Q&A with the CFA Institute

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Background[edit]

Various members from the CFA Institute have engaged with the online public in various Q&A's starting in 2017 held most notably via the AMA format located on r/cfa on reddit . Below you'll find the majority of the Q&A in easy-to-read format. Original source provided as well.

  • note: As the exam continues to evolve, we should weigh the more recent Q&A's more than the old as we cannot confirm that those answers continue to be correct, relevant or accurate. For this, we start with the most recent AMA.

Peg Jobst, Managing Director, Credentialing & Chris Wiese, Head, Examination Development / August 6th, 2020[edit]

Link to original post

Bio[edit]

Peg Jobst, managing director, credentialing, leads a dedicated and talented team to develop current and future investment management professionals by delivering a relevant, accessible, and standard-setting CFA Institute portfolio of programs, globally. For the last three years, she has served as head of exam administration and security, responsible for delivering a high quality testing experience for CFA and CIPM candidates through secure, equitable, and accurate administration and grading of the CFA Institute portfolio of exams. Ms. Jobst also serves as co-lead of the Future of Exam Delivery (FED) initiative, a multi-year, multi-stage transformation from paper-pencil exam administration to computer-based testing.

Chris Wiese is Head of Examination Development with CFA Institute and oversees the development of exams for all of CFA Institute’s programs and levels. Prior to Exam Development, Chris spent several years leading the Curriculum and Learning Experience department where we oversaw the development of curriculum and study products for CFA Institute programs

General[edit]


Question

are there any expectations yet of how CFAI will handle a US city not allowing the exam? Will I be able to switch my test location quickly? is there any expectation of when a city will be deemed cancelled? Example: I am registered to take in Ohio. If local authorities say it is a no-go, how late can I switch to Pittsburgh or another city in a different state?

Chris Wiese

In a situation like that we would allow you to switch test centers all the way up to exam day. But, we have to have an open seat at the center that you want to switch to.


Question

Hi Chris/Peg - thanks for doing this!

  • What kind of restrictions will be put on protective equipment; i.e., will it be like calculators where only certain forms are allowed? Specifically, will full-head gear be allowed?
  • Will the computer-based testing have real paper available, or dry-erase sheets?
  • How will water stations be handled for the Dec 2020 exam? (Since we have to take our masks off to drink water)
  • How will the cheating opportunity created by repeated questions be avoided when the exam is offered in a multi-day window?
  • The Dec 2020 will potentially have a much higher pass rate given the convincing arguments for postponing; should the pass rate be much higher than historical rates, are you committed to maintaining the historical relationship between curriculum mastery vs passing; i.e., not downward-adjusting this higher pass rate?
  • How do you envision candidates will write out formulas for the L3 AM portion?
  • Is there a non-zero chance that CBT will be available even for Dec 2020?
Chris Wiese

I'm not sure what "full-head gear" means, but we will have masks there for you. Closer to test day we will give more specifics about what to bring. We won't have real paper at the test center, but we will have dry-erase boards for you. There will be no water stations. Candidates will be allowed to bring water bottles. The way we are eliminating the cheating opportunity is that we will have many versions of the examination created from a large bank of questions. I don't understand the argument that the exam rate may be much higher in December. We are committed to maintain the same standard. We have psychometricians on staff who conduct a thorough analysis of each exam form and they set the cut score for each form so that the standard set for December is the same as the standard that was applied in the past. We don't intend to ask candidates to write out formulas on the essay portion of the exam. CBT will definitely not be available for December.


Question

Hi, I was planning on taking the exam this year in December 2020. if i take the example of U.K currently gatherings beyond 30 are not allowed. It makes me think it will be highly unlikely the government will be open to large gatherings in December assuming there will still continue to be outbreaks in winter especially. If the government still sticks to gatherings say max upto 30, will the CFA institute still accomodate by booking multiple venues? It is important to know what’s the threshold for cancelling exams i.e will the exam only not go ahead in the location if the government completely doesnt allow it ?

Peg Jobst

Absent government intervention, we will seek to find venues suitable for keeping candidates safe. As of now we are successfully securing venues and will continue to monitor conditions in each test center location.


Question

I enjoy PBT because we can mark, underline, highlight, cross-out, etc directly on the page to stay organized. Will the CBT have any of these tools?

Chris Wiese

There will be a CBT experience posted to our website in a few weeks. For now, I recall for sure that you will have the ability strike through some of the answers. But, I cannot remember off the top whether you can highlight or underline.


Question

When deciding whether December exams will take place, will this be state by state in the United States? are you going to try to assemble venues with lower numbers of people so there’s a higher likelihood that the exam may take place?

Chris Wiese

Guidance from each state will factor, of course, But, we will actually make those decisions on a testing center by testing center basis. We aren't trying to assemble lower number venues--there are a lot of challenges to that direction as well. But, we are honoring social distancing guidelines, which naturally reduces capacity at any given venue.


Question

The additional flexibility you are putting in place (shorter exam, different dates, etc.) could decrease the CFA value/recognition in the market. Could you share your thoughts on this?

Chris Wiese

We have put a lot of work into ensuring that the rigor of the examination will be maintained despite going to CBT (computer-based) and despite the exam being shorter. And, we have structured our policies and windows such that people cannot zip through the program much faster than they can now. My other thought on this is that going to CBT will allow us (in future years) to begin introducing question types that are more reflective of practice--such as interactive spreadsheets. Ultimately, we think this will enhance the value in the eyes of the market.


Question

Date for May exam? Trying to plan a wedding!

Chris Wiese

There will be a testing window in May that will run from May 18-May 29. Good luck with the wedding!


Question

What is the benefit of offering the exam more frequently?

Chris Wiese

The benefit to candidates is having more options for finding an exam date that works best.


Question

With the recent changes to the CFA examination, is the CFAI's ultimate goal to make the CFA a wide-spread "requirement" to get into the Finance industry and thus have widespread membership and to have everyone in the finance industry follow all the CFA standards (and demonstrate basic knowledge of industry standards) or is it to help distinguish those who pass a series of difficult tests that require a lot of discipline/then following the standards?

Chris Wiese

That is up to the marketplace. Personally, I would love to see us in a place where everyone in finance has earned the charter and is following the Code & Standards. To me, that doesn't mean making the test easier. It means holding the rigor and helping to boost people up.


Question

Do you anticipate the absolute number of candidates passing each level will increase each year due to increased testing intervals?

Chris Wiese

That is very tough to say. What I do know is that with the growth we've seen over the past decade that we were rapidly reaching the absolute limit of our ability to scale accordingly. This shift to CBT allows for continued growth.


Question

Will future exams be less expensive if they are taken online and should cost less to administer?

Chris Wiese

I'm afraid not. Our delivery on CBT will be more expensive for us to deliver as opposed to costing less. Think about it this way---rather than a single, massive venue and a single day of testing we will now have multiple days of testing in smaller, computer-based venues.


Question

Hi, I want to thank both of you for taking the time to do this AMA. Could you please give some insight into how you will follow regional guidelines? Under current conditions would the test be held in New York or New Jersey or anywhere in the US for example?

Peg Jobst

Hi. We are monitoring conditions on the ground including local and regional regulations, as well as insights from our testing venues, our local supervisors and CFA societies to ensure the best health and safety of our candidates can be adhered at each test center.

Follow up

Is there a surety of the exam in cities which have Corona pretty much under control?

Chris Wiese

We monitor closely because the environment can shift and we will respond accordingly. That has what has been so hard about the pandemic - we just cannot take anything for granted.


Question

Hi, if my country doesnt allow taking the exam in december, can i fly to onother country to take the test? If so, how early do i need to change the location.

Peg Jobst

You can take the exam in another country. You will need to consult the protocols of the country your are seeking to test in to ensure you are properly quarantined etc.


Question

When do you think go/no go decisions will be made and announced?

Chris Wiese

It is a "go" until it is a "no" and it is a "no" when the government says so.


Question

As charterholders, we are very much worried about the dilution of the charter value. Call it what you want, but making it easy just dilutes the value. How are you going to mitigate this? How do you think its fair to those charterholders who did the CFA in the manner that it was held all these years that ensured the rigidity, prestige and the quality of the charter. The change done is significant.. 2 sessions a year (and 4 sessions for level 1), shortened hours and computerised, all changes at the same time !! Also the possibility to finish the entire charter in 11 months if you start dec 2020!! How is it fair?!

Peg Jobst

Moving the exam to CBT in no way, shape of form, change the integrity or the quality of the exam. In fact, we will have psychometric statistics to ensure the quality and integrity are maintained. The fastest way through the Program for the rare individual who attempted it has always been about 18 months. Now that “fast track” is roughly 15 months. That is because candidates will not be able to register for adjacent windows. For example, a Level II candidate who passes the exam during the August administration will not be able to sit for Level III until the May 2022 administration. There is a one-time caveat to that with the situation created by the transition to CBT in the wake of COVID19. Thus, a Level I could conceivable sit and pass December, sit and pass Level II in May 2021 and sit and pass Level III in November. Possible. But unlikely


Question

Any changes to the scholarship requirements due to the recent changes? I was told earlier that individuals are no longer eligible to apply for a scholarship if they are currently registered for any upcoming CFA Program exam. Is this statement remains true?

Chris Wiese

This is currently true, but in light of recent announcements, we are continuing to evaluate related processes and may consider revisions.


Question

Will the December exam be shortened?

Chris Wiese

No. The December exam will be the same length as it has been for years. The reduced length won't be effective until our first computer-based testing administration in February.


Question
Peg Jobst

CBT exams will be held in all cities where we would traditionally host a paper based exam in the June window. However there will be additional centers for many areas based on demand and availability. So, for example based off of the 406 markets we plan for, currently there are 663 unique testing sites, in 507 cities, in 126 countries. We will be posting a sample list on our website very soon. Please check
https://www.cfainstitute.org/en/programs/cfa/exam/exam-updates


Question

Post registration for February 2021 CBT exam for CFA level 1, I am required to schedule my appointment by selecting a center and any of the available 7 days. Last date for scheduling the appointment is 22nd November. Rescheduling requires an additional fees. Currently there is only one center in my city and is very far away from my location. My question is , whether there's any possibility that a new center may be made available later on as a contingency measure due uncertainty of the COVID 19 situation OR are the centers which are showing up on the website ,at the moment, are final? Suppose, a new center is made available later on and I have already scheduled an appointment today itself at the current center, as it was the only center available and seats are on first come first serve basis. Will I be allowed to reschedule my appointment ? Also will I be required to pay any re- scheduling fees in that case?

Peg Jobst

It is unlikely that additional centers will be added for February exams. If you do reschedule your February exam you will be required to pay a rescheduling fee.


Question

Are the computer based test, adaptive i.e., what we see in GRE and GMAT?

Chris Wiese

No, they are not adaptive.


Question

I was registered for June'20. I've not re-registered yet. If I choose December now, would I get an option to shift to May until October or is it only for the folks already registered for the December?

Chris Wiese

No, the deferral options are a one time use. If you choose December now, that will exhaust your deferral option.


Question

I have seen your responses about December cancellations. My question is are there really no exam locations that can be ruled out at this point? Philadelphia has already ruled no gatherings of 50+ through Feb 2021. Will you be providing real time communication as locations become a no go for December? I think we would rather see 70 small communications as test centers become unavailable rather than holding back information to make one big announcement.

Chris Wiese

We understand some jurisdictions are currently limiting the number of people who can gather in one venue. The December exam is still four months away and a lot can happen in that time. We are preparing to test everywhere we can in the event those restrictions are lifted.


Question

Well I have a technical question, if you don't mind. I deferred my December exam to February successfully but the learning ecosystem doesn't display the right date of the exam; it's still set on the old exam date. Any way to fix this?

Peg Jobst

We will look into fixing this glitch. Meanwhile, the learning ecosystem reflects the relevant materials for the February exam.


Question

Planning on registering for the December Exam, any recommendation on the best courses I can take to study the content?

Chris Wiese

I would recommend looking at this page:
https://www.cfainstitute.org/en/programs/cfa/prep-providers


Question

Hi Chris, thanks for answering our questions. Just curious- are you South African? Thanks for all the effort you all put in. I think the CFAI has done a lot for all of us.

Chris Wiese

Thank you so much. And, no, my family is not from S Africa. Although, on a trip there I discovered that my surname is notorious in that neck of the woods. But, no relation.


Question

I would like to sit in December 2020 for the L2 (as I'am already registered), but I have to travel to Belgade in Serbia - the closest exam center to my homecountry Montenegro. What if in December I will have to obay 14 days of selfisolation in both directions due to crossing the border with Serbia (this measure is imposed for the last couple of months). Will the Institute allowe me at the beggining of December to pospone the exam for the May 2020 if necessary? Does Institute plan to develop CBT from our homes? (as that would be the safest way of testing for everyone)

Peg Jobst

You can reschedule your December exam to May anytime from August 20 to October 20th of this year.

We are not planning to provide online CBT from home for candidates as this technology is does not provide a fair and equitable test taking experience for all of our CFA Program candidates .


Question

Hi, as the exam is getting shortened to 4.5 hours instead of 6 hours, there must be less questions. Does this make the exams more difficult as candidates need to understand the material in greater detail in order to answer the fewer questions accurately? Will the MPS be impacted with the computer based testing compared to paper based testing?

Chris Wiese

Yes, there will be fewer questions. And, I'll point out that the average time you receive to answer each question will remain the same. I don't see this as systematically hurting or helping people. Yes, it's true you will have fewer "opportunities" to demonstrate your mastery. On the other hand, it may be the case that you'll also avoid some questions that you would have struggled with. The MPS may indeed be affected. For each version of the examination we will adjust the MPS so that the rigor is the same across all versions of the exam and over time from one admin to another. We are not targeting a specific pass rate. Rather, we are trying to make sure that a candidate would have an equal chance of passing despite which administration or which version of the test is taken.


Question

I am very interested in innovation and entrepreneurship as well as finance. Do you see a use for the CFA in an entrepreneurial space?

Peg Jobst

If you are an entrepreneur, you can certainly benefit from the solid financial acumen demonstrated by the CFA.


Question

Hi Will be any additional fees in terms of changing from Dec to Feb date for Dec Candidate

Peg Jobst

No


Question

"Not allowed items" inside the test center mentions "Desk clocks or timers, including Wristwatch". Are even the analogue wristwatch not allowed inside the test centers?

Peg Jobst

Analogue wristwatches are allowed. As are digital watches. NO smartwatches.


Question

Will candidates who don’t pass a May exam be able to register to retake the exam in August of the same year? For December 2020 exams, can we use current public health guidelines in a particular location as an indication of likelihood that the exam will not be canceled in that location? Will cancellation of the December 2020 exams in a particular location be based on country, regional / state/ provisional or municipal health considerations? For example, in certain provinces in Canada, some regions (municipalities) have been allowed to open while others have been held back. How will CFAI factor this into their decision making?

Chris Wiese

On your first question, no. There are no adjacent window opportunities. You would not have received results in time to register. The other question parts I'm skipping because we've answered them on other threads.


Level II[edit]


Question

If you write L2 in Dec & you want to write L3 in May 2021. Will early or standard registration fee apply?

Chris Wiese

The standard registration fee would apply in that situation.


Question

Will there be a way of getting the material of L2 as soon as we finish L1 in order to start studying due to the low time frame between december and may? Will it be available to buy at amazon but at a reasonable price?

