CIPM
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CIPM FAQs

 

General Information

 
CIPM Curriculum


CIPM Exams

 

General Information

 

How does the CIPM program differ from the CFA Program?

The CFA Program is a generalist study and exam program for investment professionals, anchored by a practice-based curriculum and focused on the knowledge essential to the investment decision-making process. The study material is generally equivalent to graduate-level coursework and includes ethical and professional standards; quantitative methods; economics; financial statement analysis; corporate finance; the analysis of equity, debt, derivatives, and alternative investments; and portfolio management. CFA candidates’ mastery of the body of knowledge is tested in three six-hour exams.

 

The CIPM program is a specialist study and exam program for investment performance professionals. The candidate body of knowledge includes professional ethics; performance measurement, attribution, and appraisal; and the Global Investment Performance Standards (GIPS). CIPM candidates’ mastery of the pertinent body of knowledge is tested in two three-hour exams.

 

How do I enroll in the CIPM program? Can you send me an application?

Enrollment is completed online through the CFA Institute website.  If you experience difficulty during the enrollment process, please contact us.

 

I don't have a university degree. Do I meet the qualifications to enroll in the program?

There are no educational prerequisites for enrollment in the CIPM program. 

 

What professional experience is required to earn the designation?

To be awarded the CIPM designation, you must meet our experience requirements.

 

What math skills do I need?

Candidates in the CIPM program need to be comfortable using algebra and basic statistics. The online courseware includes practice questions with feedback to help candidates understand the relevant formulas.

 

I’m not a native English speaker. Can I prepare for the exams and take them in my native language?

In order to ensure global consistency, the curriculum and exams are offered only in English.

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CIPM Curriculum

 

I do not always have access to the online courseware.  Are there books I can purchase instead?

All study sessions and associated readings are available as downloadable, printable PDFs in the “Resources” section of the online courseware.

 

Is there a recommended study plan?

Yes. Navigate to the “Planning Your Studies” section located in the Resources section of the online courseware.

 

Can I take a practice exam?

There is a sample exam included with the CIPM courseware. You may take this as many times as you like after you have enrolled in the program.

 

Do you recommend that I take a preparatory course?

Candidates should be able to succeed by studying the curriculum and mastering the learning outcome statements. However, we realize that some candidates may benefit from taking prep courses or using review notes. We have established a voluntary program designed to improve the training process used by providers of CIPM preparatory courses, products and services. It is important to note that any external preparatory materials should be used as a supplement, not a substitute, for study of the prescribed curriculum. 

 

Do I have to memorize every formula?

You will need to memorize all formulas at the Principles level. Some formulas at the Expert level will be provided on-screen during your exam. Read the CIPM Formula Policy.

 

I think I found an error in the curriculum.  What do I do?

If you believe you have discovered an error in the CIPM curriculum or courseware materials, please submit full details to cipm@cfainstitute.org. The error can then be investigated and, if needed, a correction will be included in the Errata list found in the online courseware.

 

I can't figure out the answer to one of the questions in the sample exam. Can you tell me what I'm doing wrong?

In the interest of fairness to all candidates in the CIPM Program, we cannot provide individual coaching or tutoring.

 

Do I have to know the new Global Investment Performance Standards (GIPS) information?

Candidates will be tested only on the material as presented in the current curriculum. Candidates are not responsible for changes in the GIPS standards that occur after the material was written.

 

Why isn’t there feedback for the questions on the sample exam?

One purpose of the sample exam is to simulate your actual experience on exam day − without the instant ability to check your answer after each question. Following the completion of the sample exam, you will learn your total score, total time spent on the exam, correct answers with the corresponding answer you provided, and whether you scored above or below 70 percent on each of the three major topic areas.  

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CIPM Exams

 

How many exams do I need to pass?

There are two CIPM exams – Principles and Expert. You must pass the Principles exam to move on to the Expert Level. If you fail a level, you can re-enroll at a reduced price of US$500.   

