are you smarter than a new cfa charterholder? cfa society of minnesota michael g. mcmillan, phd.,...
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Are You Smarter than a NEW CFA Charterholder?
CFA Society of Minnesota
Michael G. McMillan, PhD., CFA, CPA
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Four Virtues of the CFA Charterholder
ETHICS TENACITY RIGOR ANALYTICS
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Total CFA Registrations & MembersMay 2009
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May 2009
New Candidate Enrollment
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June 2009 Exam Results
128,506 registered candidates from 163 countries; 104,116 sat for the exam
182 exam sites worldwide in 89 countries
19% no-show rate (10-year average of 25%)
Overall pass rates (weighted average 45%)
46%: Level I (44% avg. from 1964-2009)
41%: Level II (49% avg. from 1964-2009)
49%: Level III (64% avg. from 1963-2009)
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Charterholders and Candidates
As of 22 March 2010, there are 139,701 candidates registered for the June 2010 CFA exam (all 3 levels) worldwide.
Over 62,000 candidates are projected to register for the December 2010 Level I CFA exam. Currently 11,637 Level I candidates are registered for December.
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Candidate Enrollments(December 2009 and June 2010 exams)
U.S.54,650
Canada15,787
Singapore6,482
U.K13,081
P.R. China22,387
Hong Kong10,028
Korea8,594
Taiwan2,568
Australia5,148
Latin/South America
3,309
South Africa2,846
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2011 Registration/ Exam Change
Effective 1 January 2011, a valid international travel passport will be required for CFA Program enrollment and exam registration. This will apply to all candidates.
This means that a passport will be required to register for the exam and to be admitted to the testing facility.
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First CFA Exam, 1963
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Today’s CFA Exam
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The CFA® Program
A graduate level program that takes a generalist/foundations approach to investment analysis and portfolio management and emphasizes the highest ethical and professional standards for the investment profession.
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A Practitioner Driven CFA Program Process
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The CFA Program Cycle
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Bodies of Knowledge
CandidateBOK
PWMBOK
CIPMBOK
Frontier (emerging)
Global Bodyof
Investment Knowledge
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Purpose of Practice Analysis Process
To ensure the continuous development of the Global Body of Investment Knowledge (GBIK)
GBIK: The comprehensive outline of mainstream knowledge for the investment profession, encompassing an entire career – novice through expert – for both generalists and specialists.
To identify the relevant content for the CFA Program Candidate Body of Knowledge (CBOK)
CBOK: The inventory of knowledge and responsibilities expected of the professional practitioner of investment management at the level of a new charterholder. It is the roadmap for the CFA curriculum development and is organized into four functional areas: Ethical and Professional Standards, Investment Tools, Asset Valuation and Portfolio Management.
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CFA Program Candidate Body of Knowledge
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Portfolio Management andWealth Planning
Investment Tools
Asset Valuation
Portfolio Management
Ethical and Professional Standards
Quantitative MethodsEconomicsFinancial Reporting and AnalysisCorporate Finance
Equity InvestmentsFixed Income DerivativesAlternative Investments
Ten CBOK Topic Domains
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Curriculum
The topic focus and learning focus differ at each level
Topic Focus Learning Focus
Level I Investment Tools KnowledgeEthical Standards
Comprehension
Level II Asset Valuation ApplicationEthical Standards Analysis
Level III Portfolio Management SynthesisEthical Standards
Evaluation
The curriculum at each level is organized into 18 study sessions
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Principles of Curriculum Development
Teach the knowledge and skills required of a generalist• Identified in the Global Practice Analysis• Defined by CBOK and DUO
Select, develop and regularly review materials that:• Are appropriate in a distance-learning environment for a global
candidate base• Are clear and accurate• Contain numerous examples/problems with solutions
Avoid curriculum materials that are:• Predominately empirical/historical in nature• Topical (current events oriented or survey articles)• Country specific and/or specialist in nature
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Custom Curriculum
Custom curriculum gives us flexibility to:
Publish only the pages of a reading that we wish
to require
Add pedagogy (examples, questions, problems)
where needed
Make improvements to readings based on practice
analysis
Update examples and scenarios to current
environment
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2009 Curriculum Changes
All MC and IS questions have 3 answer choices
• The fourth choice is often ineffective
• Exams are adequate samples of CBOK
• Time management is a factor in exam success but the primary objective is to determine mastery of the targeted KSA’s
• The Standard Setting process evaluates exam difficulty over time
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2010 Curriculum Major Changes
• Increasing proportion of curriculum developed by
CFA Institute
• Revision of Level I Equity Asset Valuation readings
• Revision of Level I and II Financial Reporting and
Analysis Readings for IFRS and US GAAP changes
• Expansion of Private Wealth Management
curriculum (Level III)
• Expansion of end-of-reading problem
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Standard Setting
• The objective of Standard Setting is to determine the score that represents acceptable competence or mastery of the concepts
• Conducted by independent psychometricians
• Group represents member and candidate demographics
• Each participant works independently to evaluate each exam question/answer
• Average score = recommended MPS
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The MPS Process
• CFA Institute Board of Governors (who are CFA charterholders) determines CFA Exam Minimum Passing Scores
• Primary input is standard setting
• Pass rate for each level is a residual determined by each level’s MPS
• Since 1996, the Board has considered performance on Ethics for candidates in a narrow band around the MPS
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Volunteer Opportunities
• Practice Analysis• Curriculum Development • Curriculum Review • Exam Development• Exam Review• Grading• Standard Setting
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Chartered Financial Analyst®
A Symbol of Integrity and Professional Excellence
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