It’s common knowledge: CFA Institute puts emphasis on Ethics. What it means is that your Ethics score may effectively influence your final CFA exam result. And it’s true for every exam level.
What Is CFA Ethics Adjustment?
Ethics adjustment may have either a positive or a negative impact on your exam: it makes you either PASS or FAIL if your total exam score borders the minimum passing score (MPS) set for your exam.
if your total score is slightly below the MPS
high score in Ethics may cause you PASS the exam
if your total score is slightly above the MPS
low score in Ethics may cause you FAIL the exam
What if we tried to use a more practical measure to illustrate the problem?
but let’s assume that the MPS set for an exam is 69%. As a rule, you pass if you reach the MPS and fail if not. However, your Ethics score is in a position to adjust the rule. How? Take a look:
Assume you’re a CFA level 1 candidate. There are 240 questions in the level 1 exam. We know that all questions are given equal importance. If each question is scored 1 point, we get the total of 240 points. MPS of 69% gives exactly 165,6 points. However, there are no half points in the exam because you either get a question wrong or right.
To illustrate the Ethics adjustment, we assume you scored either 165 or 166 points in your exam:
165 points you’re below the MPS
but if your Ethics performance is strong you may still PASS
166 points you’re above the MPS
but if your Ethics performance is weak you may still FAIL
If you happen to be a borderline candidate, Ethics adjustment works either in your favor or against you. Having this knowledge you can deliberately decide how to go about Ethics during your CFA exam prep. Our way is to take it seriously. That’s why in our study plans we most often encourage you to begin and end your preparation with Ethics. To make sure it sinks in.
Top Secrets That Make A Difference
CFA Institute never:
discloses the exact MPS set for a given exam or how it is established,
releases any specific information on the Ethics adjustment:
neither the Ethics score required for the adjustment to be applied,
nor to whom it is applied,
nor how it exactly works.
You will never know if you were a borderline candidate or not, but it’s better to act as if you could be one. The net result is that the Ethics adjustment has had a positive effect on candidates’ scores, and exam pass rates, ever since it was introduced.