Chris Wiese

The curriculum is always available for purchase on Amazon. You can even double up this year, given that we have frozen the curriculum which will stay 2020 for all 2021 exams


Question

Hi :) I cannot wait to register for Level 2 examinations coming up in May. My question is , are we going to get to choose our own exam date ??

Chris Wiese

Yes, provided capacity is available and you are selecting a date within the testing window. For Level II, the May options will be 25-29.


Level III[edit]


Question

How will the written part of the level 3 exam work once the switch to computerised testing takes place?

Chris Wiese

Personally, I think it will be easier. You will be able to type your response rather than hand writing it out. You will still be able to bring in a calculator. And, materials will be provided so you can work out calculations in writing. But, we will not ask you to build equations in as part of your response. Is that some of your concern?


Question

For L3 CBT is there going to be some mocks available in the candidate resources that will be able to simulate the real experience. Also, how far is the institute willing to hold the cancelation of a dec 2020 exam in certain areas due to the pandemic?

Chris Wiese

Not only will Mocks for LIII be available, we will make all attributes of the Learning Ecosystem available to LIII candidates next week! This will include the entire curriculum, flash cards and other tools. The Mocks will be loaded there as well. As far as December cancellations, we will plan to hold them until we are told we cannot in local jurisdictions


Question

Will the Level 3 curriculum for Dec 2020 be exactly the same for both May 2021 and Nov 2021 exams? i.e. no changes

Chris Wiese

No. The 2021 examinations will be shorter. And, the questions themselves will be different--as in, we aren't going to reuse those exams. But, the format, structure, difficulty level, etc. will all be the same.


Question

If I sit the CFA level 3 May 2021 CBT exam and happen to fail can I retake for following Nov 2021 CBT exam ?

Chris Wiese

yes


Question
Chris Wiese

Question

Thanks for hosting. Will the 2020 curriculum be applicable for the L3 May 2021 and Nov 2021 exams as well?

Chris Wiese

Yes--we froze the curriculum so 2020 curriculum IS applicable for all of 2021.



Lisa Plaxco, Head of CFA Program at CFA Institute / February 4th, 2020[edit]

Link to original post

Bio[edit]

I worked for 21 years in asset allocation research and portfolio management and have been with CFA Institute for 4 years heading up the CFA Program. I work hand in hand with other AMA alums: Chris Wiese, Peter Mackey, and John Veitch in our credentialing division.

General[edit]


Question

How is the CFA dealing with a flat/declining number of asset management positions with a growing number of charter holders?

Lisa Plaxco

This is very market dependent and also depends on what type of job you want. We have strong data that private wealth careers are growing world-wide and that some markets have growing job opportunities. This is a good time to be flexible in what you do or where you live, if you want to ride the wave into the future of the investment profession. I recommend that you review our Investment Professional of the Future site for more guidance on how to position yourself in this new era.
https://www.cfainstitute.org/en/research/survey-reports/investment-professional-of-the-future


Question

How does CFAI come up with the names of the characters in the problems? Do you get to be in a problem once you're a charterholder? Can I be in an ethics one?

Lisa Plaxco

We make them up, but we’ll take your suggestion under advisement! We have a global exam review team (non-staff) who vet all of our content, include people and company names, for inclusivity. We want everyone to see themselves in the vignettes (only as the good guys, of course!).


Question

Hi Lisa, Thanks for making yourself available. What is the CFAI doing to promote the value of the designation internationally? It seems like here in Europe that few people are aware of it's highly acclaimed status.

Lisa Plaxco

We have a robust international brand campaign. I am sorry to hear that you're not seeing that bear fruit in your area, but I have personally seen adverts up in London, Paris, etc. We consider it high priority to promote the value of the charter and educate members of our industry on why the charter matters for ethics, education, and professionalism.


Question

Is there anyway i can finish all levels without losing most of my brain cells ?

Lisa Plaxco

Alzheimer research shows that using your brain makes it stronger. You are welcome.


Question

What are some of the strangest career paths you've seen CFA members embark on?

Lisa Plaxco

Sky diving and personal shopper. No, not really. Most of the people who successfully earn their charter are pretty sure what they want to do. But now I know what I want to ask at the next mixer we host.


Question

What is your opinion of the CFA designations worth now, compared to what it was worth in the past? Do you see it becoming more or less valuable designation in the future with the rise of automation and machine learning/analytics?

Lisa Plaxco

I think that subject matter expertise is THE thing that matters most when automation increases. While rote tasks, including some lower level investment analysis, can be automated, a qualified, experience charterholder will be well positioned to add the insights that computers cannot. I welcome our robot overlords.

Follow up

Do you see the curriculum to include the requirement to understand simple coding? (i.e. Python). I think having the Big Data readings is a good first step, but I feel having computer/data skills is becoming quite important as well.

Lisa Plaxco

This is a hotly debated topic in our hallowed halls. We have 9,000 pages of content, so adding another topic will often have to be balanced by trimming somewhere else. Yes, coding is important (it was part of my job as a quant analyst), but it's easily learned elsewhere. For now, we're sticking with our proven, unique competencies in teaching investment topics. Ask again in a few years.


Question

Hi, any plans or measures for the increasing number of candidates taking up CFA so as to not dilute the status of the profession, given that from 2021 Level I will be held 4 times a year and will only attract more crowd? I know you can't tell others to not take up the course just because you're doing it, but will it be somehow compensated in pass percentages or otherwise?
This may be an unpopular opinion but I just wanted to get my point across...

Lisa Plaxco

We don't expect necessarily to serve more candidates, just to make the exam more convenient for the ones we do have. The exam is offered 4 times a year, but candidates will only be allowed to test twice per year. This is intentional and is also a natural result of the timeline for when results are released versus when registration is open for the next exam. A candidate failing LI in February will have the option to retake the exam in August or November, but not in May.


Question

Wondering if there's been any discussion of medical/family deferment for exams. My dad was diagnosed with cancer in March of last year and along with some other family my studies for L2 were derailed.
Being out the exam fee for something pretty much out of my control cause me to spend a considerable amount of time weighing whether or not to re-register this past fall. I realize the CFAI isn't exactly hurting for candidates and the fee might be considered nominal to many but there must be a small sliver of the candidate base that would be encouraged to continue their studies if there was some type of recourse in cases like mine.

Lisa Plaxco

Please review the deferral information by taking using this tool and then reach out at the end of it. We want everyone to have an understanding of our policies.
I am sorry for you and your dad. Let me know how it goes.
https://interactive.cfainstitute.org/deferral-refund


Question

Has the CFA Institute considered doing more thorough screening of candidates for cheating devices, similar to what they do for the Series 7 exam? They basically pat you up and down to make sure you don't have anything on you, which I would prefer so that the cheaters don't have an unfair advantage.
I have witnessed first hand people cheating during the exams (shuffling papers in a bathroom stall), and I'm sure it happens more than we'd like to think despite the strong emphasis on ethics. Seems the best solution is to make sure people don't have papers, phones, etc. on them. Obviously it is a logistical challenge to check each person.
Just wondering what your thoughts are on this issue.

Lisa Plaxco

There are security measures at the Prometric and British Council testing centers that are in addition to live proctoring and other standard security. We have a team focused on Exam Security that live and breathe this stuff.


Question

Hello Lisa! Do you see any reason why a person who studies bachelor's at university should get CFA l1? Say to increase the chances to secure an internship with bulge bracket IB firms? Does a L1 differentiate you from other candidates, and is it something employers are looking at?

Lisa Plaxco

We hear from our candidates and their employers across the globe that success on the Level I has value in demonstrating that you're on the right path. That's why our team initiated digital badges a few years ago, to give verified proof of that achievement.
When I was interviewing candidates for my investment team years ago, the CFA designation was just passing MBA as an important signal of competence for investments, rather than business more generally. It's even more true today.
My charterholder badge: https://basno.com/n7sbqmft


Question

In an interview, I was asked if June 2020 will be my first attempt at passing Level I.
Does the CFA Institute distinguish between candidates that pass the exams on their first attempt? Do you think employers should differentiate between CFA charterholders that pass on their first attempts vs those that don’t?

Lisa Plaxco

We feel that all passing candidates are equal. And all charterholders have equally established their mastery over the content. No prizes for getting there faster.


Question

Thanks for interacting. Is there any proposals or MoUs on which CFAI is working to have more exemptions for the chartered holders globally from the domestic similar (licensing/certifications) requirements. Like CSC in Canada.

Lisa Plaxco

We have a team focused on waivers and exemptions. They work with other credentialing bodies to secure those as charterholder or candidate benefits when there is overlap with our curriculum covering their content. We do see that expanding over time.


Question

Why isn’t the CFA curriculum modernized? In today’s world, we build models in Excel and largely work with automated software. Why isn’t there an aspect of the curriculum that helps you prepare for this? Why are we still using scantrons?
Not sure if this in your purview, but why is there such secrecy and opacity around scores/exam results? For example, I failed level 2 last year and the bar charts are incredibly unhelpful for me to see just how badly I did. I realize I can request further information (for a fee from what I understand -- which also seems wrong), but why not just be up front from the beginning? I also hold the CPA designation, and it's very clear when you study for the exams what the minimum score is for each test.
Lastly, one thing I’ve noticed is the CFA designation is not nearly as well known or marketed as the CPA designation. What is CFAI doing to increase awareness to those outside of the investment industry?

Lisa Plaxco

So many questions in your question! We revisit the topics annually through a process called “practice analysis”. The knowledge and skill items are reflective of current practice, based on that work; however, I agree that the format of questions on the learning and assessment platforms need to be updated. That is why we moved learning to a digital platform (and are about to do so with assessment at LI). That will allow us to reflect how people actually do their jobs during their study experience.
We use scantrons for multiple choice exams because they are more accurate than manual grading of these types of questions. After we modernize the types of questions in the future, you’ll likely see new grading processes.
We set minimum passing scores for a “just qualified candidate” through standard setting, which is why results are not (and will never be) instantly available.


Question

Is there any plans to expand the test dates for L2 and L3? For example December dates for both exams. It’s tough for people who take L1 in December to turn around and take L2 in June

Lisa Plaxco

We have no current plans to implement CBT at LII and LIII and do not expect to change the testing frequency while still administering the exam under PBT.


Question

Does the Institute have any plans to make it easier to get special accommodations for physical disabilities, injuries, or personal circumstances? The general consensus here is that the CFAi guidelines are so stringent that it comes off as uncaring.

Lisa Plaxco

I’d like to differentiate between three different classes of requests that candidates make when they find themselves in difficult circumstances. We have the most stringent requirements for granting deferral’s - based on medical, bereavement, military deployment, or pregnancy. Medical accommodations are next in line. Lastly, we are very welcoming to requests for comfort accommodations. Check out the tool to figure out what you want to request.
https://interactive.cfainstitute.org/deferral-refund


Question

What was the reasoning for increasing the frequency in which Level 1 is offered each year? Do you feel that dilute the merit associate with having passed Level 1 if a candidate can just write the exam 4x in one year? To add on to that, with the reduced # of questions, will questions become more difficult or will exam time be cut down?
Lastly, how do you feel the CFA designation is viewed outside of traditional investment professions/circles?

Lisa Plaxco

Defense of the value the charter is foremost. Many of our Credentialing team are charterholders, and this remains top of mind. We will not make changes that risk diluting the value of the charter.
With regards to the number of questions, the point is about accuracy of proving that a candidate understands the material. As a metaphor, if you have a sick kid, the thermometer package may tell you to leave it in their mouth for 1 minute. Leaving it for a second minute doesn’t provide additional accuracy, it simply annoys the child. Similarly, we have strong evidence that the 180 questions are ample to accurately assess a candidate’s mastery of the exam.
With the transition to computer-based testing, CFA Institute will implement a change in exam length. In February 2021, we will reduce the Level I CFA Program exam to 180 questions resulting in a proportional reduction in testing time.


Question

Trading forex on MetaTrader 5 platform qualifies for CFA Institute as work experience ?

Lisa Plaxco

We have an entire team on staff ready to evaluate your work experience. Go ahead and submit your work experience, and you’ll get a personalized response. The best way to think about the question is whether you are working primarily focused directly on the investment process, as opposed to sales or accounting.


Question

CFAI holds its members to high ethical standards. This is one of the reasons that I am proud to be enrolled in the CFA Program. Yet, there is still a lot of consumer fear around corruption in the investment industry.

Lisa Plaxco

I would encourage you to contribute to our ethics work around the globe. There are volunteer activities open to members and candidates in each society.


Question

Are pass/fail rates a global number or is the pass/fail rate applied at each testing centre? For example, could theoretically everyone from 1 testing center pass but everyone from another testing center fail? Or at each testing center do you bellcurve the MPS to target your passing rate.

Lisa Plaxco

Standard setting, which arrives at the minimum passing score, is a global exercise. If there were geniuses in one test center, then they could all pass.


Question

Some of us are working remotely as full time contractors providing analysis and help clients with their investment decisions. Is this type of work eligible for the 4 years of work experience requirement to get the CFA designation? Thanks

Lisa Plaxco

We have an entire team on staff ready to evaluate your work experience. Go ahead and submit your work experience, and you’ll get a personalized response. You’ve got a good shot with what you’ve described here, and they can work with you to refine your answers.


Question

How should one view the CFA vs going for say an MA or PhD in Finance?

Lisa Plaxco

An academic degree is very different from a practical credential. Both have value, but the CFA Program focuses directly on the competencies you will need to succeed in your career, not just the knowledge base.


Question

Would mortgage underwriting experience count for CFA experience? do you recommend the CFA for someone working in the mortgage industry?

Lisa Plaxco

I recommend the CFA Program for anyone who wants to understand the broad fundamentals of investments. I was an equity researcher early in my career. After taking the CFA Program, I found fixed income valuation deepened my understanding of the work I did in other asset classes. It builds.
We have an entire team on staff ready to evaluate your work experience. Go ahead and submit your work experience, and you’ll get a personalized response. The best way to think about the question is whether you are working primarily focused directly on the investment process, as opposed to sales or accounting.


Level I[edit]


Question

With the changes to L1, does this mean results will be instanteous?

Lisa Plaxco

Not at all.
We still will have to run a rigorous standard setting process after receiving raw scores. We will wait until all candidates have tested in a window and then run the process in a similar way to how it is done currently.


Question

Are there concerns that reducing the Level 1 exam from 240 to 180 questions and offering it 4 times a year will reduce the barrier to entry for the charter and result in the reputation of the charter devaluing?

Lisa Plaxco

You and me both! Defense of the value the charter is foremost. Many of our Credentialing team are charterholders, and this remains top of mind.
Firstly, candidates will only be allowed to test twice per year. This is intentional and is also a natural result of the timeline for when results are released versus when registration is open for the next exam. A candidate failing LI in February will have the option to retake the exam in August or November, but not in May.
With the transition to computer-based testing, CFA Institute will implement a change in exam length. In February 2021, we will reduce the Level I CFA Program exam to 180 questions resulting in a proportional reduction in testing time.
With regards to the number of questions, the point is about accuracy of proving that a candidate understands the material. As a metaphor, if you have a sick kid, the thermometer package may tell you to leave it in their mouth for 1 minute. Leaving it for a second minute doesn’t provide additional accuracy, it simply annoys the child. Similarly, we have strong evidence that the 180 questions are ample to accurately assess a candidate’s mastery of the exam.


