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FAQ Before Exam What is the pass rate for the FRM?

David Harper CFA FRM

David Harper CFA FRM
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Thread starter #21
Hi @Jaskarn There is a huge difference this year: In December GARP basically did not change the syllabus, with the exception of again rotating 100% of the current issues (a practice that I am on record opposing, but T9 only weighs 10%). Since I started teaching the FRM over a decade ago, GARP has never done this before, the churn was always at least 25% often nearer to 35% or 40%. Also please note: May 2017 P2 pass rate was higher than Nov 2017 Part 2 pass rate (54.0% versus 51.9%) and further in both 2016 and 2017 the Part 1 pass rates have not really been significantly lower (2016: 44.5 vs 33.8; 2017: 42.0 vs 42.4%; these are differences of mere 30 to 40 bps). Otherwise, I think it depends on the theory of why this pattern was true. Below are my observations/speculations. Basically, in terms of history, my assumption is the simplest (à la Occam's razor): the syllabus does not change within a calendar year, and the May candidates simply have less time to prepare. I hope that's helpful, thanks!

From my previous speculation on the historical pattern (which may have lost its mojo):
... I wish I knew definitively the answer to (3) but the GARP staff is not different to my knowledge (the practitioners vary but there is no reason to expect it's a seasonal cause). Here are my mere thoughts:
  • I would expect a major factor is simply that candidates have six additional months, in theory, to study unchanged material. For argument's sake, given the exact same material and same standard, we'd expect better performance in November given the material doesn't change yet there is much more time. For example, how many attempt both P1 and P2 in May versus November? (I don't know). Well, for those (brave) ambitious people, given the breadth of material, I would certainly expect higher pass rates in November! (if there is a material number of P1+P2 takers, the first thing i'd do with EDA is parse them out to see how much they alone contribute ...)
    • Related, November candidates have the benefit of May feedback. Social media changes the game. In recent years. the last exam is basically eventually almost dissected.
    • This exam change (once a year) is more significant for the FRM than, say, the CFA
  • Also, while I do not know the details, it is reasonable to expect that GARP "learns something" from May to November with respect to the recently changed material. GARP's learning, on the other hand, could cut either way ...
    • Related, to the extent really new material (ie, just introduced in 2016) is "new learning" for exam creators (GARP), there is slightly more uncertainty with respect to calibration of question difficulty. For example, for a brand new reading, a question might be written that, upon inspection of the exam outcomes, turns out to be extremely difficult (e.g., I would sort the questions from highest percentage correct to lowest) such that it would not be repeated in November.
  • The volatility is interesting, to me, simply because GARP's methodology does allow for them to roughly manage a pass rate outcome. Statistically, this volatility suggests to me that the interquartile (IRQ), or really I mean the range between the top 5% and the passing X%, might "tighten" on them a bit from May to November (i.e., a bit of clustering toward the upper deciles), which could be supported with narrative. I suppose. In any case, it's very interesting to me that GARP resists managing the outcome to a straighter line (I don't disagree, it's just interesting and makes me wonder too). Thanks!
 

David Harper CFA FRM

David Harper CFA FRM
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Thread starter #23
Hi @Flashback If GARP additionally breaks out the P1+P2 pass rate, then I am not aware (cc: @Nicole Seaman ), sorry. With the pass rate information, at least that I have seen, I do not perceive it could be inferred. But actually, I updated the pass rate chart only with the information Nicole cited from GARP's facebook post above ... it's possible they shared additional information elsewhere. Thanks,
 

nikic

Active Member
#24
It seems like I cannot find any definitive word on this online. What would the expected passing cutoff point be usually? 60? 65? 70?

Also, how is the curve grading done? Does GARP pick the percentage of people to pass before or after they’ve scored everyone?

Would appreciate some thoughts on the mechanism here.
 

Nicole Seaman

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#25
It seems like I cannot find any definitive word on this online. What would the expected passing cutoff point be usually? 60? 65? 70?

Also, how is the curve grading done? Does GARP pick the percentage of people to pass before or after they’ve scored everyone?

Would appreciate some thoughts on the mechanism here.
Hello @nikic

Please note that I moved your post to this thread, which discusses the pass rates.

Thank you,

Nicole
 

David Harper CFA FRM

David Harper CFA FRM
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Thread starter #26
@nikic And in regard to the "cutoff point," in case you missed the embedded link above, everybody understandably wants to know it, but the cuttoff cannot really be known ex ante, see https://www.bionicturtle.com/forum/...de-for-frm-part-1-and-part-2.9579/#post-42322 i.e.,
To my knowledge, @ShaktiRathore 's links above still apply (although we can confirm this week with GARP) and the exam methodology has not changed: the top 5% quantile (ie, the top ventile) score is determined from the overall score then a ratio is applied to that score. But the ventile cannot be known ex ante, and further the ratio varies; this amounts to a sophisticated version of "grading on a curve." @ShaktiRathore illustrates with an example (in links above) for P2 which seems plausible as an illustration of the mechanics: he assumes that the top ventile score is 75 out of 80, and the passing ratio is 70%, such that the passing score is 75 * 70% = 52.5. But it's just an illustration, GARP has certainly never guaranteed to us a fixed passing rate. It's my understanding that the intention is more along the lines of maintaining (eg) the P2 pass rate above 50%. Thanks!
 

