Turning snake oil into liquid gold: The alchemy of aligning a finance program with the CFA® body of knowledge

Abstract

A finance program determines relevance by aligning with professional standards, such as the CFA’s body of knowledge (CBOK). Resistance to the integration process occurs when faculty members disagree with the program’s targeted cognitive rigor (CR). This study suggests mapping the CBOK’s CR facilitates integration by allotting CFA learning outcomes across existing courses and provides a framework for measuring a program’s assurance of learning. This map demonstrates that Level-I CBOK should be viewed as a minimum requirement for an undergraduate finance program, and higher-level topics with comparable CR could improve students’ comprehension.

Keywords:

• CBOK
• CFA
• cognitive rigor
• depth of knowledge
• taxonomy of educational objectives

Disclosure statement

No potential conflict of interest was reported by the author(s).

Data availability statement

The data used in this study are located in https://www.cfainstitute.org/en/programs/cfa/curriculum/study-sessions.

Notes

1 For the 1621 CLOSs, DOK values range from 1 to 3.5. When a CLOS median DOK value has a decimal, it indicates that a learning outcome addresses different DOK levels—e.g., a CLOS with a DOK of 1.5 addresses both factual and procedural knowledge. Integer values usually indicate that a CLOS corresponds to one DOK level.

2 When a course has tests mimicking the CFA examination, historical CFA results can be used as a benchmark to assess whether a student “exceeded, met, or did not meet expectations” in specific course learning goals. Thus, course grades need to be calibrated for the reality that (1) based on the website 300 hours (https://300hours.com/cfa-passing-score/), the average estimated CFA passing score (the lowest score a candidate can get and still pass their CFA exam) has been about 65% over the past 6 years, and (2) better students tend to have test scores above 65%.

3 CR is a useful tool to identify a learning or teaching issue that instructors must remedy to “close the loop.” For instance, if test performance is below expectations, either (1) the tests’ CR is too high, or (2) teaching methods need to be reconsidered.

4 Using internal data from the CFA Institute’s Market Intelligence Team on Level 1 candidates’ self-reported demographics from 2018 to 2022, and informal discussions with colleagues from other universities, I estimate that less than 4% of all CFA Level-I candidates are undergraduate students passing the exam on their first attempt—that is, one candidate out of four was a student, one out of ten students sitting for the CFA Level-I examination was an undergraduate, 40% passed, and half of the candidates were likely repeating the exam.