Question

Now that test is being computerized, does this mean questions will get harder/easier depending on whether you answer correctly the current one or will it be set questions?

Lisa Plaxco

No, the exam will not be adaptive. You'll get the same #4 question irrespective of whether you answered 1-3 correctly or not.


Question

Thanks for doing the ama! I currently will be sitting again for the level 1 in June and was wondering how did you go about your retakes? Did you focus more on questions instead of reading or did you go over all the readings again? I look forward to taking it again and this time passing but until then I will be head down in my studies :) thanks!

Lisa Plaxco

Question

Good for you. Don't lose hope.
I took Level I and Level II for the first time without using a prep provider. I added a study prep course (at home, not live), which helped me to review in a different way. That complemented my reading of the ENTIRE curriculum.


Question

With the L1 exam moving to a electronic platform, how will this affect the results process? How quickly will the turnaround become; does the MPS get determined based on each quarterly exam?

Lisa Plaxco

Results will not be instant. We still will have to run a rigorous standard setting process after receiving raw scores. We will wait until all candidates have tested in a window and then run the process in a similar way to how it is done currently.
If you want more info, then check out this great doc:
https://www.cfainstitute.org/-/media/documents/support/programs/cfa/cfa-program-theory-meets-practice.ashx


Question

I received an Access Scholarship for the CFA level I exam in 2020. Would you consider giving us the chance to partake to 4 exams as well? I guess that would mean December and June 2020 plus February and May 2021. Any thoughts? I am quite tight on my MBA applications

Lisa Plaxco

Access scholarships are awarded annually. So there will be a new application opening In March 2020 (next month) for the 2021 exam cycle. They are reviewed and awarded in the fall for use in the subsequent year.


Level II[edit]


Question

Why do we need to have a degree before registering for Level II? I passed Level I of the CFA Program in December. I am not able to register for Level II in June because I graduate in May and the deadline to register is March 11.

Lisa Plaxco

Thank you for being ethical and following the rules.
Students are allowed to register for LI whilst in their final year, but the wise course is not to rush to the finish line. Rushing is not encouraged, because it conflicts with our intention of producing well educated, ethical, professionals. The program is designed to be a graduate level credentialing program that will be most useful for individuals with some (early career) experience in investment management. Retaining the information and making it useful in a future career is more likely if you have some experience under your belt.


Level III[edit]


Question

I've heard through forums online that the Level III AM exams are no longer being shared. Is that true? Was there an official announcement from this institute or is this just a rumour? If true, What was the rationale behind that? Personally found the past AM exams incredibly helpful in understanding how to structure the AM "essays".
Also, as someone who passed Level III in June 2019, I am incredibly curious about the actual exam answers for the AM exam. Anyway we can still request to get a copy of last years exam, similar to how previous candidates have?
Thank you!

Lisa Plaxco

Yes, you’re right that we may not do so. We have been distributing the actual exam to prepare candidates for the format, not for them to review the content as content changes over time. Sorry that this doesn't help you out... but CONGRATULATIONS on passing!!!


Question

Is there any plan to move to computer based exams for L3 in the near future? And any plans to conduct level 2 or level 3 exams twice in the year? This is going to be helpful considering people are mostly under employment and they want to accelerate the progression towards the charter.

Lisa Plaxco

We have no current plans to implement CBT at LII and LIII and do not expect to change the testing frequency while still administering the exam under PBT.
We are not eager to encourage rushing, as the real gold ring to seize is a deep understanding of how to be a well educated practitioner.


Question

There are people saying CFAI will no longer post Level 3 actual morning questions for 2019, is that true?

Lisa Plaxco

Yes, you’re right that we may not do so. We have been distributing the actual exam to prepare candidates for the format, not for them to review the content as content changes over time.


John Veitch, Director of Learning Design and Development / July 30th, 2019[edit]

Link to original post

Bio[edit]

I’m John Veitch, Director of Learning Content Design & Development at CFA Institute. I oversee the ongoing evolution and updating of the curriculum associated with the CFA program. I also work on the transition of curriculum content to CFA Institute's Learning EcoSystem (LES) and evolving content development to take advantage of the new platform.

My knowledge is of the CFA curriculum rather than of the CFA exams. I am happy to talk about the 2019 curriculum, and in more general terms about the 2019 versus 2020 CFA curriculum. I am limited in how much I can say about future projects and I hope you will understand.

General[edit]

Question

Can you provide any details about how we will see data science (AI/ML/big data) incorporated each of the three levels in the coming years? How should we expect the skillset of a newly minted Charterholder to evolve over the next decade? Will there ever explicitly be a computer science component of the CBOK, or will the materials focus on theory over implementation? Thanks for your time!

John Veitch

Great question and one we have been thinking about a lot. 2020 has a stand-alone Machine Learning reading and a new reading on Big Data Projects that provides a case study on sentiment analysis.
Emphasis in both readings is on understanding what ML can and cannot do, the techniques available, and when one technique is better than another.
No emphasis on programming per se. There have been talks about whether code snippets (in R or Python or even Excel) would be helpful additions to the curriculum from a learning standpoint. No interest in making code testable, only used to help learning experience.
We are starting to see that ML or neural networks, or Deep Learning are not the sole answer in investment management. Many of these pure ML approaches are unstable or highly sensitive to the datasets.
Lopez de Prado’s “Advances in Financial Machine Learning” makes it clear that idea generation is necessary even in the most advanced quant shops. Understanding the quant tools and how they can be applied will be an important area within investment management.
I can't say how the CBOK will evolve but I think our comparative advantage is on the idea generation and use of techniques rather than the programming skills.


Question

Once someone receives their Charter, what is the best way to give back to the community with respect to assisting you in curriculum evolution?

John Veitch

Wow! Thanks for asking that.

One way is to contact CFA Institute to become a volunteer. We in C&LE use these lists to develop new reviewers for readings and invite people to our Practice Analysis sessions where we evolve areas of the curriculum. We plan on doing more outreach in the future to get reviews of new readings relative to readings that have been replaced to benchmark how our evolution of the curriculum is proceeding.


Question

How do you see the increased use of cryptocurrencies impacting the curriculum in the future?

John Veitch

At present I don't see cryptocurrencies as having much presence in the curriculum beyond the few places they appear. This may change as these evolve but as a macro-economist I'm skeptical any government is truly going to allow private companies to print money. I actually have a short opinion piece on this when I was a professor at the University of san Francisco.
That said, Practice Analysis really guides evolution of topics like this.


Question

How do you plan on lowering the amount of "no-shows"?

John Veitch

We think the new Learning Eco-System (LES) is a truly engaging way of learning the curriculum content. My hope is that by making the learning path more engaging, providing more personalized feedback and integrated opportunities to study the material that there will be fewer candidates who don't feel prepared for the exams.

This is clearly not a magic bullet but I do think the lesson format and linked questions provide a more candidate-friendly learning environment. That's the feedback we are getting from the Level I candidates using the LES for the December 2019 exams.

John Veitch again

I was just made aware by a colleague that CFA Institute has another significant initiative designed to reduce exam no-shows.
Another way we hope to reduce the no-show rate is our plan to move to a computer-based exam for Level I in 2021. The exam will be available online four times each year, over a seven-day period. This will allow candidates more flexibility in scheduling and sitting the exam. This move will also increase the number of test venues and reduce the waiting time for results.
Here is a link
https://www.cfainstitute.org/en/about/press-releases/2019/cfa-program-digital-transition

Follow up question

Anyone else think this is a massive mistake?
4 times a year to write? How are they possibly going to keep that on lock down? People (Obviously) talk about the exam afterwards, unless they are making 4 separate exams, im not sure how well this will work.
Also, is there a finite amount of times you can write? or a period between each consecutive write (Ie, can only write 2x in 12 months)?
Uggh, I really don't want the Charter to turn into something EVERYONE has.

John Veitch

I’m sorry that’s what you think will happen. We are pretty astute about these things and so we are well out in front of issues regarding cheating. I also think you’ll rethink the impact on the value of the Charter when more specifics become public. At present we have test centers with upwards of 10,000 people on a single day. This is really the limit of what’s possible and brings its own sources of risk and cheating. People in the Institute who I really respect gave thought a lot about this new direction.


Question

Hi John, thanks for taking questions. Have you noticed a switch in career paths for charter holders? I’ve been reading a lot about how PE analyst roles are on the decline and the traditional finance/investing roles are becoming overcrowded. What do you predict the future trend will be in terms of job placement for those perusing their charter?

John Veitch

Hmmm, are you really asking an economist for a prediction? Can I give you three contradictory predictions?

I think that change is a constant in investment management and always has been. I think its important to look at your comparative advantage, what aspects of that advantage you can hold onto, and how you need to evolve.

Money is about trust. Trust is about skill and communication and empathy and mentoring. I have seen friends and students and colleagues who started out as analysts develop into portfolio managers and then into wealth managers. What made them successful was a combination of all these skills. I think there will always be roles - regardless of what they are called - for people with these skills.


Question

I was wondering how does the institute measure candidate success? Do you conduct any surveys/interview, to investigate whether the candidates are applying the knowledge and skills they’ve learned throughout the program?
Also, I heard Paul Smith mention there are plans to further integrate continued learning, can you share how the institute plans to further integrate professional continued learning?
Thank you again!

John Veitch

The short answer to your first question is that we do surveys of candidates after each exam but I haven't seen any comprehensive post-charter surveys of new members. This doesn't mean we don't do them, its just that new charterholders become the responsibility of another area.
We actually spend a lot of time with charterholders in developing what should go into the curriculum and this process involves charterholders of all vintages. So its more of an upfront process to ensure that we capture what the profession as a whole says is valuable. I'll describe the process in a bit of detail as it may be of interest, even though its a little off-point from your question.
The process for evolving the curriculum – either through revision or new readings – is a complex, forward-looking one. It begins with Practice Analysis group. This group is responsible for surveying developments in investment management by monitoring conferences, academic publications, practitioner conferences. They also conduct in depth surveys of members on areas of rapid change. As areas are identified for the curriculum Practice Analysis conducts a series of focus groups in an area to determine more specifically what current practice is in an area and what topics and competencies are needed.
Curriculum and Learning Experience (C&LE) work with PA in the later stages to develop LOS sets that capture practice. C&LE Directors then identify authors (practitioners and/or academics) and develop an execution plan for the revision or new reading. New material is vetted by the Director an internal stakeholders before going through 2 rounds of external reviews and revisions. External reviews involve both investment generalists and expert SME’s to ensure content is appropriate in terms of level, tone and testability. There is also a copyedit and Quality Review check before the reading goes to production.
New readings are evaluated again by our Curriculum Level Advisors as a further check on appropriateness and quality. The process takes a significant amount of time as you can imagine. For instance, we are currently beginning 2022 curriculum projects, that will go live in 2021, based on PA analysis conducted in 2019.
To answer your second point, the Practice Analysis group has spent a significant amount of time over the past year developing a "competency-framework" for job roles in vestment management including those required for an analysts, a portfolio manager and a private wealth manager.
This competency framework provides a valuable way to think about what depth by the CFA curriculum. It also highlights what competencies need to be developed to progress from analysts to portfolio manager to wealth manager. Taken as a whole, the competenmcy framework provides a very useful way to think about where continued learning slots in relative to your career trajectory. More depth in certain areas if you want to stay in a role, more breadth in certain areas if you are looking to evolve your career into a different role.
This competency framework provides a valuable way to think about what depth by the CFA curriculum. It also highlights what competencies need to be developed to progress from analysts to portfolio manager to wealth manager. Taken as a whole, the competency framework provides a very useful way to think about where continued learning slots in relative to your career trajectory. More depth in certain areas if you want to stay in a role, more breadth in certain areas if you are looking to evolve your career into a different role.
Its really a wonderful framework and I expect that this was what Paul Smith was referring to. Here is the link if anyone wants to check it out.

Follow up question

Thanks for the detail here, John. How does C&LE identify the authors who are best suited to co-author or update the relevant materials?

John Veitch

We use a variety of channels to find authors, reviewers and updaters for the curriculum.
We have a stable of authors that we have used in the past that often are our go-to's for new readings in an area or for updates to existing readings (often their own).
The Curriculum Directors and others in Credentialing rely on their networks throughout the industry either to write for the curriculum or to suggest people who might be good for a project. We also are right next door to University of Virginia and use them as resource at times.
We use the Practice Analysis and Practice Intensive sessions that we conduct as a way to identify potential authors and reviewers with interest and expertise in an area where we may have projects in the future.
We attend a variety of conferences in areas we are looking at developing content as well. We often meet potential authors or reviewers at these events.
We determine the viability of authors based on what the project outline requires in terms of expertise, experience, and analysis. We strive to reflect global practice in the curriculum and so we often rely on multiple authors to provide that type of global coverage.
Hope this gives you some idea of what's involved in becoming a CFA curriculum author.


Question

What's the funniest story you have?

John Veitch

At the moment posting the AMA, seeing comments pop on my phone but not on my computer! Slight heart failure as this is my first post.
My actual funniest story is how I met my wife (or rather how she met me) by sitting at "my table" in a local café for two days in a row. Yes, I was a Sheldon Cooper "just light enough, with a breeze but not too much,..." kinda guy. That all changed with my wife who has me completely figured out.


Question

Would you rather fight one horse-sized duck, or a hundred duck-sized horses?

John Veitch

I so hoped that you'd ask. I've been thinking about this answer since I saw it pop up on Chris Wiese's AMA.
100 horses the size of ducks.
Why? A horse-sized Duck would really just be an evolved dinosaur, so having seen Jurassic Park – uh, no thanks!
I’ve trained horses before, they follow a leader, and I would be considered the coolest Dad to have a carriage pulled by tiny horses show up to my daughter’s birthday party!


Question

Hi John, thank you for doing this. My question: other than ML, what do you see as an emerging industry trend that the CFA is trying to get ahead of? Is distributed ledger tech on the radar?

John Veitch

I'd say that the CFA Institute is really looking at ESG and its integration into minvestment management. The view seems to be shifting towards one of risk-mitigation with emphasis on climate change and traditional governance issues. We are also looking at the chanmging composition of asset owners - Private Wealth, SWF's, Pensions, Endowments - with their different needs and constraints. And of course Alts continues to evolve.
As Practice Analysis provides guidance as to industry practice, we will integrate changes into the curriculum. I know of a number of startups that are trying this approach to disrupt investment management.
As Practice Analysis proivides guidance as to industry practice, we will integrate changes into the curriculum.


Question

Hi John, thank you for doing the AMA.
In the L2, I have noticed that several formulas/conventions differ across the readings. Will it be possible to unify these in coming years? Just curious whether it is even possible and how does CFA look on this.
For instance, currency contract in economics use days/360 days (LIBOR convention) whereas in derivatives the effective interest is used.

John Veitch

We actually have an ongoing initiative to address inconsistencies across the curriculum and unify presentation of formulae across the curriculum. We are in the process of this alignment now.
Sometimes these "inconsistencies", however, are actually different conventions that are used in different knowledge areas. While it can be confusing, we keep these different conventions in certain areas so candidates are aware of the differences in practice.
Hope this answers your question.


Question

Hello from your old USF colleague, John -
I had a question not directly related to the CFA but rather on traditional college finance textbooks. Any thoughts on why do they have so little coverage of dedicated portfolio theory or cash matching? I have looked at quite a few and dedicated bond portfolios are lucky to get a page or two out of hundreds of pages on other topics. I know CFA began covering it a few years ago.

