Can I Fail Ethics But Still Pass the CFA® Exams?

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By Christine

This is a topic that candidates will get confused over and over again – do you really need to master Ethics to pass the CFA exam? I think many candidates ask this question because:

  • Ethics is not as exciting to read as the rest of the topics (no mean feat!)
  • Ethics questions are tough.
  • There’s always vague rumours among candidates that Ethics is super important to pass the exam.

Hence the typical candidate may wonder at some point:

Can I simply throw Ethics under the bus, and try to be awesome at everything else to pass?

Our answer is:

  1. Yes, it is possible pass the CFA exam even if you’re rubbish at Ethics. BUT…
  2. It is a Very Bad Idea to dump Ethics as a CFA exam study topic.

​Read on to learn why!

How a passing score is determined for the CFA exam

There is a lot of confusion and mystique about exactly how one passes the CFA exam. Which I find strange because it’s the same as almost any other exam: score higher than the set passing score.

In the CFA Program, this score is called the Minimum Passing Score (MPS), and it’s a number that varies from year to year and isn’t disclosed to candidates.

What is the CFA exam’s Minimum Passing Score?

In simple terms, the Minimum Passing Score (MPS) is the score you have to beat to pass your CFA exam. This normally is around the 55%-70% range. Don’t confuse this with the pass rate, which is normally lower and represents the percentage of candidates that passed a particular exam.

CFA Institute strongly feels that the MPS should not be a focus of the exams as it leads to unfair comparisons across years. Consequently CFA Institute has never made any MPS for any level public. (We do have an estimate on what the historical MPS has been based on our own research, which you can read here.)

Presently, the MPS is determined by a custom methodology devised by CFA Institute, and one of the primary inputs is a series of workshops based on the Angoff model. The driving concept of the MPS is that this should be the theoretical score of a candidate that CFA Institute judges to be just good enough to pass that year’s exam.

So you pass when your score exceeds the Minimum Passing Score. Being good at Ethics helps your overall score which helps you pass, but being bad at Ethics certainly does NOT automatically fail you.

What is the CFA exam’s ‘Ethics Adjustment’, and how does it affect my pass chances?

So why is there such a strong belief among candidates that you can’t pass without Ethics? This isn’t without reason – CFA Institute places Ethics as one of the most important topics in the CFA Program. It’s also not a good idea to dump Ethics as a topic – it is a significantly-weighted topic in all 3 CFA exam levels.

Ethics is also unique in a very important way. CFA Institute implements a factor called the ‘ethics adjustment’ for candidates that are within the passing score. Quoting the CFA Institute:

​The Board of Governors instituted a policy to place particular emphasis on ethics. Starting with the 1996 exams, the performance on the ethics section became a factor in the pass/fail decision for candidates whose total scores bordered the minimum passing score. The ethics adjustment can have a positive or negative impact on these candidates’ final results.

This means that if you’re a borderline fail, you can be lifted into the passing zone by a strong performance in Ethics. Similarly, if you were a borderline pass, you could be failed if your Ethics performance was particularly weak. However, overall CFA Institute has stated that you’re more likely to be be ‘passed’ through ethics adjustment than ‘failed’

How your Ethics score affects your CFA exam pass chances

To know just how significant ethics is to your chances of passing the CFA exam, just remember these three points:

  • Yes, you can pass even if you suck at Ethics.
  • However if you’re a borderline case, Ethics will be the tie-breaker.
  • Apart from that, Ethics is the same as any other topic. But as it is important to the program, you should never dump it. Here’s some advice on how to approach Ethics, and our Cheat Sheet to Ethics if you need some pointers.

Are you feeling confident with your Ethics progress? Let us know in the comments below!

Zee Tan
Author: Zee Tan


2 thoughts on “Can I Fail Ethics But Still Pass the CFA® Exams?”

  1. Giving up on ethics is definitely not the way to go. It is of key importance to the CFA Institute, and for good reason. Asset management is a trust business. That is why ethics – as noted in the article – can be the swing factor in getting you across the finish line.

  2. (Like Eleanor,) I’m getting better at ethics but still get completely confused with the questions where the main character does completely sketchy shit, but still somehow is compliant with Ethics. Is there a rule of thumb to help with this?


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