Nicole Seaman

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#30
Any reason why GARP isn't releasing them?
Hello @nikic,

They don't always release them right away. I don't recall how long it was after the exam results last year, but I know it wasn't right away. I will make sure to update here when they do release them.

Nicole
 

David Harper CFA FRM

David Harper CFA FRM
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Thread starter #34
Thank you @Karim_B ! I updated our pass rate history chart accordingly, see below.
(FYI, your screenshot from GARP shows 2016 Part 1 pass rates of 40.0% in both May/Nov, but those appear to be incorrect).
@nikic Almost but not quite the lowest, it looks like the lowest P1 pass rate technically was Nov 2010 (39.3%), but 40.6% is unusually low. I inserted long-term average pass rates (i.e., since May 2010) into the chart for additional comparison. Thanks,

 

nikic

Active Member
#35
Thank you @Karim_B ! I updated our pass rate history chart accordingly, see below.
(FYI, your screenshot from GARP shows 2016 Part 1 pass rates of 40.0% in both May/Nov, but those appear to be incorrect).
@nikic Almost but not quite the lowest, it looks like the lowest P1 pass rate technically was Nov 2010 (39.3%), but 40.6% is unusually low. I inserted long-term average pass rates (i.e., since May 2010) into the chart for additional comparison. Thanks,
Hi David, could GARP have made an error previously in releasing the pass rates, and these are the actual revised/corrected pass rates?

Also, if indeed 40.6% is the lowest since Nov 2010 for Part 1...and judging by the lower than LTA scores in recent years...what does it say? 1) GARP increasing the cut-off point; 2) The papers actually getting tougher/trickier; 3) Quality of candidates dropping. Any input on this in your opinion?
 

David Harper CFA FRM

David Harper CFA FRM
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Thread starter #36
Hi @nikic
  • Re: "could GARP have made an error previously in releasing the pass rates, and these are the actual revised/corrected pass rates?": It is conceivable but given that GARP has never--to my knowledge--amended the originally published 2016 results (e.g., see the first post in this thread, where we repeated their finding that "The November 2016 Part 2 (P2) pass rate was 54.3%" https://www.bionicturtle.com/forum/threads/what-is-the-pass-rate-for-the-frm.10093/) it seems to me far more likely that the dashboard (screenshot) above simply is mistaken)
  • Re: "what does [the low 40.6% Part 1] say?": I don't really know. Anecdotally, my perception is that the quality of candidates is (slightly) increasing, not decreasing; so your third reason doesn't comport with our experience here. Frankly, GARP is not transparent about the test outcomes (I believe in a way that is not sustainable). My personal effort has been more visibly tilted toward the direction of helping them increase the quality of the exam (e.g., reduce errors and imprecisions); we've submitted dozens of corrections in recent years. Consequently, I would expect a gradual increase in the quality (e.g., robustness) of the exam itself. But that's not exactly the same thing as difficultly (in fact, for most problematic questions, to increase quality is to somewhat decrease difficulty: nothing is "harder" than a question that is flawed or imprecise! The hardest questions are imprecise especially when they give well-prepared candidates pause ... ). So I really don't know, except that I would not assume there is a ton of science behind it (given GARP is still evolving in its own expertise), it may just be a quasi-random outcome. I hope that helps!
 
#37
given 4000 passed in level 1 based on the list published by garp, so 4000 being 40.6 % means the total student appeared for part 1 2018 was roughly 10,000.
 

Nicole Seaman

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#38
We have the pass rates for the November 2018 exam! David has updated our historical pass rate graph to reflect the updates. Here are three high-level takeaways:
  • The November 2018 Part 1 pass rate of 50.1% was the highest P1 pass rate in five years (since 50.1% passed in November 2013); it was significantly above (i.e., several hundred basis points) recent and long-run average P1 pass rates.
  • The November 2018 Part 2 pass rate of 55.9% was slightly higher than recent P1 pass rates but near the long-run average of 55.9%.
  • Historically, there has been a roughly ~ 10.0% spread (+/- 2.0%) between the Part 1 and Part 2 pass rates, but the gap was only 5.8% this time. We have no reason to believe this is predictive of a narrow trend going forward.
 

David Harper CFA FRM

David Harper CFA FRM
Staff member
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Thread starter #39
We just received the official pass rates for the May 2019 exam, so I have updated our chart (see below). The obvious observations include:
  • The P1 pass rate did not sustain the November peak but instead fell to 41.8% which is well below its long-term average
  • The P2 pass rate jumped (again) to 60.5%; this is the first time that 60.0% has been breached since November 2015.
  • While the P1 pass rate of 41.8% was 4.1% less than its long-term average, the P2 pass rate of 60.5% was 4.2% above its long-term average!
 
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