John Veitch

Hi Steve! Nice to hear from you.
I think that traditional finance books are written by academics (primarily) with little practice experience for students who have NO practice experience. I always thought that was the interesting (and exciting) difference about the CFA curriculum. Its really written to reflect practice by a combination of practitioners and academics (often as joint authors). Its why I started the program at USF as a CFA Institute Academic Program Partner (at that time).
Thanks for joining in. I am totally missing SF weather right now as its 95 degrees and humid here in Charlottesville!


Question

-What's your view on the breadth/depth of content of CFA curriculum?
-Do you believe it is better to reduce the breadth and increase the depth of contents?

John Veitch

The CFA curriculum is designed to represent a generalist view of what is happening in the investment profession and that, in my view is why it has been so successful. The level of difficulty arises from mastering the skills needed by practice, it is not an end in itself.
The CFA curriculum takes this generalist view of the profession and has evolved accordingly over time from its original focus on financial analysis to include portfolio management over the past 15 years and now towards asset owners such as institutional investors and private wealth. We focus on the competencies involved in each of these areas as seen by the investment profession – through our continuing Practice Analysis outreach.
Personally I believe moving away from an "encyclopedic" approach to listing everything in an area towards a focus on developing understanding, intuition, and competency in major areas is a good direction. Note the breadth is still there and depth is developed in the important areas.
I realize that doesn't quite fall into the choices you set out, but its really my personal opinion given my years as an Economics professor.


Question

Hi John - As a Charterholder, currently doing their level II CAIA exam preparation, I was wondering if you could discuss any initiatives with other credentials that CFAI is working on? I am also aware that Charterholders can skip level I of the CMT exam. Thanks!

John Veitch

This is a little outside my area of expertise but I'll pass along what I know. This idea of "stackable" credentials and "multiple learning paths" is one of the priorities of the Credentialing area within CFA Institute.
I am not the one to ask about other initiatives with other organizations as my role doesn't really encompass this. I lead planning efforts for the curriculum (for CFA, CIPM and Investment Foundations programs) but I don't have a role in the strategic aspects like this.
Sorry I'm not able to provide more information on this at the moment. I'm going to check and see if I can come back with more info tomorrow.


Question

Thank you for doing this AMA. I've got 3 questions for you.
Could you tell us what changes do you plan to introduce to the learning ecosystem before June 2020 exams, like more questions, study tools, etc. to help CFA candidates prepare for the exam?
I'm also curious about your opinion about using prep providers materials, like Schweser's, do you think that we should stick to the CFA curriculum and CFA portal only or is there still value added from using prep providers stuff (which is not that cheap btw)?
And finally, should we expect a lot of changes between curriculum from 2019 to 2020 (maybe some readings removed ;))? I'm asking especially about level 1 because not sure about passing this June :(

John Veitch

At Level I there are no big changes (as you will see on August 8). We dropped the Discounted Cash Flow Applications but distributed much of its content throughout the readings that were relevant and dropped duplicative material. All the Level I readings received updates to data and examples and of course the FRA readings were updated to most recent standards (mostly IFRS US GAAP convergence, revenue recognition, and lease treatment). So very few surprises.
I have always been a big proponent of using the CFA curriculum, even when I ran the CFA-SF Exam Review programs, as this is what the exams are based off. Its absolutely critical at Level III and probably Level II as well depending on your level of education. This is where the techniques are explained and illustrated as to how they might show up. At Level I, there is just so much material you are potentially responsible for that a Review program summary isn't enough.
I think that Prep Provider materials can still provide value-add by helping you with study techniques and boiling down the absolutely critical things you need to know. And if you are time-constrained, then they provide a way to prepare to some level.
I will echo an earlier comment I made - this is your chosen profession and we put huge amounts of time and effort into bringing you a curriculum that reflects what you need to know to enter the profession. You should take advantage of it.
I'd say our new LES really reduces the gap in terms of learning experience however. I am really excited about the LES and the potential it has for changing the learning environment. The LES becomes available for both Levels I and II this August.
The LES contains all the curriculum readings online, with readings broken out into shorter lessons that are more convenient, engaging and effective. Questions are linked to lessons and you can take these questions in the lessons to see how well you are grasping the material.
The LES integrates the previously available question bank and mock exams (three full exams at Level I) into the LES.
The LES allows for two study paths:
A standard path that allows you to move through the material in whatever way you choose
A personalized study plan designed for you after taking an assessment pre-test
A discussion board in each lesson to exchange comments and questions with peers. There is also a general discussion stream where candidates can communicate on broader questions.
Flash cards and a "games area" to engage candidates in the material.
With the new LES, each question is linked to both an LOS and a lesson. Answering questions within the LES has the benefit of producing rating of your personal level of mastery in an area. You are also directed to the area of the curriculum that relates to the correct answer. Your interaction with the question also changes the question’s rating which is then reflected to other candidates. In a word, there are direct benefits to you from answering questions on the LES and network effects from you and others doing the same in terms of helping us establish the rating of questions we produce.
There will still be the option to buy the curriculum in print form.
All candidates will have access to the e-curriculum that is suitable for several e-book readers.
All candidates will have access to PDFs of the curriculum readings for free through the CFA Institute website .
We are excited about the potential of the LES to transform the learning experience. We've been monitoring its use by the December 2019 Level I candidates and have been gratified to see that the feedback has been very positive.


Question

Hi John thanks for the wonderful job. I am just curious about the plan by CFA in incorporating Islamic Finance in the curriculum?

John Veitch

I know we’ve done a Research Foundation monograph on the subject. I haven’t seen any Practice Analysis in the area so I don’t think there are any near term plans. We take our cue from practice, so until we get guidance in this area we are unlikely to add significant content in this area.


Question
John Veitch

Level I[edit]

Question

Hi John, I am a Level I candidate. In what order do you suggest we study the material? Many of the CFA approved test providers suggest we leave Ethics until the end, Quantitative studies first, but when you are first learning the material, it is so confusing as in what order to study everything.

John Veitch

Wow. Such a hard question as it depends so much on your background.
Having said that I think that Quant - particularly Time Value of Money - is first on the list. I can see doing Ethics last but I'd probably recommend weaving Ethics in during the other topics with a quick review at the end. Some of Ethics really presupposes that you know things about markets and analysis that comes later in Level I.
Hope this helps.

John Veitch follow up

Sorry I answered this but my computer froze and didnt save my response I guess.
I'd suggest doing Quant first - especially Time Value of Money - and then weave Ethics into your study plan. Some of the Ethics situations really require knowledge about markets, analysis and decisions that you will learn throughout Level I. Then review Ethics one more time at the end.
I always found Ethics a relatively boring subject TO STUDY (Yikes! did I actually say that?) and this strategy allowed me to build knowledge while not getting burned out. Of course, everyone has their own view of the best strategy.
Remember that Ethics is an important topic on each exam, especially if you are close to the Minimum Passing Score. Finding a way to really master the material is a key aspect of a successful study plan. For me that was building methodically over the course of study with an in-depth review in the month prior to the exam.


Question

Hi John, thank you for doing this! For a CFA LI candidate what would be your best advice? And if there's any preparation materials, could you share with us? Thank you.

John Veitch

Level I for me is really about dedication. There is a lot of material and its asked in 240 bite-sized multiple choice questions. You have to put in the time and do the work. There really isn't any other way around it.
I ran the CFA Society of San Francisco's Exam Review program for 12 years, and my best advice is:
Start early, be disciplined and read the curriculum. :)
Review programs can help you get the main concepts but there is no substitute for reading and understanding the curriculum. Remember you want to make this your career, so establishing a strong foundation is important.
Sorry I can't provide an easier solution. As far as preparation materials go, the eCurriculum and LES provide complete coverage of what the exam can ask. But seriously, check out the LES if you haven't done so. I think its a great tool.


Level II[edit]

Question

I’m currently a L2 Candidate, and while reading both the L1 and L2 content from the curriculum, I missed the big difference in content quality between the two levels, specially in Derivatives.
Why is there such a difference? It made the material sometimes too convoluted. Is there a chance to redo that study session in the future for prospective candidates?
Thanks again.

John Veitch

A lot of the content difference between levels arises from our instructions about expected levels of mastery across the levels. We routinely look at material across levels to try to ensure a good alignment. Derivatives is an area we have looked at and in fact have deleted one of the readings at Level II and produced a two readings at Level III that we feel make for a better progression.
I can't talk about specific LOS but I can say that in 2020 we deleted the Derivative Strategies reading from Level II and produced two new readings at Level III to cover the previous Level III risk management readings plus the Level II Derivatives Strategies readings.


Question

Best tips for 2020 level 2 candidates?

John Veitch

Think of studying the curriculum in terms of modules of knowledge that can generate item sets.
This focuses you on studying content as a testable topic area rather than just going through the curriculum. It also starts you thinking about the type of vignettes and corresponding questions that you are likely to see. In my opinion the EORQ Item sets do a good job of getting you into this mind set., which is very different from Level I.
Beyond that, I don't have much to suggest. Level II is very analytical and how best to go through it depends as much on your education and work experience as anything else.


Level III[edit]

Question

I’d like to ask about the CFA online question bank. I can only speak for the L3 questions this year, and this is just my opinion, but on several occasions I encountered obviously poorly constructed questions. These questions would rely on specious logic, information not mentioned in the vignette, or have confusing wording. In the comments below the question when you can review the answer, many people would voice the exact same concern complaining about the question.

This was extremely frustrating as a candidate, as it seemed as though CFA institute was not putting as much care and attention into its practice questions as we do into studying for the exam. I have a certain expectation of quality from you folks, as I have noticed that the quality of questions on the actual exam over the past three years has been top-notch, with none of the issues from the practice questions.

My question: Have you seen some of the same issues I have described? How can it be improved? I also want to mention that the majority of the practice questions are quite good, and this applies to just a small percentage of them.

John Veitch

I understand how frustrating this can be.

We try hard to minimize these problems and have established processes to create and vet questions and answers. We have teams of question writers who work on the questions for each reading. These questions go through multiple rounds of discussion and review but inevitably in the 1,600 pages of curriculum questions (3,422 EORQs for 2020) and more than 3,000 practice bank problems (1,800+ at Level I) there will be errors.

If you think you have found an error in a question, or a reading, we have an errata process that is fairly easy to follow. You identify the error, provide a brief explanation of why you think it is wrong, and submit the errata inquiry. One of the members of the Curriculum team is assigned the errata, looks at it, provides a response to you directly, and then makes a change that shows up on our errata sheet. https://www.cfainstitute.org/en/programs/submit-errata

Using the errata inquiry not only benefits you, by getting you an answer as quickly as possible, but it benefits all the other candidates too.

We are working on our end to improve the process by building in more reviews of the questions and answers in the future. That said, we are always going to appreciate clearly stated errata for the questions that inevitably will slip through.

Follow-up

Thanks a lot for your response. Overall I think the new Learning Ecosystem is an excellent tool and I wish I had it when I wrote L1. Hopefully I never have to do another CFA practice again, but in the event I’m doing another lap of L3 I will certainly make use of that submission feature.

John Veitch

Thanks for your response. I'd encourage you to let other candidates know that the errata process actually works (I know because half the time I get the inquiry!). This doesn't stop the frustration but hopefully lets you know that we care as much as you about trying to give everyone the best possible learning experience.


Chris Wiese, Head, Examination Development / April 17th, 2019[edit]

Link to original post

Bio[edit]

I’m Chris Wiese, Head of Exam Development at CFA Institute. I’ve been with CFA Institute for 15 years. The majority of that time was spent working on the curriculum and candidate study tools, including eventually leading the Curriculum & Learning Experience department. When Peter Mackey retired I made the shift over to heading our Exam Development department and working with all the wonderful people who work so hard to write a rigorous, but fair exam. I am absolutely thrilled for the chance to talk with all of you, AMA!

General[edit]

Question

Why are currency quotes from the CFAI backwards to live quotes from say Factset/Bloomberg? For instance, CFA curriculum will note USDEUR as dollars per euro, while Factset/Bloomberg will quote that same pair as EURUSD?

Chris Wiese

Speaking very generally, you may come across things in the curriculum that appear at odds with what you see in practice. Sometimes that is because practice varies around the globe and we are trying to capture that variability.
That said, as somebody who used to oversee the curriculum I can say that I think our currency readings are a good example of an area where we can be doing better. I know my colleagues in Curriculum are always trying to improve the curriculum, but I don't know where we stand in particular with currencies. This won't help you for the upcoming exams, but I'll see if I can encourage them to look at this. That is, if they aren't already.


Question

What is the craziest thing you have experienced in the exam room? We all have stories.

Chris Wiese

I've visited many centers on exam days and have to admit I haven't personally seen anything particularly crazy. Tensions can be very high and candidates are very stressed so you do tend to see that come out sometimes as anger, frustration, and even tears.

I do remember a particular exam day where we were administering on multiple floors in a building and something like 20 minutes before exam start one of the elevators got stuck. Fortunately, building maintenance was able to get over there very quickly and get the situation resolved before the exam started, but you can imagine how stressed and upset those candidates were when the doors opened and they burst forth to get to the exam room.

The last thing I can say is the anger, frustration, and tears I mentioned earlier seem to me to come out most often in issues of identification at the exam center. Please, PLEASE, do not forget your passport on exam day.


Question

Why does the CFAI feel it necessary to often times attempt to trick the test taker with ambiguous questions or with unclear wording in the prompt? I feel like I often see bad questions that aren't really trying to understand the test taker's breadth/ depth of knowledge but are more so "gotcha" type questions. Is this something you guys are trying to address?

Chris Wiese

To be completely honest, I feel a bit badly when I hear about candidates feeling that way because we try very hard to avoid trick or "gotcha" questions. Sincerely. We try very hard to make sure every question is very clearly supportable by the curriculum. It is our view that the breadth and depth of the content already makes this hard enough. There is no need or desire on our part to introduce tricks.

And, acknowledging that despite our best efforts we aren't perfect, we take a lot of steps to get fresh eyes on exam questions before we use them. We convene focus groups with members around the world to help us make sure questions are clear, applicable, and correct.

I know it doesn't feel this way when staring down the barrel of 3000 curriculum pages and a six hour exam. But, I assure you that the folks on this side are deeply concerned with making the test tough, but absolutely fair. We have a standard to protect for the sake of making sure that the charter remains valuable to existing members and to you when you come through the process. But, we are quite happy to see people meet that standard and join us as members.


Question
  1. why can't we print practice questions from candidate resources? Most of us work at a computer all day and need a break from the screen. It's also a nightmare to have to scroll up and down to see questions, data, and answers. Not good for gauging question time. ( Edit: also the exam is on paper as well )
  2. why can't we see our specific results on previous exams. I'd love to know whether it was swaps, options, etc that I got wrong within"derivatives." Or on the essays, what specific sentence was I lacking that prevented a full credit answer?
  3. what is the retab process? I've heard various rumors about what actually happens, the most common being they just count up the points you were given to make sure it adds up which is a total rip off for the amount we pay. For $100 you should be able to have it re-graded from scratch. If you think that would push more people to submit retab, well then that's just more money in the bucket for the CFAI if all is working properly.
Chris Wiese

The first quesiton is outside of my purview, but to the best of my knowledge we do make at least one full mock exam available for download in PDF format. I believe there are additional mock exams available online-only and that in doing it that way they are able to collect psychometric data that helps them improve the questions over time.

