Are female candidates to blame for the CFA's new low pass rate?

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Something happened to the pass rates for the CFA exams this year. After years in which the pass rate hovered around 43% for Level I and 46% for Level II, it suddenly fell back to 41% and 44% respectively. As we noted when the results first became apparent, this represented the lowest Level I pass rate for five years. 

What happened? The CFA Institute, which runs the exams, isn't saying. But when the results were officially announced this week, the Institute highlighted a big change that's taken place in the candidate pool. Women are much more plentiful than before. In 2018, the Institute said women accounted for 39% of candidates and that in markets like the UK and Australia, the number of women taking Level I exceeded 50%.

Needless to say, correlation doesn't equal causation and there might not even be much causation here. The Institute also said that female candidates have been increasing for the past five years, during which pass rates were stable. Even so, it's conceivable that 2019 could have been a tipping point in female participation and it's possible to postulate a reason why. Each CFA exam requires 300 hours of studying, often alongside a full-time job. This is one of the reasons for the exam's notoriously high level of no-shows. It conceivably also makes studying to pass the exams more difficult for women, who famously do more of the household chores.

Female CFA candidates who've passed the CFA exams with flying colors, who studied while pregnant (and passed), or who worked all day and studied until late at night, will undoutedly take umbrage at the suggestion that women brought the 2019 pass rate down. After all, there's no inherent reason women should do worse than men at a technical finance exam. 

It may well be that 2019's low pass rate was nothing to do with the rising female intake at all. Maybe 2019's exams were just hard. Alternatively, the CFA Institute also said that this year saw a 23% increase in Australian candidates. It could be that the Aussies were too chilled to study instead...

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