The CFA Level 3 essay questions, also known as the constructed response section, is often a significant challenge to Level 3 candidates.
Our research has also estimated that more than 93% of Level 3 candidates performed worse in the essay paper compared to the item-set paper, so improving your essay performance can really help your chances in the CFA exam. The CFA Institute also confirms that the essay scores are materially lower than item set questions scores.
But although we can find constructed response practice questions, how do we grade them properly?
Here’s a clear guide to grading CFA Level 3 essay questions accurately, drawing from our discussions with third party study prep providers and CFA Institute, which you can easily implement when doing mock exams.
Let’s take a look!
First and foremost, you must be dispassionate and objective.
Do not take it personally, which is hard to do when evaluating your own work and under exam prep stress.
Instead, put yourself in the position of the grader. The grader is neither your friend nor your enemy. The grader is working from an answer key (which is not released) and evaluates how many of the elements of a correct answer you included. Getting CFA Level 3 partial credit during grading is normal.
Second, realize that the Guideline Answers (GA) you see for old exam questions are not the Grading Key and do not reflect what successful candidates write.
Guideline answers:
For time management purposes, consider 1 point to equal 1 minute of time to be spent on that essay vignette.
As a rule of thumb, a good CFA Level 3 essay answer can generally be written is less than half the time allotted for the question. The rest of the time is to think.
What makes a good answer is one that directly answers the specific question that was asked using the relevant case facts and the CFA material. The structure of the question itself directs how to grade it.
Let’s look at this via two examples from a previous CFA Level 3 exam:
Question 1C: Determine the most likely effect (decrease, no change, increase) of each change on the fund’s reported Sharpe ratio. Justify each response. Note: Consider each change independently. (6 minutes)
How to grade this question:
Question 1D: Discuss two weaknesses of using this benchmark to measure the performance of Matterhorn’s hedge fund. (6 points)
How to grade this question:
Hope the above helps your Level 3 essay preparations! Do you have further tips to add that worked for you? Let us know in the comments below.
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View Comments
I am wondering if I can find an objective third party to grade my essay portion of the mock. Any recommendations?
Hi AM, I'm not aware of any party that does that. I personally just looked through my answers (hopefully they are brief, to the point in bullets) against the marking guidelines, and did not assign any mark per se and moved on. The purpose is really to see if you can do the essay bit on time (which is more important in my opinion), and then if the calculations are correct (this is objective and easy to mark for), and finally are you getting the broad strokes in your subjective answers vs. guidelines. I wouldn't worry about specific points to award and move on!
I found this article helpful especially these messages 1) guideline answers are overkill - don't follow it; 2) to allocate half the time allowed to each question to writing the answer.
Glad you found it useful Pope G! I remember checking my answers on the constructed response part years ago and felt stressed, so thought we would remind candidates out there! Hope your L3 exam went well.