I came close to a 70.

marsilni

cfacowtown, Do you have more info on India being used to determine the overall MPS now? From simple statistics I would assume the larger sample size would just give us a better normal distribution ala the central limit theorem(you like how I used that?)

No offense to India but I highly doubt in the past they have like 50% passing rates and ours are at 35% so do you think it will have much effect?

Thanks

Ben