On the second question, I completely understand the desire for as much information as possible. We do not go to greater levels of detail for a variety of reasons. One of the big reasons is exam security and trying to protect the exam from being reverse engineered if, for example, a group of people were to compare notes on right and wrong answers. We write a new examination for each administration, but we need to preserve the ability to reuse past questions in special cases. For example, if there were ever reason to believe one of the live forms were exposed in some way. All that said, we have tried to get better over time and providing as much information as we feel like we can and that was the thinking behind the new score reports we started using last cycle. I hope everyone feels like that was a step in the right direction.

Regarding the retab process, there is a bit more than just re-summing the points. We check for anomolies and make sure all was recorded as it was supposed to be. Our processes have gotten to be pretty accurate and efficient so it is true that a retab rarely results in an outcome change for candidates. I think we offer it because there are people that cannot believe they didn't pass and they want to feel like there is some kind of recourse for double checking. I cannot say I blame them, but, again, it doesn't tend to change anything. The $100 fee isn't a profit center for us, we aren't doing it to make money. To my knowledge it's in place partly to cover any costs for pulling all the documentation and double checking and partly simply as a disincentive because we know it doesn't tend to change outcomes and we cannot be in a position to double check every candidate's score.


Question (common reddit AMA question)

Would you rather fight a duck that is the size of a horse, or 100 horses that are the size of ducks?

Chris Wiese

Clearly a single horse-sized duck. Always have a single priority whenever you can.


Question

Is there a section that you have to get a certain score in otherwise you automatically do not pass? (e.g. you do great in everything but get below 50 in ethics, so you fail the whole test.) I’m thinking mostly about ethics, GIPS, and the asset manager code material.

Chris Wiese

No. It's generally only your overall score that determines pass vs. fail. The one exception is that for those people right on the P/F line, the Board generally elects to consider performance in ethics as the determining factor.


Question

As we all know, the financial analysis industry is more complex and has more moving parts than it did when the CFA program was first introduced. Thanks to where technology is at, more information is available at our fingertips for recall than ever before. Given where the field is at these days, what's CFA Institute's stance on splitting content into four or more levels and focusing the exams more on critical analysis than rote memorization?

Chris Wiese

These types of issues are always on our minds. There are no specific plans at the moment, especially regarding something like a fourth level. But, I guess I can say that I would be both surprised and a bit disappointed if in ten years time the CFA Program hasn't adapted it's content, and perhaps structure, to account for issues like you allude to, such as technology.


Question

Level 3 candidate here. Is it possible to delay giving the exam after having registered and paid for it. I am pretty sure I am behind in my preparations after having suffered an illness for a prolonged time that dampened my motivation level. Any advice from you would be much appreciated.

Chris Wiese

We have policies around the circumstances in which that can happen. To my knowledge, the types of cases that might qualifiy involve things like serious illness, death in the family, pregnancy, and military service.
I understand from colleagues' that we will be launching some clarifying content on our website soon that will help people self-evaluate when they might be able to defer to a future administration, but it sounds like it will be at least a few days before that's posted. Till then, I'd suggest reaching out to our Global Contact Center at info@cfainstitute.org to explore whether your situation qualifies.


Question

what video games do you play? Can those games be applied to the CFA?

Chris Wiese

I'm afraid I haven't touched video games much in quite a while. When I was into that, my all time favorite was the Doom series. I really hope that cannot be applied in some fasion to CFA.


Question

I am thinking about signing up for the next exam. I understand it is already difficult to cheat. How does the institute combat new technology?
At school, students have phones between their laps, sneak a quick pic of exams, and have an outsider feeding them answer over AirPods/Bluetooth earbuds [phone]. Are there signal interference devices at the exam locations? Perhaps, signal monitoring/receiving devices too?
By the way, on Netflix, I recently saw an episode of Boarder Patrol S8E3 (fast forward to approximately 7:00 min), some Chinese lady who had 3 different passports, customs found out that her real reason to travel was to take the CFA exam for someone else

Chris Wiese

Cheating is absolutely on our mind and we have a lot of measures in place, both obvious and not, to combat it. Following best practice I cannot comment on what those measures are. But, I'm really intrigued about that Boarder Patrol episode! I'll have to go check that out.


Question

Are the mock tests provided by CFAI prepared by the same people who develop the actual exam? Thanks!.

Chris Wiese

No -- they are developed by an entirely seperate group of people. Seperate groups helps us ensure we don't inadvertently signal anything about the live exam on the mock exam. And, to be honest, they are also a seperate group because they operate on a different timeline (the curriculum must be ready substantially earlier). But, they do operate using similar methods and they strive to be reasonably similar to the live exam.


Question

When is CFAI going to incorporate Microsoft Excel into the exam structure?

Chris Wiese

We have to walk before we can run. Getting on computer-based testing starting with the 2021 exams would open that door for us. But, before incorporating spreadsheets on the exam we are going to want to do a lot of preperation and testing to make sure we understand how to write good questions in that way.


Question

One question on my side, it seems that the multiple choice item sets structure has changed this year for L2 and L3..please provide more detail as the practice questions on the CFA website are still structured like the old item sets.

Chris Wiese

This year we introduced just a couple item sets that have four related questions rather than six. This should have no impact at all on how you prepare for the examination. It's just that the shorter item sets provide us a bit more flexibility in the selecting of testing topics while still conforming to the published test weights.


Question

In today's world, what does memorizing this much material to be tested on one day add to a future analyst or CFA charter holder? I passed my L1, there is no particular area where I feel challenging on its own,however, when adding all the topics to be studdied together and tested on the same day it becomes too much. I think with most professionals nowadays specializing in one or two areas, why do I need to be tested for everything at the same day? As long as the we have the understanding of the formulas and access to a computer What's the added value for my future clients? Any advice on tackling this specific challenge?

Chris Wiese

I talk to a lot of members and employers who would never want to see that changed, particularly at Level I, which is foundational. We conduct ongoing practice analysis where we engage with employers, members, and a wide swatch of industry participants to help us decide what should be included in the CFA Program. The program is intended to demonstrate your proficiency as a general industry professional and all the topics that are included are there because the industry says they are important. And, when the industry no longer feels that way then a topic is removed. I know it's tough, but that's one of the things that makes getting through it so valuable.
People often don't want to hear this, but there isn't a reliable shortcut that I know of. It takes study time and practice. For those that don't have a financial degree I might also suggest a class as offered by many of the prep providers.


Question

Keep it tough, Chris.. I lost an arm, a foot, and half of my teeth to get my charter.. Next in line must sacrifice even more, lol !

Chris Wiese

A very common sentiment. In fact, I honestly don't think I've ever heard a member say the exam is too tough.
I have heard, even from members, that the curriculum is getting too long. One of the things my colleagues in Curriculum & Learning experience are working on over time is getting better about evaluating existing content and either simplifying or deleting content as it loses its relevence. In other words, to have a stronger concept of a lifecycle for content in the curriculum. Even so, I would not expect drastic reductions.


Question

I HAVE BAD GAS...WILL I GET IN TROUBLE IF I FART A LOT IN THE EXAM

Chris Wiese

To be honest, I'm not sure how we would handle that. I guess it would be a case by case kind of thing. I'd like to think we would find a way to move you to the back of the room, if nothing else.


Question

What are the overall goals that you can share about membership over the next several years? How does the CFA Institute balance growing membership with ensuring integrity of the membership (to the extent that goal is important to the Institute)?

Chris Wiese

I think we would love for the industry to see us as a professional body. From that perspective, we would be thrilled if earning the CFA charter were seen by the industry as necessary for entry into the profession. And, for the membership to grow accordingly.


Question

i have concern about the preparation of Exams , keeping these 6 Books at a time parallel in your mind for this point i need your guidance how to to retain all at a time because preparing for another book you are going to start forgetting previous one but finally 3 to 4 books at a time can be retained after that the remaining stuff , i want from u to give techniques how to retain all.
Further to above i also observed for level 2 and level 3 why only exams are once in a year because all professional exams in the world don't have dates like this , after a lot of effort if someone can have miss-happening on the day of exam he should lose complete 1 year i don't think so it is fair with candidates .

Chris Wiese

As I'm sure you are well aware, you are not alone in feeling overwhelmed by the raw amount of material. I know this is a tough pill to swallow when you're working through it all as a candidate. But, I very frequently hear from employers and members that this is one of the factors that makes the program so valuable. My best advice is start early.
For what it's worth, I'll share a study technique that always worked very well for me. When you read a chapter, don't attempt the end of reading questions right away. Instead, proceed to reading the next chapter and THEN go back and do the practice problems from the previous chapter. I often found that putting a little more time between reading and practicing seemed to help me more easily uncover what I needed to review.
As to frequency of Level II and III, there are logistical constraints and other difficulties with trying to pull those exams off more than once per year--especially for Level III with the essay grading. We are still evaluating whether Level II and III should eventually move to computer-based testing, but I can say one of the potential beneifts we see of moving Level II and III to computer testing would be that we think we could accomodate more frequent testing. Our thinking on Level II and III will take at leave several more months before we are ready to say. For the moment, I can just say that such a move would be, at the earliest, tied to the 2022 exams.


Question

Another one for you. Is the level I AM versus PM divided into sections, like AM is ethics, econ, FRA or are all topics covered in both morning and afternoon?

Chris Wiese

On level I, both the a.m. and the p.m. sessions touch on all ten topic areas.


Question

I was wondering if you could suggest an effective revision strategy for someone who's going to finish the level 1 syllabus around the second week of may.

I will get around 1 month to revise and want it to be as rigorous as possible

Chris Wiese

I would suggest a lot of mock exams and practice questions to suss out where you might still be weak so you can focus your energy appropriately. And, I found it helpful to go through the LOS of each reading and ask myself what I know about the LOS. For each LOS, look at the command word (e.g., explain, describe, calculate, etc.) and ask yourself whether you feel you understand the concept to the right level.

When you take the mock exam, pay attention to time. You have 1.5 minutes to answer each question on the Level I exam --- pay attention to your pace.


Question

Hey Chris- thanks for fielding our questions! In your opinion, what would be one thing outside of the current CFA curriculum you feel candidates should learn during the CFA process?

Chris Wiese

I always hope that candidates come through the program with a deeper understanding of the industry and what it means to be a professional in it.


Question

Did you pass all 3 levels of the CFA as well?

Chris Wiese

Yes, I'm a charterholder. Before coming to CFA Institute I worked for a mutual fund company. The subject matter experts who work on the curriculum and who write the examinations are all CFA Charterholders.


Question

Are gel Pens Allowed?? With which coloured pen should we be writing exams in CFA L-1??

Chris Wiese

For Level I, please do not use a gel pen. Bring a pencil to the exam center. In fact, bring a couple just in case. A pen is fine for the essay portion of Level III, but for filling in the answer sheets on multiple choice questions you will need a pencil.


Question

Why do we have to use such crappy calculators which are also expensive compared to something like the Casio fx-991ES PLUS which is both cheaper with more functionality. It makes it feel like the cfa are very stuck in the past. Additionally to this the requirements for access arangements for disabled students seems incredibly onerous on the candidate e.g. 3 years for most recent diagnostic evaluation, when conditions are valid for life & certainly do not magically change in 3 years!

Chris Wiese

Sorry you don't like the calculators. We use the particular models we use because they meet our security requirements and we are confident the perform all the operations a candidate might need for the exam. There are probably other calculators out there that would also work, but we need to have a basic limit on the number of calculators we accept so we can be confident the proctors are well trained and consistent about what is allowed and what is not.
It isn't lost on us that calculators are old school and that they tend to collect dust after the exam. While we are on paper based testing there isn't a lot we can do about that, but as we transition to computer-based testing we will be evaluating more modern options.
Regarding your accomodations question--forgive me, but I'm going to avoid trying to answer that because it's outside my area of expertise. The one thing I do know is that the team that looks at those things tries their level best to be equitable and consistent.


Question

Do you feel like the CFA program is becoming more dilutive in value?
Are you worried about other designation programs in the investment space?
Favorite part of working at CFAI?

Chris Wiese

Why dilutive? I've heard people make the case that having too many members somehow dilutes the value. I feel the opposite--the more members the stronger the network and the more value.
I personally don't worry a lot about other designations in the investment space. I don't CFA Institute should ignore then, but generally I see them as additive to the value we bring.
Favorite things about working here are lifelong learning and networking. On the learning, it's critical that we stay on top of what is happening in the industry and so there are a lot of opportunities to make sure we stay sharp. And, on networking I can say that through engagement with both candidates and members that I've met so many neat people in all corners of the industry.


Question

I just wanted to ask a question that can we do any calculations or rough work that helps me get my answer beside the questions in the question book? Or we have to do it on the page that mentions “ Page intentionally left blank”

Chris Wiese

It is absolutely fine to write you calculations in the exam book. Just make absolutely sure you get your answer on the answer sheet. I cannot tell you how many times at the exam center I've seen candidates who wait to transcribe their answers to the answer sheet and then they're running out of time before they can get their answers recorded.

If you are working on Level III, it's fine to do you calculations in the answer space. Just make sure it's clear what you intend as your final answer.


Question

Hi Chris, do think CFA will remain relevant in the era of automation (artificial intelligence/ machine learning)?

Chris Wiese

My personal opinion is that the work of the analyst will evolve. Automation generally frees up humans to add value at activies they are best at. I do think analysts in the future will need to be more conversant in technology. I'm not sure they'll need to code, but I'm certain they'll need to be able to engage effectively with data scientists. I don't even know that is so far into the future; it feels like it's already begun in some corners of the industry.


Question

Is there any negative marking in CFA exams? Or can we just guess something if we don't know the answer?

Chris Wiese

No negative marking -- guessing does not hurt you.


Level I[edit]

Question

What went into the decision to move Level 1 to computer-based testing?

Chris Wiese

Three major things went into the decision:

  1. The persistent desire among candidates for more flexibility around when they are able to test.
  2. Paper and pencil is antiquated. We want to open up the flexibility to evolve into testing formats that are more like the on-the-job experience. In other words, we want the CFA Exam experience to be more relevent.
  3. We are rapidly reaching our ability to scale paper-based testing. There is a tremendous amount of logistical complexity in pulling off exam day with the number of candidates we serve. We can only do that efficiently, effectively, and securely for so long.

Money or income was not a determinant. I think that surprises people because we all tend to associate technology with efficiency and cost savings. In this case, computer-based testing will not be less expensive and, in fact, will cost us more. We will need to have greater numbers of smaller test centers and testing will be offered on many more occasions during the course of the year. All these things drive costs upward.

Question Follow up

What’s your response to concerns that flexible testing devalues the charter? In my opinion, part of the difficulty and barrier to entry compared to other certifications (CPA for instance) is that if you fail, you can’t hit it again next month.

Chris Wiese

Generally those questions revolve around concerns that people will be able to either immediately retest several times until they get through. Or, that they'll be able to zip through the program too quickly. There will be both natural and policy-driven speedbrakes in place to eliminate those possibilities. I cannot spell out what those policies will be yet because they aren't completely finalized, but they'll involve stipulations on how quickly somebody may schedule and retake the exam.


Question

What should I be scoring on the practice exams and practice questions to be comfortable going into the L1 exam?

