The only plausible (and non-evil) argument I’ve heard regarding the one exam per year policy for level 2 and 3 is that there are not enough L2 and L3 candidates to justify more frequent exams. I was just checking out historical pass rates on the CFAI website and noticed something interesting. In 2002 (the year before CFAI moved to biannual L1 exams) there were 43,882 L1 candidates. In 2010 there were 43,406 L2 candidates. What I’m saying is that based on precedent alone, there probably should have been two L2 exams in 2011 and there really is no excuse for there not to be two L2 exams in 2012. Petition? Here is a link to the numbers: http://www.cfainstitute.org/cfaprogram/Documents/1963_current_candidate_exam_results.pdf
I’ll let you know July 26th.
One issue that I see is that you can get lucky and pass level 2 and level 3 because they have a much smaller portion of material than level 1 which covers everything (in a much more shallow way). On the left side of the distribution you can also get completely unlucky and fail by being given topics that you are just terrible at. The net result is that you need to be well prepared for the entire exam because you can’t afford to wait another year if you strike out. As far as the number of candidates taking the exam, I don’t think that would be a big issue. They already give the level 1 exam so the additional cost would primarily be generating a new exam and grading it. With Level 2 that is not a big deal. Level 3 requires them to get people to grade it and that take s a bit more effort. I wouldn’t be surprised if they started giving level 2 twice a year. But it won’t happen for some time. They take years to make small changes to these things.
ChickenTikka Your first point is, frankly, infuriating. Basically you are saying that the exam does a poor job of testing each candidate’s grasp of the material. Instead of fixing that problem, you instead think that its reasonable to pile considerable risk onto candidates so that some of them ‘do the right thing’ and learn all the material. I really hope CFAI doesn’t think as you do…
First off, this is just a theory, I’m unsure how sadistic the people who make the test really are. Not saying that it does a poor job of testing your grasp of the material. It does a great job. The questions are hard as hell. The issue is that they can’t test you in depth on the entire curriculum on exam day as it would take maybe 5 days to do. Instead they take a sample. Because it is just a sample you could get lucky or massively unlucky depending on what gets tested. One way they can prevent you from gaming the test is by limiting the amount of times you can take the test. This would appear to incentivize you to be well prepared across the entire curriculum.
This is a no-brainer. It was the only comment I gave in the feedback survey CFAI sent me.
ChickenTikka Wrote: > One way they can prevent you from gaming the test > is by limiting the amount of times you can take > the test. This would appear to incentivize you to > be well prepared across the entire curriculum. That makes sense. CFAI also has to think about the perceived value of the program.
They should limit the number of times you can sit a level, whilst offering biannual exams, thus conveniencing candidates, without cheapening the designation.
lmb Wrote: ------------------------------------------------------- > They should limit the number of times you can sit > a level, whilst offering biannual exams, thus > conveniencing candidates, without cheapening the > designation. limit the number of goes to how many exactly where you thinking? this may be perceived as unfair to candidates who failed t time but would have succeeded in their next go. this would also reduce their revenues massively…
I didn’t have a number in mind. But the exam is multiple choice which introduces an important random element, and some have expressed a concern that biannual exams would increase the number of unearned passes, cheapening the designation. Between capping the no. of attempts and wasting candidates’ time between attempts I prefer the former. Yes, revenues would be certainly take a hit in the short to medium term, and probably also in the long term too (though quality control is a sine qua non). Perhaps up to 3 goes at any one level, subject to a total of 6 across the levels (i.e. 3 fail credits spread out or concentrated)?
yeah… i think 3 is about right, besides… if ever i failed a level twice i would love it for someone to put me out of my misery!
Having two L2 exams per year will almost certainly increase the number of candidates, since some failers will sit for both exams in the same year (i.e., exam spam until they pass). However, I think the reason why CFA is not doing this is what they said: the marginally greater number of candidates is not worth the cost of administering an extra exam. I don’t think CFAI is very cost-efficient when it comes to exam administration. Training, cocktails and swag for graders alone probably costs millions of dollars.
ChickenTikka Wrote: ------------------------------------------------------- > …> Not saying that it does a poor job of testing your > grasp of the material. It does a great job. The > questions are hard as hell. … The questions being as hard as hell have nothing to do with the test doing a good job. If they can’t get a test to adequately test the material then they either need to pair down the material or get a better test. (or break it up into more tests)
Penny-wenny Wrote: ------------------------------------------------------- > lmb Wrote: > -------------------------------------------------- > ----- > > They should limit the number of times you can > sit > > a level, whilst offering biannual exams, thus > > conveniencing candidates, without cheapening > the > > designation. > > > limit the number of goes to how many exactly where > you thinking? this may be perceived as unfair to > candidates who failed t time but would have > succeeded in their next go. this would also reduce > their revenues massively… with bi-annual exams they could limit it to 4 times. If you can’t get a grasp of the material after 2 years of studying then I don’t think you are going to after another 6 months.