 

I’ve heard that you require specific calculators.  Is this true?

Yes. You may use either one of the approved calculators. Calculators will be inspected before you begin your exam, and unauthorized calculators will not be allowed into the testing room.

 

How does computer-based testing work?

Pearson VUE provides a demo simulating the computer-based testing experience. Before exploring the demo, please familiarize yourself with the functionality used in the CIPM exams. 

 

I passed Principles but the next Expert exam falls during a busy time at work. What do I do?

There is currently no limit to the amount of time that passes between successfully completing the Principles level and enrolling in the Expert level. You are free to skip one or more windows before continuing at the Expert level. 

 

What do I do if there is no test center in my area?

The computer-based CIPM exams are administered by Pearson VUE at more than 400 local test centers in 80 countries around the world. If your area is not listed, please contact Pearson VUE customer service.

 

Do I have to pass each of the individual topic areas to pass the exams?

No. The total score on your CIPM exam is simply your number of correct answers. Candidates who perform well in some topic areas can compensate for lower performances in other areas. However, be careful about any “test wise” strategy that recommends ignoring a topic in your study. Recovering from a zero score in a topic is very difficult.

 

Why don’t you let candidates know what score they earned on an exam and what score is required to pass?

The minimum passing score for each exam is determined after the exam window closes, thorough psychometric analysis has been conducted, and standard setting has been completed.  We do not consider one passing candidate to be more (or less) accomplished than another passing candidate merely because of his or her ranking relative to the minimum passing score or other candidates. To release scores would inevitably lead to such ranking, which would be especially unfair for candidates taking the same exam in different years.

 

Why is CFA Institute changing the CIPM Principles exam from questions with four answer choices to questions with three choices?

It is an improvement we have been considering for many years. We have followed the research of respected psychometricians in this field and have consulted with them on the benefits of making this change. In evaluating CFA exams we found that the fourth choice on the majority of selected response questions (multiple choice and item set) is frequently ineffective – attracting relatively few candidates.

 

It is worth remembering the last time CFA Institute made a major change in the structure of the exams. In 2000, we began to phase item-set questions into Level II and III CFA exams. Item sets are short (approximately 1−2 pages) case studies followed by six selected response questions. Candidates must analyze the information provided in the case to determine the correct answers. Some members felt very strongly that this change represented a certain “dumbing down” of the exams. However, all evidence points to no degradation in the quality and rigor of CFA exams. Candidate performance on item sets is comparable with performance on constructed response (e.g., short essay) questions. Candidates who sit for these exams and members who review item set questions consistently believe these questions are as difficult or more difficult than constructed response questions.

 

Pass rates indicate the CFA exams have not become easier with the conversion to item set questions. Item sets are an effective method of testing higher order knowledge and skills, including problem solving and interpretation. Similarly, the change from four to three answer choices will not degrade the quality, content, and rigor of the questions.

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Due to the reduced number of answer choices, will candidates taking exams in 2009 and later have a statistical advantage over those who took the exams earlier?

There is no fixed passing score on CFA exams. If there were fixed passing scores, all other factors equal, a reduction in the number of answer choices would likely result in more candidates passing the exams. That is not the situation. The passing score of any CFA exam is directly related to its level of difficulty as assessed by CFA charterholders and/or certificants in a formal standard setting process.

 

The CFA Institute Board of Governors or its delegates establishes the minimum pass score for each exam. The board relies heavily on the widely accepted modified Angoff standard setting method in evaluating each exam. Standard setting, independently managed and directed by expert psychometricians, is a rigorous process conducted after an exam is administered. Each standard setting session brings a diverse group of approximately 30 charterholders and/or certificants together for 1−2 days to independently evaluate each question and judge whether a minimally qualified candidate would answer it correctly. The goal of standard setting is to recommend to the board a minimum passing score that appropriately distinguishes between those candidates that demonstrated mastery of the curriculum from those that did not. The difficulty of any question is considered by each standard setter in making his/her judgment about the expected performance of the minimally qualified candidate. Plausibility of distractors is a factor considered by standard setters regardless of the number of answer choices. This process considers any potential changes in exam difficulty that result from a reduction in the number of answer choices and factors this in to the recommended minimum passing score. The standard setting process is an important step in maintaining consistency and fairness in evaluating candidate performance across years.

