Have you ever wondered how is the CFA exam graded?
A while ago I actually researched and considered applying to be a CFA exam grader. Although I ultimately decided not to apply, I learned a lot about the CFA grading process and what the CFA Institute goes through to get your results to you.
That said, given the COVID-19 disruption this year, the usual process and timelines may differ, but here’s what CFA Institute goes through in the exam grading process.
How Is The CFA Exam Graded?
Multiple choice questions
After the exam, multiple-choice papers are securely delivered and machine-graded. At the same time 5-10% of multiple-choice papers will be graded by hand as a quality-control mechanism.
For the scantron machine to work, it’s important that your answer sheet is filled in properly with the right pencil lead. This why it is recommended that you use No. 2 or HB pencils to fill out your answer sheet.
CFA Level 3 Constructed Response (Essay) Questions
The Level 3 morning paper will be graded in a 2 week period in Charlottesville, VA by a platoon of selected volunteers, consisting of pretty much the best of the best investment professionals around the world.
You think the CFA exams are hard? Try applying as a grader for CFA exams. The acceptance rate to be a CFA exam grader is about 15% – we’re talking turning away CEOs of investment firms at the door, saying ‘no, you’re not good enough’.
Graders are always provided all guideline answers and grading keys well in advance to allow time to prepare and to suggest changes.
The graders form teams in which each team grades only one question, or a question part, which tends to be their industry specialty area.
Each individual answer will go through a hierarchy of junior graders, senior graders, and grader of graders, checking each other’s work to ensure consistency and quality.
After all papers have been graded, the middle 50% is graded again to ensure that the borderline cases would have been double checked.
Will CFA graders know anything about the candidates they’re grading?
Multiple choice questions (MCQ) answer sheets are graded by machine.
For Level 3 essay questions, graders only grade one question, and they will not know your name, your test centre, or even how you did – apart from the single question they are evaluating you for.
This is also why you should answer each essay question independently, and not assume any contextual knowledge from a previous question or any of your other answers.
For more tips on how to successfully answer essay questions, read our guide here.
What about the Minimum Passing Score (MPS)?
The pass mark, or the Minimum Passing Score (MPS) is determined in a series of workshops, also held during the grading process. The methodology used is based on a modified Angoff method – you can learn more about the process here.
The MPS is not determined by a relative curve, so just to be clear, just because someone did well does not mean they made it harder for you to pass!
The MPS is not made public, but if you’d like an idea of where the MPS is for the CFA exams, you can see our estimates here.
What about ‘ethics adjustment’? How does it affect my CFA exam results?
The ‘ethic adjustment’ basically means that if you are close to the pass-fail border, your performance in Ethics will be used as the tie-breaker. Apart from that case, Ethics contributes to your final score just like any other topic area.
You can learn more about the ethics adjustment and why Ethics is extra important to the CFA exams here.
What happens if there are errors in the exam questions?
During the grading, there would also be a reevaluation of questions depending on the results. Complaints about the questions will also be logged.
Question issues can include:
- They’re unfairly confusing.
- They have multiple right answers, or no right answer.
- They were structured wrongly, or have not enough information for a definitive answer.
In every case where a question is determined to be problematic, any candidate that may have been treated unfairly will be awarded points.
This means in the examples above:
- Unfairly confusing questions? Points for everyone.
- Multiple right answers? Points for either answer.
- No right answers? Points for everyone.
- Not enough information for a definitive answer? Points for everyone.
What is retabulation? Should I use it?
After results are announced, and if you’re not happy with your results, you can request for your exam score to be manually retabulated for a fee of $100. However, overall it’s not something we recommend you pin your passing hopes on, we’ve not heard of any successes (i.e. fail to pass) with retabulation so far.
Retabulation only confirms your scores are calculated correctly – it’s not an appeals process, nor a remarking of your paper. The fee will be refunded if your score was found to be totalled incorrectly – if the score was correctly calculated, you lose the retabulation fee.
Do you have any additional questions about the grading process? Let us know what your thoughts are in the comments below!
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