They will NEVER limit the number of times you can take the exams. does the word “revenue” ring a bell? In fact it’s in their absolute best interest to have people keep taking and keep failing. $$$$ and no-dilution of the charter… there is nothing sweeter than that
gik48 Wrote: ------------------------------------------------------- > ChickenTikka Wrote: > -------------------------------------------------- > > The questions being as hard as hell have nothing > to do with the test doing a good job. If they > can’t get a test to adequately test the material > then they either need to pair down the material or > get a better test. (or break it up into more > tests) Totally agree with this Gik48. I think chickentikka would prefer it if candidates were required to inflict some self mutilation before earning the charter. Of course nothing to do with investment management, but just to prove how tough you are…
Geez, thanks SFA. I don’t think I espoused any preference for masochism. Let me say that I am in favor of having the exam twice a year. I was just playing devils advocate in order to understand why they would not have the exam more than once a year. I probably explained what I was saying poorly as you didn’t really get my point. This is not me espousing a preference, but just making an observation. The exam tests a small sample of the curriculum. Because of that it is possible to not prepare the entire curriculum and get very lucky as far as what gets tested. Whole study sessions are not tested and lots of people try to guess at what will be and what will not be on the test. Because the test is only held once a year this is a losing strategy. You would have to get very lucky to successfully game the test. The once a year testing forces you to be very well prepared across every study session because can only realistically take the test a few times. Even if you were to get lucky at level 2 you would almost certainly not get lucky at level 3 as well. If, theoretically, the exam were held let’s say 12 times a year you could bet on taking the test enough times until you could get the right combination of study sessions and questions until you pass. Since this is not the case you have no choice but to be well prepared and really earn it. The test needs to test the depth and the width of our knowledge. From what I see I think the test does a pretty good job of seeing how well you understand the material. Personally, I don’t think it needs to be as strict as it is. I think there are lots of people each year that put in the time and deserve to pass that do not, but perhaps are a bit unlucky. So many things can go wrong on test day. Personally, I had a family member die a few weeks before the exam. That didn’t help. I wrote CFAI encouraging them to have the exam twice a year last night as a matter of fact. They wrote me back saying more or less that the process for level 2 and 3 is incredibly labor intensive and that they don’t have the bandwidth currently to do it and fear that quality would be diminished. I’m convinced that they take great care to sort out who deserves to pass and who doesn’t as best they can. Finally, if you have a better way of them administering the test, I’m all for it. I am not one to stand in the way of progress ever. Do you like the Super Furry Animals (SFA)? Oh and thanks for editing out calling me a “Dickhead.” 
you’re welcome 
I read the forum rules and thought that I had perhaps gone too far. It’s not that I don’t understand your argument. I just don’t agree with it. While of course infrequent exams create an incentive to be well prepared there are two major problems outstanding. 1) people who aren’t in a hurry to gain CFA charter can still attempt to ‘game’ the exam (evidenced by those people that keep rocking up year after year unprepared). 2) This is terribly unfair to well prepared candidates who have bad luck around exam time (car accident, get sick, family member dies, etc). My apologies for aiming an attack at you… The appropriate target should be CFAI… still friends?
also, my condolences for your loss. I had a family member diagnosed with leukemia (the bad kind) the week before the 2010 exam…
Yep, no hurt feelings. I don’t offend easily. And I am a bit of a d*ckhead, so that’s fair enough. My family member died of an acute form of Leukemia which required me to fly halfway across the world across 10 time zones which really messes me up. I didn’t get any studying done that week. If it had happened two weeks later it would have been unthinkable for me to even take the test. I know another chick who got dumped the week before the exam and was too heartbroken to really focus on it. So she failed it even though I know she prepped her butt off. So my point is lots of things can go wrong. Also there is a seasonal bias. Maybe your busy time of year comes in the spring, say you are an auditor or tax guy for example. So yes there is some sort of weird macho thing about the exam and it’s all or nothing payout. I am unsure if that is so necessary. I know it’s something that charterholders can be proud about but I don’t think it actually proves that you understand the material better.