Oyster wrote:
Your explanation sounds like the unsubstantiated theory wherein someone claims that “if I suffered, then I want them to ensure that you suffer, too.” With that same notion, I (Level I Candidate) could also argue that the test was much simpler 10 years ago, when IFRS wasn’t around. I am sure the psychometric specialists took the whole GAAP vs. IFRS argument into account when going from four to three answer choices. The additional differences that Candidates have to commit to memory more than make up for the “lost fourth” choice.
BTW, having “just” three choices doesn’t make the test “simpler.” Also, do you have any data that shows that test lost its credibility following the change?
I guess I am being anal about this is because such developments (going from four to three choices, IFRS vs. GAAP, etc.) are bound to come into existence. If anything, I’d expect the current Charterholders, Candidates, and Members to embrace such changes, thereby, maintaining the value of the designation. The last thing I want is for the material and the exams to remain static for eternity. I could also argue that going from four to three choices saves time and energy - the question architects have to worry about three choices, not four. Between the additional material and the added productivity, I can see how three choices came into existence. Of course, this doesn’t justify/explain how the Institute markets such changes… maybe they can provide better explanations to convince the general audience of any impending radical changes.
First off, I didn’t suffer that much taking CFA exams. And I’ve spent way more time helping other people pass their CFA exams than I ever did passing mine, so the notion that I somehow want other people to suffer as I did is just totally off-base.
I do care about the credibility of the CFA credential. All I have is anecdotal data, but if you share with people that you might have to get a 58% on a multiple choice exam with only 3 choices people think that sounds pretty easy, even if that might not be the case. The not totally flawed logic goes…OK, you get 33% by chance alone then to pass you only need to know an additional 25% of the material so that means you really only need to get a 25% to pass this exam. In just about any body of knowledge getting the first 25% is pretty easy. That means that all a CFA charter shows is that someone learned the first 25% of material that is surely not the most difficult material in finance.
I hate that kind of argument and hate having to rebut it. Why does CFAI do that to all of us when they could just add a fourth multiple choice option and make the exam like SAT’s, GRE’s, GMAT’s, LSAT’s, Series [blah] exams, (and probably a bunch of other exams I have never looked at)? Saving effort in test construction doesn’t move me at all. Constructing this test is just not that hard and CFAI gets tons of money for it.
There is no way that moving from four choices to three “maintains the value of the designation”. There is just not one thinking person on the planet who thinks that makes the exam harder or more relevant. I completely support having an ever-changing curriculum that responds to new developments. You should know that adding things like IFRS vs GAAP also involves getting rid of things (e.g., pooled interest vs purchase accounting for mergers). I personally think that the CFA program needs to get with the times and put more stuff on the exams about credit derivatives and credit in general. You can reasonably be a CFA charterholder and know next to nothing about how CDS function for example when the CDS market is two or three times the size of the US GDP. That seems significantly more important to me than some of the FSA minutia.