 

For an unprepared candidate in the CFA Program or the CIPM program, the probability of successful guessing on any single question will increase. However, the probability that such a candidate could guess correctly enough times to pass the exam is mathematically infinitesimal. This is true whether there are two, three, four, or more choices. It is also at least theoretically possible that a candidate with enough knowledge and skills to achieve a reasonably high score might achieve a higher score through successful guessing on just a few questions.

 

It is important to note that there is not a fixed score that candidates need to achieve to pass a CFA exam. Standard setters evaluate the difficulty of each exam in making their minimum pass score recommendation.

 

It is also worth noting that each of us likely made some educated guesses on our CFA exams. That is in part a function of a rigorous exam that demands mastery of many different topics, and that will remain the case. The content of the questions will not be any less rigorous with three-choice questions. The fact that guessing is mathematically better rewarded does not mean that pass rates will be higher or that unqualified candidates will pass the CFA exams.

 

How can you assert that the quality of the exam will be as good as or better than exams that utilized four-choice questions?

A question with one correct answer and two plausible but incorrect choices is a challenging question. An exam comprised of such questions is a challenging exam. Remember that most four-choice questions include at least one choice that does not appear plausible to candidates and is not often selected by candidates. CFA Institute has decided to focus our efforts on ensuring that every question has two plausible incorrect answers rather that spending the effort to write a third incorrect answer that, despite best intentions, is often not seen as plausible. In addition, the empirical literature in test development reveals minute to often undetectable differences in exam quality when two incorrect choices are offered rather than three. All things considered, we believe that this move will result in a higher quality exam that is equally effective in differentiating between mastery and non-mastery of the material.

 

What is a plausible incorrect answer?

A "plausible incorrect answer" is one which cannot be dismissed without careful thought or calculation. It should appear to be a viable answer to a candidate who has not mastered the knowledge and skills taught in the curriculum. For example, on a calculation question, incorrect choices might be the result of calculations that mix up the variables in a formula or represent interim calculations in a situation where two or more operations are required. Incorrect alternatives are often written in accordance with popular misconceptions about a particular topic. After a careful reading of the question and appropriate assessment of the possible answer choices, a well-prepared candidate should not find plausible incorrect answers to be attractive.

 

Won’t the exams be easier because candidates have fewer answer choices to read and consider?

Although candidates need to carefully manage their time to perform well on CFA exams, the CFA exams are not primarily designed as a test of time management skills. They are designed to comprise a fair sample of the knowledge and skills taught in the CFA Program and CIPM program curricula. The exams provide a framework in which candidates can demonstrate mastery of the knowledge and skills.

 

You mentioned that research of respected psychometricians supports the decision of CFA Institute to use three-choice questions. Can you give me some examples?

We considered educational research which questions the value of developing more than two distractors (incorrect choices) for multiple-choice items. Dr. Thomas Haladyna and Dr. Steve Downing, two recognized leaders in testing research, argue that most items used in well-developed standardized tests contained only one or two good distractors, suggesting that item writers should focus their efforts on the quality, not the quantity, of the distractors. For discussions, see Writing Test Items to Evaluate Higher Order Thinking (Haladyna) and Handbook of Test Development (Haladyna and Downing). In addition, a 2005 article by Dr. Michael Rodriguez in Educational Measurement: Issues and Practice summarizing 80 years of empirical evidence clearly supports the use of three-option (two-distractor) test items.

 

 

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