Chris Wiese

There isn’t a direct answer to that because the difficulty level on the practice exams isn’t necessarily calibrated to the same difficulty level as the live exams. I would suggest primarily using the practice exams to identify your relative strengths and weaknesses. And, I would suggest using them to practice your timing because pace is important on exam day.
That said—if you’re scoring 70%+ on the practice exams then I think you can feel reasonably confident going into exam day.

Chris Wiese add-on answer

After a little more thought, I figured I would clarify this one a bit:

The practice exams are not meant to be exact examples of what you will see on the exam. They are best used as an indicator of where you might need to focus your study time. And, they're helpful for demonstrating some of the different ways a concept might be tested. But, they are ultimately developed independently of the actual exam and so the difficulty level may vary a bit even though they use similar development processes.


Question

Level 1 candidate here. I had a question for you. Are the CFAI website and book questions a good representation of the exam? I ask because during undergrad and even grad many times these samples would be like at a difficulty level of 5 out of 10 and then the actual exam was at 8 out of 10.

Chris Wiese

I've heard comments from candidates on this in both directions. I think that, ON AVERAGE, the practice exams are approximately the same difficulty level. But, there is a lot of variation in the difficulty of individual topics. For that reason you are best off using the practice exams to evaluate your relative strengths and weaknesses.


Question

I have another question related to the Level I exam. Many exam takers have said that the first level is intentionally harder than the rest to weed out those who don't belong in the CFA. Can you comment on that? Is it true or just a myth?

Chris Wiese

Myth. We do not purposefully make Level I harder. While the pass rates for Levels II and III tend to be higher you have to remember there is selection bias there since only successful Level I candidates move on. Also, I think a lot of people come into Level I that aren't as serious or motivated.


Question

Is there a passing score (or average passing score) for the Level 1 Exam for this June? Thanks.

Chris Wiese

The passing score is not determined in advance. After each administration we convene a group of subject matter experts to help us set a fair passing score for that administration.


Question

I am first time level 1 taker, I have already done more than 300 hours, to be honest there’s nothing new in this curriculum for me as I recently completed a Finance degree that covers all the concepts in the level 1 curriculum. However I found the practice questions a bit challenging because they require to memorize every little wording in the text.
I have heard that the CFAI has a set number of people they want to pass from each seating and what determines you passing is how smart you’re compared to the entire pack not necessarily you getting 60 or 70 percent. Please advise if this is true.

Chris Wiese

That is absolutely not true. There is not quota or limit. And, we do not compare you to other candidates when determining whether you should pass or fail. We only compare your score to the minimum passing score. We don't set a fixed passing score year-to-year because we write a new exam each year and the difficulty level can vary slightly. We are able to adjust the pass score in those situations to compensate. We also do not set a fixed percentage that we allow to pass becuase the general performance of candidates as a group can vary slightly year to year and whether you pass or fail should not and is not dependent on how well prepared other candidates are on exam day.


Question

I'm a first time L1 test-taker who had to defer exam from June to December of 2019 due to my firm making a huge transition to a new broker-dealer in the middle of my studies.
In general, what suggestions would you give for studying/practicing for this test being that you're somebody who is on the other side of it?
Also, if I were to pass in December (and get results in February?), would you suggest starting studies for L2 to take in June or would you wait the whole year until June 2021?

Chris Wiese

I would suggest giving yourself plenty of time. I think one of the major contributors to failing the exam is underestimating the time it will take to effectively get through the curriculum. I would also suggest focusing on the Learning Outcome statements and what they are really requiring of you. To calculate or explain something, for example, requires a bit deeper understanding than to simply differentiate between concepts. The LOS help describe the depth to which you need to be prepared on the content.
Regarding timing, I'd personally suggest waiting the extra year unless you feel particularly confident and you have plenty of time to study each week.


Level II[edit]

Question

I am a Level II Candidate. What do you think is the most common mistake people making going from Level I to Level II? I have been preparing similarly but have heard Level II can be a tough adjustment for some. Thank you for your time!

Chris Wiese

Yes, for some people Level II is a tough adjustment. The emphasis at Level I is to be able to recall and understand basic concepts. At Level II the curriculum and exam emphasize a higher cognitive level--analysis. Generally speaking, that means that at Level II, you will be asked to apply what you've learned to solve more complex problems. The reason we use item sets at Level II is to accommodate the testing at that higher cognitive level. To prepare, I would suggest that candidates practice. All exam questions are rooted in the curriculum so I would make sure you deeply understand the in-text examples and you work the end-of-reading questions and the mock exams. All these things will give you a sense for how we will test concepts.


Question

I am a Level III candidate I have 2 questions

  1. why are CFA Online study tool still publishing incorrect questions and answers, it is incredibly frustrating and misleading to students. It causes a lot of confusion and is not fair for the CFA to mislead us when our livelihood depends on these exams. It is a complete lack of care from the CFA.
  2. Why aren’t these questions from the study tool printable (it is not practical for students to spend all their time staring at PC screen after working all day, neither to waste time attempting to print this un print friendly formatted questions)
Chris Wiese

It's hard to comment on potentially bad questions in the online study tool without specific examples. I know for certain that the team would work to correct anything that is wrong, frustrating, or misleading so I'd encourage you or anyone else to reach out when you think you see an error with the practice problems. info@cfainstitute.org goes right to our contact center and they'll know where to route the e-mail depending on specifically what you are writing about.
Regarding printability, I think I mentioned in another thread that at least one of the mock exams is printable. They have additional mock exams that are not because online they're able to collect general performance data that flags questions that need to be fixed or improved. And, when you take practice problems in that Learning Ecosystem the data is captured for your sake and helping identify your strengths and weaknesses.


Question

I'm a level 2 candidate and the more I think about this process the more I wonder -- does going through the CFA examination make you a better analyst? It just seems memorization and testing. Has there been any thought at the CFAI to perhaps make Level 2, similar to Level 3 (i.e. add in an essay)? That seems to be a better way to test.

Chris Wiese

There was a time with Level II was tested using essay. We moved to item sets for a variety of reasons.<Vr>

I generally agree there are better ways for us to test many of these concepts. At the moment we face a lot of constraints in how we can test because we use a paper-based testing format. As you may know, we are planning a transition to computer-based testing for Level I (the transition is planned for 2021). And, we are evaluating whether we can and should do the same for Levels II and III in subsequent years.

We have a lot of reasons for looking at computer-based testing and one of those relates to how well the exam is representative of the work of being an analyst and portfolio manager. We aren't exactly sure yet what the future will hold, but being on computer-based testing would allow for the eventual development of other types of questions that are more like the on-the-job experience. This is a simplistic example, but we could, for example, do things like introduce spreadsheets for candidates to work on. While there is a lot of planning and testing to be done before we would try to launch somethign like that, and a lot that would have to be done to prepare canddiates for such a change, I'm very fond of the idea from the perspecitve of ensuring the program is as appealing to employers as possible.


Question

What is the biggest difference between the Level II exam last year compared to this year? Thank you Chris

Chris Wiese

I cannot comment on the selection of topics. But, I can point out that we are experimenting with shorter item sets. Last year there were 20 item sets with six questions each. This year we will have 18 item sets that are six questions and 3 item sets that are 4 questions. This doesn’t change how you should prepare. It just allows us a little more flexibility in selecting topics to test.


Level III[edit]

Question

Do you have any tips for how we can accurately grade ourselves on the CFAI Level 3 morning mock exams like we would be graded on the real thing? Are there any rules of thumb for getting partial credit?

Chris Weise

It is tough for me to generalize this with rules of thumb. While it is possible to get partial credit, there is some variation in how it is awarded depending on the structure of the question. One thing I can say is that if you're looking at PDFs we've posted in the past that provide exam questions and guideline answers you should keep in mind that the answers provided are merely one example that would have been awarded full credit. Also, we put a lot of thought into writing the text for guideline answers in order to try and highlight what we saw as the most important concepts to cover. But, your answers could receive full credit if they covered the same concepts, but in bullet point or phrase form. In other words, we are evaluating you on your knowledge of the topic and not on your writing ability. The most important thing is that your answer follows the instructions and specifically answers what was asked.


Question

On level 3, is it possible to get a question right by giving an explanation that is not necessarily in the guideline answer, but nonetheless is right/justified? Or, are you expected to rigorously stick to the guideline answers with no exceptions?

Chris Wiese

The graders come up with a rubric that attempts to account for a variety of possible correct answers. If we come across an answer that we had not previously considered then several subject matter experts confer and decide whether or not to award credit.

Follow up

To add to this question, if the response you write is 100% correct due to industry experience, yet isn't specifically mentioned anywhere in the CFAI text, will it be be graded incorrect.

Chris Wiese

It is conceivable if a panel of subject matter experts at the grading center agree with you. But, my advice would be to try and stick with responses that are in the curriculum.


Question

I'm preparing to take the Level III exam and I routinely find exceptions in practice questions (so far, mostly from third party prep providers). I've been working in finance for 25+ years and I find that my experience gets in the way sometimes. Specifically, I find real-world exceptions to many of the guidance answers. How does CFAI go about minimizing these real world conflicts for the actual exam? Also, any advice on how to handle these types of conflicts on exam day?

Chris Wiese

One of our maxims in developing exam questions is that the right answer should always be right and the wrong answers should always be wrong. Easy concept, but that can be surprising difficult when writing questions for a global audience. In Exam Development we try to identify all those exceptions by having many different people reviewing questions over multiple drafts. We have way more of those review and revise drafts than would generally be feasible for prep providers and even for our Curriculum team. But, we do it because the exam is high stakes and we get one shot at getting the questions well written wheras prep providers and our own curriculum can post errata and revisions over time.

If you uncover a question on the exam where you think we've overlooked a potential exception then I'd suggest focusing on application as was shown in the curriculum. Or, if that doesn't help then think about what is the most common general application as applied in practice.


Question

For the level III AM section, can you also provide any guidance on grading criteria for small errors. For example, if a candidate puts the decimal point in the wrong place, is missing the currency symbol on answers, or uses the wrong day count convention, how do graders handle these mistakes? Is it possible still to receive partial credit?

Chris Wiese

It's difficult to generalize and it depends on the nature of the "small error." A misspelling or typo probably isn't a problem. A decimal point in the wrong place probably is a problem. I would prefer graders to mark based on what is written and not wander down the road of trying to interpret what they think candidates meant to say. Yes, possible credit is possible and common.


Question
  1. Can I use a blue pen for the AM session
  2. If the question asks for a specific thing, and in the answer section, I write various formulas and calculations to help me figure out the question and help my thought process, and then write the answer below that, will that be okay or will the "first part" be counted as my answer and then my 2nd part get ignored?
  3. If the question says justify my answer, and then I write a long winded response which the first part is slightly off-topic (but not incorrect) and my answer is correct towards the end, will I get credit.
Chris Wiese
  1. Blue pen = yes
  2. You absolutely can write whatever formulas or calculations you need. Just be careful that you are very clear on what you intend as your final answer.
  3. If you write a long-winded answer with some off-topic material that generally does not count against you.
Follow up

Just be careful that you are very clear on what you intend as your final answer.
How would one do this? Circle the part that is their final answer?

Chris Wiese

Yes, I think a circle generally call attention to what you intend as the answer. Or, a simple statement, such as the answer is ...


Question

How strict are the graders for the Level 3 essay exams? Do we have to hit the exact wording/phases, or will the general idea generate full points?

Chris Wiese

You do NOT need to have exact working or phrases. The grading teams look for a variety of ways to say the same concept. Abbreviations and bullet points are absolutely fine.

Follow up Question

Also could you speak to policy on using abbreviations? ie, Is it assumed that writing HF means Hedge Fund, or do we need to establish Hedge Fund (HF) before we can start using acronyms like that?

Chris Wiese

We accept abbreviations and don't have a policy on them. If you are using a commonly understood abbreviation, especially if it's also used in the curriculum, then you should be fine. Just be careful because different parts of the industry may use abbreviations slightly differently and some companies abbreviate things in ways that aren't common throughout the industry.


Question

Hi Chris, thanks for doing this. What are the CFA guidelines when it comes to rounding calculations, especially during the AM portion of Level 3? Rounding can always end up giving a completely different answer and I’m wondering if points will be taken off because of rounding even though the formula was correct.

Chris Wiese

We have no specific guidelines for rounding. When we write questions we attempt to do so in a way that rounding doesn't matter in selecting the right answer. And, in cases where there are potential rounding issues our graders look at multiple ways to round.


Question

For Level III, are we expected to recall formulas from Levels I & II? I can understand if the formula is also in the Level III texts, but what if it isn't?

Chris Wiese

The three levels build on each other so there is no getting around the fact that you cannot forget what you learned and Levels I and II and hope to do well at Level III. That said, at Levels II and III we only test content that specifically appears in the associated curriculum.
Take something like a Sharpe ratio as an example. It is taught at Level I, but used through all three levels. We write quesitons that expect basic knowledge. But, for concepts where there are more detailed formulas, we wouldn't test it unless there were direct curriculum support at that particular level.


Question

Level 3 test taker. Can one assume that the entire AM session is question from the Portfolio Management Readings outlined by CFAI? If so, then one can assume that every other Reading will be geared towards the PM portion?

Chris Wiese

Nope. Don't assume everything in the morning session will be Portfolio Management. Any topic could be tested in either essay or item set format.


Question

For L3:

how important is the actual calligraphy of the written part in the AM section? My writing has gone from bad to worse making notes for this exam.

Chris Wiese

The graders are pretty good at deciphering handwriting. And, if they cannot read something they'll confer with others and try to get multiple opinions. But, don't rely on that. Write as clearly as possible.


Question

If an L3 AM question asks a question for a total of 2 points (2 minutes), and you provide a 4 word answer, is it possible to still score the full 2 points? Or would such an answer likely be too short?

Chris Wiese

Its a bit difficult to generalize for you across different types of quesitons so let me try to answer this way: brevity is generally in your best interests less because of grading and more because there is a time limit on the exam. That said, pay attention to what is being asked and let that be your guide. If we were to ask for something like a list (e.g., give us four reasons that...) then it's conceivable that a 4 word answer would work provided that your response is clear and correct. On the other hand, if the question asked you to justify something, it's hard to imagine that four words would cut it.


Question

I only have one question. does unintentional misspelled words in the constructive response affect the grading of the answer?

Chris Wiese

That would generlaly be fine as long as it is clear what you intended. We are focused on the content, not on writing, grammar, spelling, or penmanship skills.


Peter Mackey, Developer of the CFA Exam / June 13th, 2018[edit]

Link to original post

Bio[edit]

Peter leads a team of 23 employees at CFA Institute who develop the CFA exam each year. Before coming to CFA Institute in September 2004, Peter spent five years at the U.S. Treasury Department as Deputy Director at the Office of District of Colombia Pensions. Peter’s experience also includes 12 years as Director of the Office of Investments for the Federal Retirement Thrift Investment Board and a number of different roles at the U.S. Treasury Department. Over the years, Peter also has served as a guest lecturer on finance and investment performance at both Georgetown and American Universities and he also was an investment consultant from 1991 to 1994 for the U.S. Air Force. He has an MBA in finance from George Washington University and a BA in economics from Manhattan College. He currently manages 23 employees who develop the CFA exams each year.

General[edit]

Question

Hi Peter Can you speak to the difficulty of the exam over the years. In the early years where we saw very high pass rates, was the exam that much easier? Was the mps that much lower? Or were the candidates just a better sample since they were fewer and presumably a more focused group?

