Why is this a frequently asked question?
Well, for several reasons:
Ethics questions are specially difficult.
Ethics is not commonly studied in most college finance curriculums.
Many find Ethics less appealing and more complicated to read than the rest of the topics.
The CFA Institute places Ethics as one of the most critical topics in the CFA Program and it's significant part of all three CFA levels.
Keep in mind, the CFA Program also measures your overall total score against all categories and uses it for ranking. If your score is significantly above the Minimum Passing Score (MPS) by at least a few points, you will pass, regardless of your Ethics score.
The CFA Institute suggests that the Ethics results are a deciding factor for candidates who are marginally above or below the MPS. Therefore, the CFA Institute recommends that you score as well as possible in this section as an additional safety margin.
Thus, your Ethics score can determine whether you pass or fail (if your score is just over or under the MPS). No pressure.
What's the ‘Ethics Adjustment,’ and how does it affect me?
The CFA Institute uses a factor called the ‘ethics adjustment’ for candidates within the passing zone.
The CFA Institute says: “Starting with the 1996 exams, the performance on the Ethics section became a factor in the pass/fail decision for candidates whose total scores bordered the minimum passing score. The ethics adjustment can have a positive or negative impact on these candidates’ results.”
This adjustment means that if you're borderline but perform well in Ethics, you can have your score bumped up to passing.
Likewise, poor performance in Ethics could result in you failing the CFA exam.
While the CFA Institute advises that it’s more likely the Ethics Adjustment will result in candidates passing rather than failing, it still makes sense to score as well as you can in Ethics. Take no chances.
Yes, you'll definitely still be able to pass the CFA exam if you don't perform well in the Ethics.
BUT if you're a borderline case, then Ethics will be the tiebreaker. So don't take it lightly! Take as many practice exams as you can, so that you can be best prepared for the exam.
We sincerely wish you the best of luck as you prepare for the exam!