CFA®Finance

How Does the CFA® Exam Grading System Work?

Before you decide to take on the Level 1 CFA exam, it would behoove you to understand the CFA scoring system. How is the CFA Exam scored? Can you earn partial credit for a question? How can you know if there is a possible error in your exam score? And what in the world is the Minimum Passing Score (MPS)? These are all good questions, and we are here to answer them for you.

Multiple-Choice

All multiple-choice questions on all three levels of the CFA exam are machine-graded. About 10% of exams will be re-graded by hand to check for inconsistencies and ensure the machines are grading accurately. During the grading period, the clarity and validity of multiple-choice questions may be reevaluated based on trends in results and complaints filed during testing. Any questions deemed unclear or invalid will automatically be credited toward your score.

Because multiple-choice grading is done mostly by a machine, results are typically available for the Level I and II exams within 60 days from when you took the test, compared to the Level III results, which can take up to 90 days due to that Level’s constructed-response component.

Constructed Response

The Level III exam essay portions are graded by an elite team of CFA Charterholders who meet in Charlottesville, VA, for two weeks to grade those questions. The graders are split into groups depending on their specialties, and each team will handle one specific question related to that specialty. A system of junior graders, senior graders, and graders that grade the other graders is put in place to ensure there are no mistakes. Thus, each essay is given as fair and level of a playing field as possible. Graders never see your name, your other responses, or even the grading center where you took your test.

Moreover, essays that fall in the middle 50% of the distribution of essay scores are graded a second time by a different person. This step ensures that if an essay is not exceptionally above or below average (in which case there is little need to grade again), it will receive a second look. If the first and second scores differ, it gets graded a third time, just to be sure.

Minimum Passing Score

After each round of exams is scored, an MPS is assigned. There is no way to know what the MPS will be since it changes every year and isn’t available to the public. So how is it decided? To determine the MPS for an exam, the CFA Institute Board of Governors (The Board) thoroughly analyzes each question on the exam. The Board assesses each question for its difficulty and makes an independent judgment of how well they would expect a “just-competent” candidate to perform on each question. The Board then compiles these analyses to determine the minimum score expected of a competent candidate, hence the MPS.

By this point, the Board has already determined the exams’ numerical scores, so it becomes merely a matter of applying the MPS to decide whether that score constitutes a passing or failing grade. Numerical scores are not provided to candidates, only a score report that indicates a pass or fail.

Score Report

Your score report will include a chart that shows your performance relative to the rest of the candidates who took the exam. A black dotted line indicates the MPS; a thick, dark blue line your score. If the line is above the MPS, you passed. If it is below the MPS, you did not pass.

You will also see a light blue box that extends above and below the dark blue line representing the likely range of scores you would have achieved given favorable conditions with a 90% confidence interval. For example, if the topics chosen for the exam had been a little bit more focused on your area of expertise, you could have had a higher score. On the other hand, if your dog had barked all night and you did not get a wink of sleep before the exam, you could have had a worse score. 

It is likely that regardless of favorable or unfavorable conditions, you would still score within that range. So, if you failed, but your confidence interval overlapped with the MPS, it means you were close and would have likely passed with a little more studying. But if you failed and the highest range of your confidence interval was still under the MPS, you’ll probably need to be significantly more prepared to pass the next time around.

Gaining Confidence in Your Exam Scores

Along with the nerve-wracking nature of the exam itself, there is much uncertainty surrounding your chances of passing it. You don’t know what the MPS will be, and you’ll be unable to calculate the number of questions you can afford to miss or what your margin of error can be. So how can you be confident about passing?

Relying on luck is never a good strategy, so really, there is only one answer: Confidence comes from preparation. The best way to know you will pass is to prepare thoroughly. The best way to prepare thoroughly is to study with a comprehensive online learning platform built for your success. 

Our Level I CFA Exam prep tracks your performance, provides access to the most relevant and up-to-date information, and is tailored to your unique study preferences. That’s why when you study with us, you will have everything you need to pass with confidence and earn your CFA charter.

Preparing for the CFA exam? Click here for a FREE trial of our Level 1 Online Learning Platform.