Peter Mackey

Initially the tests were more narrowly focused, primarily on equity analysis, portfolio management and ethics. Most candidates were practicing investment professionals in these fields. Tests were all essay. The nature of the profession has changed over the decades. Quant skills, behavioral finance, corporate finance were added. Competent practice now requires greater knowledge and skills than in the 60's. I took the exams in the early 80-'s. Derivatives then were basic futures and options. Other topics also simpler than now. Staff and Board have always done their best to identify minimum needs for competent practice in context of current environment. So, in that sense, it's always been the same standard.


Question

Hi Peter! Thanks for doing this AMA! Is there a wider dispersion of test scores at level 1 vs level 2 & 3? How much does the dispersion vary amongst each level?

Peter Mackey

don't have data handy but I think the answer is yes.


Question

Hello Peter. In terms of the exam and the candidates that preparing for the exam that is upon us, have you any advice for candidates in terms of what to really push on for the last few days? Thanks in advance.

Peter Mackey

get rest. On exam day, focus on reading all questions and case info carefully. AT LIII, be certain to specifically address the command words. manage your time.


Question

Hi Peter,
Perhaps you can settle a long-standing debate about how the MPS is set.
The CFAI literature indicates the use of the modified angoff method and then this MPS is "advised" to the board of governors. Does the board of governors make any curve adjustments?

Peter Mackey

Measurement experts (psychometricians) generally agree that the results of standard setting should not be considered to give a single point value but a range within which the policy body sets the final score. In our case, yes, the Board may set a score different than the midpoint or mean of standard setters judgments. But it is never far away.


Follow up

Thanks Peter. To confirm I understand correctly: A strong group of candidates or a weak group of candidates wouldn't effect the MPS up or down like it would grade in a university class?

Peter Mackey

correct

Question

Hi Peter, thanks for taking the time.
Is there already a plan on how the topics of the CFA curriculum will evolve in the future? (for example; less focus on defined benefits pension plans, more focus on algorithmic trading)
Are you considering to offer the Level 2 and 3 exams more than once per year?

Peter Mackey

curriculum is always evolving. We use a process called practice analysis to gather info and suggestions from practicing professionals and other stakeholders.
your input also welcome. send to: info@cfainstitute.org

yes, we are considering offering LII and III more frequently but I don't think anytime soon.
Also, the link below may help. It identifies and discusses recent trends in our profession. You can expect major themes to be gradually incorporated into the curriculum over the next several years.

https://www.cfainstitute.org/-/media/documents/support/programs/cfa/member-rated-key-industry-trends.ashx


Question

How is the pass rate determined for the CFA Exams? I have heard that everybody with a 70% has always passed. Is there a curve developed that effectively has that pass rate slightly lower? Also are all countries pass rates close to the aggregate pass rate or are there certain countries higher/lower? Effectively what I'm asking is that if the pass rate is 50% - would all countries be within 5-10 % of that?

Peter Mackey

Each exam is evaluated in a process called standard setting. More on that in our website article, The CFA program, where theory meets practice (see link below). The Board sets the cut score with their major consideration being the standard setting results. While we can't offer a guarantee, there have been few times in the last few decades where the cut score was 70% or higher. So if you can score a 70, you should pass. Same standard is applied globally but certainly country pass rates can vary.
https://www.cfainstitute.org/-/media/documents/support/programs/cfa/cfa-program-theory-meets-practice.ashx

Follow up

Could you expand further on the last part? I was under the impression that the cut score was applied globally. Are you saying the cut score varies depending on which country you take the exam in?

Peter Mackey

No. just pass rates will vary. This is because candidate cohorts vary in size, competency and preparation.

Follow up

To me, this is frightening, what if there are skews one year? do you guys eliminate outliers that magically score 90-100?

Peter Mackey

it's not a curve. standard setters evaluate exam content. Each standard setter makes an independent judgment whether they think a minimally qualified candidate will get the correct answer. Each standard setter's judgments are added up and then all standard setters total scores are aggregated. Standard setters receive training from an independent psychometrician to assist them in conceptualizing the minimally qualified candidate, and factors to consider (and not consider) in making their judgments. Fluctuations in the number of high performers does not affect the MPS decision


Question

Hi Peter, thanks for taking the time to do this AMA!
My question is quite simple. How do you really determine pass or fail in regards to percentages? My mock scores on reddit consensus have been regarded to put me on track to pass, but there isn’t a real bar in which I can fundamentally compare them too. What would you suggest is the best measure of “likelihood to pass” based on my practise scores? Or for anyone else? Best.

Peter Mackey

You should pass if you can score 70% or above, but again, no guarantees.


Question

it was said at the opening of the curriculum books that exam questions are based on the LOS. I only relied on the topic tests/EOC questions as well as cfa institute candidate resources practice questions and mocks to test my knowledge. Does that mean that third party materials are just some sort of enhancement as well as additional practice questions and that the questions are ONLY based on the LOS/curriculum topics?

Peter Mackey

yes

Follow up

Just to clarify LOS only? Some curriculum doesn’t correspond directly to a LOS.

Peter Mackey

Exam question writers are required to write each question to test one or more LOS. And they are required to demonstrate how the related curriculum content supports the question and correct answer.


Question

Do you base the questions for the CFA exams on the official CFA Program Curriculum books or do you use a different source?

Peter Mackey

solely on the CFA program curriculum


Question

With the inclusion of the new percentile rank, do you have any input to make it seem more relevant and valuable? I feel like I am scoring comfortably on there but am not sure due to the ability to reset sections. Do a large portion of L1 test takers typically take advantage of the online qbank? I’m wondering if that percentile is accurate regarding to who will be showing up on test day. Thanks!

Peter Mackey

The question bank that is part of the CFA Program study tools shows a candidate’s position relative to all other candidates currently enrolled in the course based on your practice question & test scores. 99 is the highest percentile ranking.

50% of the candidates use the Question Bank to take their mock exam exams, etc. We are working to increase this percentage.

The Question Bank percentile does not necessarily reflect who will be showing up on test day, as some candidates study without using that tool. It only shows how a candidate is performing compared to the group who took that exam in the ecosystem.


Question

I’m just curious and everyone else is, why don’t the CFA institute disclose the MPS that was required for every level post results being sent out? For example, Medicine students get the minimum passing score after they sit for their exams, I really don’t see why CFA won’t disclose them, transparency won’t hurt anybody!

Peter Mackey

Most programs that release scores are doing so on a scaled basis, not actual # correct. We are worried about candidates comparing scores and making distinctions among the successful; nature of a program like this is to identify the point where adequate competency to practice is demonstrated. We made improvements in results reports to help candidates see strengths and weaknesses more clearly.


Question

What was the thought process behind moving the date to late June this year?
Also, it seems like the grading time got extended as well. Any particular reason you could share with us?

Peter Mackey

It was done out of respect for candidates celebrating Ramadan


Question

I understand that Big Data and questions on Artificial Intelligence will be topics on CFA exams in the future. Do you expect a greater focus on Data Analytics and the ability to code be incorporated in CFA? A number of candidates I've spoken to have weighted before the cost/benefit of studying for the CFA vs. learning the ability to code. The value of the charter is still well recognized, but worry that later down the road, people will choose to spend the time to learn to code instead. What are your thoughts?

Peter Mackey

Link below may help. It identifies and discusses recent trends in our profession. You can expect major themes to be gradually incorporated into the curriculum over the next several years. Our treatment of these topics would be contextual and focused on the investment profession.
May I suggest that the decision on whether to build a skill set in investments vs. coding depends on an individual’s career objectives; and the two are not mutually exclusive (do you want to be an investment professional with coding skills or a coding professional with investment knowledge?). Thanks!
https://www.cfainstitute.org/-/media/documents/support/programs/cfa/member-rated-key-industry-trends.ashx


Question

Charterholder checking in! Quick question: many universities have explicit or implicit policies about battling grade inflation- where over time the level of grades gradually but steadily increase. Two questions: one) has the CFAI made an attempt to test for or measure grade inflation with the exams and two)if yes, does the CFAI have any strategy or stance on it? I think this is especially interesting nowadays with massive increases in new candidates over the past few years. Thanks again!

Peter Mackey

Fortunately, we are not subject to the same influences as schools and educational systems are subject to. Commitment on part of CFA Institute Management and the Board to maintain a fair and consistent standard over time is key.


Question

Appreciate the mammoth task in successfully running your exams across so many countries in different time zones. Please broadly indicate how you manage to pull it off each time and how long the preparation happens.

Peter Mackey

Exam development team spends about a year developing the next exams. Exam administration and security team is arranging venues and support resources continuously, planning for multiple years. Many other teams at CFA Institute, e.g., IT are also working year round to support the next set of exams.


Question

I have a theory that the cfai makes the exam then checks it based on using an open book and see if they can get the same answers using the book. And that is where the errata comes from after. The cfai doesn’t provide any of the old erattas that I know of to compare this to old exams. When you are looking at the errata are you looking at exam questions that they wanted to test but have thrown out. Can you shed any light on how the errata is created?

Peter Mackey

errata originate from many sources, mostly candidates, professors and prep providers working with curriculum. Exam writers also can identify issues and suggest curricula improvements but we are not the source for majority of errata.

Follow up

L3 fi was just updated. Which other topics do you think need overhauling? How does cfai go about deciding is there a long term plan?

Peter Mackey

Link below may help. It identifies and discusses recent trends in our profession. You can expect major themes to be gradually incorporated into the curriculum over the next several years.
https://www.cfainstitute.org/-/media/documents/support/programs/cfa/member-rated-key-industry-trends.ashx


Question

I hear that actual exam is better written and clear as also a bit easy compared to mocks and topic tests which are much tougher and lengthy. Is there any special criteria for the actual exam for bringing better balance

Peter Mackey

I would hope that is not the case but I will say that greater resources are devoted to perfecting the live tests versus the mocks.


Question

Level 1 June 2018 candidates. Are we allowed to take in two calculators?

Peter Mackey

yes


Question

Please indicate roughly how close one should be close to MPS for Ethics adjustment to come into play. Thanks

Peter Mackey

Not at liberty to say but it's a fairly narrow range. Not something you should be worried about going into the exam.


Question

Does the CFA Institute discriminate based on country? For instance, is a higher grade required to pass an exam in China than the USA?

Peter Mackey

no


Level I[edit]

Thanks!

Question

I'm sitting for lvl 1 in December and would like to enroll for lvl 2 the following June. The problem is my work only reimburses for the early registration amount.
My question is, can I tentatively register for lvl 2 before getting results of lvl1 so I can meet that early registration deadline and be fully reimbursed?

Peter Mackey

We hear clearly that there is a need to address this mismatch in schedules. We cannot allow a candidate to register before they pass the prior level, as eligibility is dependent on passing the exam and unfortunately success is uncertain. However, we are motivated to solve this problem for you and other candidates in the same situation


Question

Level I Candidate, any advice on how to manage to memorize all the functions and formulas for the test? In addition, Does the December session have a lower passing rate than the June session?

Peter Mackey

Focus on understanding the principles and concepts. Understand relationships among all of the relevant variables to consider in solving a problem. This should help you to set up and solve the problem successfully. Especially since we could ask you to solve for any one of the variables. You should not have to memorize many formulae.


Level II[edit]

Question

Hi Peter, thank you for doing an AMA again. I have a few questions. These are regularly disputed on here and hope you could add some insight.
Do exam writers aim to focus on core content? Especially for L2, it seems like there is a lot that can go untested.
Are mock exams purposely more difficult than the actual exam?
Lastly, I’m a fan of the new Qbank but does CFAI look at comments to see if questions contain mistakes? There’s conflicting information in there sometimes and it would be nice if an errata were made for those questions or just edited directly on the qbank.

Peter Mackey

yes, we focus more on core principles and concepts, which are always treated more deeply in the curriculum. Any exam like this is always a sample of content, though.
No, mocks are developed independently from the real tests but under same guidelines. Candidate surveys show opinions differ widely as to relative difficulty.
We definitely want your feedback on questions that you think are are flawed or unfair. Mock and actual exams.


Question

Level 2 candidate. What's your opinion on how comfortable candidates should be with the practice material given in order to understand how well prepared they are going in to the exam? (i.e. mock exams, online question bank, end of chapter questions). Or is there another way to gauge exam readiness?

Peter Mackey

no magic formula. I would focus on thorough understanding of curriculum and use all the tools you mention. Strive to spend 300 hours or so spread over 6 months or so. I know this advice is too late for the June exam but it sounds like you are well prepared.


Question

For level II, can there be multiple topics represented in one vignette item set?
For example, could there be 5 fixed income questions and 1 derivitave question in one item set? Expanding on this same logic, is it feasible that the minimum 5% weighting to derivatives could be achieved without having an item set fully dedicated to the topic (e.g. 6 derivative questions sprinkled in throughout different item sets).

Peter Mackey

We reserve the right to mix topics in a case, but we have done so only occasionally. We would like to increase that use of mixed item sets, as we find it to be beneficial to provide context and more closely reflect the work that a practitioner would experience. But at present that remains rare.


Question

will the structure of the Level 2 CFA Practice Questions & Mock Exams on the cfainstitute.org website be similar to the exam we will write?

Peter Mackey

yes, but question writing teams don't work together so don't expect to see same questions. Structural rules and types of items and curriculum sourcing are the same.


Question

I had a question regarding Mock B for Level II - the exam that was presented for both AM and PM sections did not contain a derivatives vignette (while there should have been 1-3 per the suggested weightings)? Was this intentional or likely an error?

Peter Mackey

At the time Mock Exam B was created, we had a dearth of derivatives item sets available. To put them on the mock would have meant no Practice sets. Mock exams and practice sets are always works-in-progress. As we progress, the topic weightings should be more proportional to the ideal weightings.


Question

Please provide your suggestion which of the below strategies to choose for last few days before L2 exam- Drilling questions/mocks or revising material again

Peter Mackey

Each of us is different. For me, I would get more value out of reviewing notes and study materials, especially in areas that I am weak in - assuming you have completed at least a couple of mocks.


Question

I start my preparation for cfa level 1 but I’m confused how to make my STUDY PLAN , hoe many hours should I give to my studies on daily basis , which study material will be beneficial for me . I will register for June 2019 and want to practice more and more questions so I build my confidence for cfa level 1 . Plz help me to come out in this confusion ?

Peter Mackey

some tools of CFA website may be helpful to you.<Br. https://www.cfainstitute.org/programs/cfa/curriculum/study-support
My suggestion is to allow about 6 months. More if you have no background in the content either from education or work experience. allow one week for each of the 18 study sessions and several weeks for review and practice tests. Talk to successful candidates in your area regarding possible local resources.


Question

My Co-worker and I are sitting L1 in December, given our current and projected workload we will only be able to study on the weekends. Do you think that this is a feasible structure to prepare?

Peter Mackey

Sure. You can only work with what you've got. Candidates report needing over 300 hours to adequately prepare, though, so it is a challenge for you.


Question

Hi. What is the recommended period of time a Level I candidate should study for before sitting the exam?

Peter Mackey

Depends on a lot of factors. We recommend 6 months. If you have strong academic background and or work experience in accounting, quant, or some of the other tough topics, maybe you can do it on less time. Also depends on your work schedule and other demands on yor time.


