Thousands Fail First Level of the CFA Exam

Just 34 percent of the 35,000 financial industry professionals who took first section of the Chartered Financial Analyst exam this spring passed, which represents the highest failure rate since the test began in 1963, Dow Jones reported. The usual pass rate hovers around 52 percent for the first part.

Known as one of the most difficult exams, the CFA is routinely failed by finance professors and Wall Street veterans, and is seen as a badge of honor by those who do pass, Dow Jones reported. In the U.S., the only way for a Wall Street analyst to bypass the practical-knowledge section of a new mandatory exam is to pass the first two levels of the CFA.

Those who failed received a sharply critical letter last week from the CFA Institute, the nonprofit educational organization that oversees the exam and the CFA designation. CFA Institute's chairman, Theodore Aronson, and its president, Thomas Bowman sent the letter saying the 2004 results are indicative of a downward trend. They said the exam's grading hasn't changed, but the effort put forth by exam-takers has fallen off.

Over the years ... we have seen a steady decline in the percentage of CFA candidates who indicate that they are seriously preparing for the CFA examination, Aronson and Bowman wrote in the letter.

The CFA is a three-level examination offered over multiple years and it tests financial industry knowledge, covering topics from ethics to derivatives, Dow Jones reported. For the first 30 years of the exam's existence, the average pass rate for the first level is 52 percent. The results for levels two and three have not yet been released this year, but the average pass rates for those levels usually are 55 and 69 percent respectively, Dow Jones reported.

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