Level III[edit]

Question

Level 3 - There's been some disagreement over whether or not higher volatility necessitates wider bands. In past years, it seemed that More Volatility = Narrower Bands and that's the answer in all the 3rd party material. However, the 2018 CFA material is conflicting and the errata is largely unhelpful.
Here's the errata:
Volume 6
Reading 32: The coverage of volatility in Exhibit 8 (volume 6, page 92) is superseded by the analysis of it in the fourth and fifth paragraphs following Exhibit 48 in Reading 17 (volume 3, page 313).
We've all read the pages referenced in the errata, but have come away with conflicting conclusions. Also an answer in the Asset Allocation pdf says that More Volatility = Wider Bands.
What do you think?

Peter Mackey

Practitioners can choose whether to emphasize risk control (thus Higher Volatility = Narrow Bands) or cost control (Higher Volatility = Wider Bands). But for the purpose of the exam, the key is to understand the interplay of forces. The question should give guidance as to the key factor at play, and don’t let yourself get distracted by other secondary effects that are not explicit in the question


Question

Hi Peter, L3 candidate. With new topics in Fixed Income and Asset allocation and very limited amount of relevant questions to practice (no past exams), how would you prepare for these sections for June 23 Level 3 test? Thanks!

Peter Mackey

About a month ago we posted ~6 to 8 new item sets on those subjects in the question bank. Additionally, we posted several sets of PDF end-of-reading questions in the candidate resource section. Between the end-of-reading questions and the actual curriculum content, those are your best bet!


Question

We seem to have a confusion on how graders score level 3 AM exam.
If the question asks you to list 2 advantages of "x" , but you list 3 where one is incorrect, will you get full marks?
Asked in a different way, will graders only score the first 2 answers within in a list, and does the order matter?

Peter Mackey

In your example, the third advantage will be ignored by graders. We are looking for your judgment not a laundry list.

Follow up question

Ok, and just to be crystal clear for candidates.
List 2 advantages

  1. Correct answer
  2. Incorrect answer
  3. Correct answer


In the scenario above, I would score 1 out of 2 points, correct?

Peter Mackey

Correct.
and again, just to be very clear on this, we are looking for candidates to make the hard calls and tell us the factors they think are most important in the case, not list a bunch of stuff for graders to pick from.


Question

I was curious about abbreviating on the level 3 exam in the morning for time purposes - for example, will abbreviations such as $3mm instead of $3,000,000 or (E(r)-Rf) instead of Expected Return - Risk Free Rate cause markers to deduct points?

Peter Mackey

abbreviations are welcome. just make sure meaning is clear.


Question

Hi Peter, LIII has many new topics in Fixed Income and Asset allocation and very limited amount of relevant questions to practice (no past exams), how would you suggest to prepare for these sections for June 23 Level 3 test?

Peter Mackey

About a month ago we posted ~6 to 8 new item sets on those subjects in the question bank. Additionally, we posted several sets of PDF end-of-reading questions in the candidate resource section. Between the end-of-reading questions and the actual curriculum content, those are your best bet!


Question

Hello Peter, Two questions: What's been your most challenging experience while working with the institute?
For Level 3, How much deviation from the guideline answers can we take during the AM? Example, if we nail the theory and main points down, but didn't present it the "CFA way", should we still expect full marks? Any elaboration here would be great!

Peter Mackey

If you have an issue with curriculum treatment of a topic, we welcome your views. But in the meantime, we are focused on grading everyone in accordance with curriculum. If, post exam, you think there was a question where you offered an unconventional response or solution you believe to be correct, very important to let us know that. We will definitely accept alternative correct answers. We also analyze the stats and consider whether a question might be flawed if the pattern indicates unusual difficulty or confusion.
It was just this kind of situation that led to my most challenging experience. Several years ago, we received a complaint from a failed candidate after we published guideline answers. We looked at it many ways and had to concede that the candidate was correct. we awarded another bunch of charters many months later. I wish we had caught it ourselves and caught it much sooner. We caused undue pain to those candidates who should have and eventually did pass.

Follow up

So what is the timing of the release of published answers after the test? And is it on us to remember how we answered from memory so we can argue that our approach should be considered valid?

Peter Mackey

There was only one instance where the feedback we received after Level III guideline answers were published caused us to regrade affected papers. For Level III essay, 99+% of adjustments to acceptable answers are the result of post-exam candidate comments, analysis of stats for the questions (e.g., if only 20% of candidates got it correct, was it a fair question?), pre-grading grader reviews of the question and suggested correct answer, and thorough review of actual candidate approaches to answer the question (this occurs before and early in the grading session).
I strongly encourage you, though, when you are reading and studying the curriculum, to tell us if you see something you disagree with or believe to be incomplete. info@cfainstitute.org
I don't advise a strategy going into the test planning to answer questions based only on experience or other sources without regard to curriculum content.


Question

Some of the guideline answers on past L3 AM papers have an introductory section explaining the concepts involved before getting to the main bullets. I have mostly practiced my mocks by getting straight to the point and nothing else. I'm assuming this is what the exams are graded on?

Peter Mackey

you are correct. Guideline answers are written to support learning.
I will add though, that many LIII candidates fail because they do't give enough info. This doesn't mean you have to write a lot. Just focus on the command words. If the questions asks you to explain, support, justify something, make sure you tell us WHY you think what you think. Don't just repeat facts from the case. help the grader see why those facts are important to your answer or recommendation. Graders won't try and guess what you mean. Clarity in your head needs to be communicated. We want to see that you understand WHY an action should be taken or why some outcome can be expected.


Question

I feel that most candidates would struggle to complete the L3 morning session in the time provided. Are any special considerations made in designing the exam for those speaking different languages?

Any related comments regarding the intent of the written exam format?

Peter Mackey

Level III AM is the most critical exam section in terms of candidates needing to manage their time well. We will make every effort to accurately interpret the language you enter in the exam book. you don't need to say a lot. Just make sure you understand the meanings of all the command works we use and address those command words as directly as possible in your answers. see link to command words:
https://www.cfainstitute.org/-/media/documents/support/programs/cfa-and-cipm-los-command-words.ashx?la=en&hash=482D6535C2373F0210F1F50995910F3A3346A71D
All stakeholders consider these essay or constructed response-type questions to be very important to the profession.


Question

Any ideas on how to handle time management in the morning section of the level 3 exam. Is a silent stop watch ok to bring to the exam? Trying to touch each question in the morning.

Thanks for posting on Instagram about this by the way. That was pretty cool and that’s how I knew about this.

Peter Mackey

https://www.cfainstitute.org/about/governance/policies/cfa-exam-personal-belongings-policy
Policy on what you can bring in. I think you can only bring a regular wrist watch. No smart watches.
My advice is to review the question in its entirety before you start answering. Most questions will be multi-part, with x minutes (= point value out of 360 minutes/points for the day) specified for each subpart. Spend more time reading and thinking than you do writing. keep aware of your pace. Don't panic if you spend 20 minutes on an 18-point question but if you spend 25 minutes, think about skipping question parts that you don't know well and coming back to them. You don't want to waste time struggling with a question. Alternatively, be careful not to wast time by writing everything you know on a topic you are expert in, regardless of its direct relevance to the question posed.


Question

L3 candidate here. I note that Ethics material in the past L3 exams hasn’t been tested on the AM section. It is fair to infer that this trend will continue, Ie, will Ethics always be tested in the PM and not the AM?
Thanks for any guidance you can offer.

Peter Mackey

no guarantees but for many years, ethics has not been tested on the constructed response (AM) section. Team determined that the item set format is more appropriate for the topic.


Question

What common error do most candidates miss points on in the AM section of L3?

Peter Mackey

many candidate responses fail to directly address the question asked or fail to provide clear reasoning supporting their answer. Critical to read the questions carefully and to respond directly to the bold command words.
https://www.cfainstitute.org/-/media/documents/support/programs/cfa-and-cipm-los-command-words.ashx?la=en&hash=482D6535C2373F0210F1F50995910F3A3346A71D


Peter Mackey, Developer of the CFA Exam / November 2nd, 2017[edit]

Link to original post

Bio[edit]

Peter leads a team of 23 employees at CFA Institute who develop the CFA exam each year. Before coming to CFA Institute in September 2004, Peter spent five years at the U.S. Treasury Department as Deputy Director at the Office of District of Colombia Pensions. Peter’s experience also includes 12 years as Director of the Office of Investments for the Federal Retirement Thrift Investment Board and a number of different roles at the U.S. Treasury Department. Over the years, Peter also has served as a guest lecturer on finance and investment performance at both Georgetown and American Universities and he also was an investment consultant from 1991 to 1994 for the U.S. Air Force. He has an MBA in finance from George Washington University and a BA in economics from Manhattan College. He currently manages 23 employees who develop the CFA exams each year.

General[edit]

Question

What is the rationale behind asking questions hard enough to result in an MPS (well) below 70% -- vs. say an exam where the same "just at the MPS" candidate would score around 80%?
Also, does your team ever imagine there are some outlier candidates who can score 100% through skill alone, within the exam setting? Or are you envisioning the top 0.01% of candidates would still have gaps on a few questions?

Peter Mackey

we don't try to manage exam difficulty with precision. we couldn't if we tried. we just try and be consistent and fair in our processes.


Question

Do you think the value of the charter decreases as more people obtain it?

Peter Mackey

It's debatable. some charterholders view new entrants as competition for the same pie. My view is we are helping improve overall competence and ethics in practice. and I think the growing penetration actually enhances its value.


Question

Do you feel that the CFA institute is doing enough to address the changes that are rapidly occurring in the industry ( greater focus on passive investments, increased use of algorithms, etc..)? I'm curious if the institute will add additional curriculum or encourage greater emphasis on these shifts within the industry.

Peter Mackey

we have a natural lag and do not want to be in front orr at head of trends but we have a lot of new ideas coming into the pipeline in areas you suggest


Question

The industry has evolved a fair bit over the last few decades from a regulatory standpoint to the formation of new financial instruments all together. What is the institute’s view on mandatory exams to ensure that their members are up to date and with industry standards?

Peter Mackey

I favor mandatory CE. Mandatory recertification would be a very tough sell. Also, great variation in areas of practice and specialization make this a tough issue to get right.


Question

With the rapid expansion of interest and popularity of the CFA program, what are your thoughts or the Institute’s thoughts on offering the level 2 and 3 exams twice per year?

Peter Mackey

we will continue to consider. we are also looking at CBT delivery

Follow up

Wouldn't that take away from the prestige? ACCA recently started offering multiple exams a year and added CBT delivery for more exams and its value is definitely decreasing.

Peter Mackey

I'm surprised to hear that re ACCA. We will certainly tread carefully. Do you think paper and pencil will survive and is it appropriate given tech world you guys live in?


Question

What basis was used in determining that the June 2018 exam should be written in the latter portion of the month?

Peter Mackey

Ramadan observance, respect for world cultures and faiths.


Question

How many questions, on average, end up having two or all three answer choices considered correct due to complaints that they're vague, unclear, etc? Is it a very rare occurence, or are there some on every test, every year? Is it more common on one level than another? Are these questions brought to your attention by individual candidates complaining via the CFAI website, or are they detected by CFAI itself?

Peter Mackey

very, very few. We have no pride in crediting 2 or 3 answers as correct,. But I can't emphasize enough the effort and resources devoted to getting the exam perfect. We consider all candidate comments received in the week after the exam (there is a special email box for this) and we look carefully at performance stats as answer sheets are processed -we will examine carefully, e.g., questions where a third of candidates answered each choice or two choices each received close to 50%.


Question

I know most of the questions here relate to the CFA exam's preparation but I noticed from the moderator thread that you've had considerable experience at pension funds.

I was wondering if you felt the program aqeduately prepares one for work at a pension fund? I'm a soon to be graduate who majored in Finance, Insurance and Risk Management and am very passionate about retirement funding in particular. I worry that I might be overlooked for people who went for an actuarial qualifications as it seems like this is the go to way into working at a pension fund as a young grad. Any thoughts on where the CFA program might be lacking in terms of being particularly useful in pension funds, and any reccomendations as to how to break into this industry?

Peter Mackey

yes, I think CFA is great for institutional fund management, including pensions. Familiarize yourself with the work of internal investment staffs at funds (there is a lot of variation, e.g., many use consultants for heavy (investment analysis) lifting and focus is on selection and monitoring of external mangers). Actuarial work is very different than investment management.


Question

Thanks for doing this. Do you ever foresee a future where a CFA Level IV (or higher) Exam is required to obtain the charter?

Peter Mackey

Not discussed to date. I would not favor.


Question

How is the passing rate for a given level determined? What causes this to change over time?

Thanks!

Peter Mackey

primary input is standard setting process (again, this is a general best practice for professional credentials). we bring in 25-30 members, diverse geographically and functionally. They review every item on an exam and make an independent determination re whether a competent new entrant at that level will get question correct or not. Group spends about 2 days working under the guidance of an independent psychometrician. (more process description on website) Our goal is to set a fair and consistent standard across years. population will vary some. Pass rates have been quite stable the past 3-4 years.


Question

Do exam makers put any effort into making the actual exam questions similar to the current CFAI mock questions and topic test questions or are they not considered in the process?

Also, what are your thoughts on pass rates per country or region?

Peter Mackey

practice and live exam teams use same guidelines, processes and curriculum but work independently.


Question

What is the process for adding new and/or updating topics within the curriculum? How do you determine the level of which said topic will be introduced into the curriculum? Thanks!

Peter Mackey

process is called practice analysis. we are continuously talking with and surveying practitioners, employers, regulators...Level placement depends on fit with program design, e.g., a topic most relevant to asset valuation would likely land at Level II.


Question

Would you consider moving to a computer based exam interface, and if so, would you integrate/allow the use of excel on the exam?
I understand the fundamental knowledge is what is being tested, but wouldn't a test environment that more closely resembles real-world application of quantitative skills be more appropriate? (ie excel vs paper and pencil)

Peter Mackey

yes, we would. one of our concerns is whether we can keep up with industry practice with paper format. so, completely agree.


Question

So this has been a topic of debate among many of peers. At the Level 1, some say that the passing is based on an overall cumulative score of more than 70 while others say it is conditional on passing ethics i.e. a candidate would fail the exam if he doesn't pass ethics regardless of the overall score. Is this true?

Secondly, I would also like to know the quickest time in which a candidate can earn all three charters? Again, some debate you need 3 years experience in investment management decisions to be eligible.

Peter Mackey

In general, the "ethics adjustment" only comes into play for candidates in the immediate MPS area. MPS can vary from exam to exam based on standard setters, staff and Board evaluation of exam difficulty. In general, 70% will almost always be a pass at any level.
A candidate can get through the program in about 2 years minimum - Dec LI and the next 2 Junes. Charter also requires 4 years of experience connected to investment decision making. Much info on this on our website.


Question

What are your thoughts on 3rd party providers of abridged curriculum, like Schweser? Do you think reliance on these services could harm candidates?

Peter Mackey

While we do not evaluate them, most approved providers (see website) have done a good job with materials. Only source of test questions for writers is CFA curriculum but I have no concern with candidates supplementing studies with good, CURRENT prep materials.


Level II[edit]

Question

Have a couple of questions here: How to best prepare for the level 2? Based on CFA statistics, what's level 2 top 3 hardest topics? How many practice test best prepare for level 2? Thank you

Peter Mackey

surveyed candidates say derivatives, fixed income and ethics at II. I think 2-4 practice or mock tests is enough, plus other practice questions as you go.. I don't favor sacrificing studying for practice tests in the extreme. Learn the concepts and principles well; you will be asked to apply in different contexts than the practice questions you've seen.