Fewer choices in exam may not help analysts' pass rate Sometimes you can have too much choice. That perhaps explains why the CFA Institute has decided to reduce the multiple choices from four to three on its Level 1 examination paper for aspiring chartered financial analysts. At first glance, this should be good news for the candidates, as it increases their chances of getting the right answer. Or does it? The CFA Institute said research by psychometricians showed that having four choices on an examination paper had little effect on the majority of selected samples. It quoted leading research analysts as saying that developing more than two distractors was not effective and that examiners should focus on the quality, not the quantity, of the questions and answers. That may be so, but it doesn't get away from the fact that, statistically, a candidate's chances of getting the right answer are improved from 25 per cent to 33 per cent by the choice reduction. It's all academic, says CFA Institute managing director for Asia-Pacific Ashvin Vibhakar. He maintains that the chances of someone passing without studying hard 'are non-existent', so the choice reduction will not make any difference. We will see. Over the past 45 years, the pass rate for the entry-level exam in Hong Kong has slowly drifted downwards from 80 per cent in the 1960s to below 40 per cent these days. Last year, only 35 per cent of candidates passed, the worst performance in three years. Rainbow looks to Sky Rainbow Brothers has built a colourful reputation in its short listing history. Since joining the main board in November 2007, the firm, which makes party favours for export, announced the resignations of its company secretary, its qualified accountant and a director in the first six months, along with a change of company address. Since then, it has changed its auditor and financial year-end. Now the the firm, which raised HK$75 million from its initial public offering, plans to invest HK$10 million in Soccer Sky, which is developing a shopping mall in Liaoning. Rainbow Brothers is among eight investors in Soccer Sky paying a total of HK$150,000 a month to an Anguila-incorporated company for management services as 'promoter' of the project. Rainbow said it had not experienced any significant adverse impact from the global financial crisis and had conducted a strategic review for its diversification strategy. It said it had tried to develop a licensing business on the mainland, as stated in the firm's prospectus, but without success. Rainbow shares have slid 40 per cent to 91 HK cents since its listing. Stormy season Profit warnings are becoming as regular as the weather forecast. Since the start of the year, 18 companies, from blue chip Cathay Pacific Airways to GEM-board listed AcrossAsia Multimedia, have warned of stormy weather ahead, and there have only been seven trading days so far. It looks like we are in for a long winter. Cook in charity kitchen Manulife Financial Corp Asia general manager Bob Cook lived up to his name at the weekend, donning a chef's outfit for the second year to serve food for the 1,300 employees taking part in The Community Chest's Walk for Millions. Mr Cook (left) had only been meant to turn up for a photo opportunity with general manager Michael Huddart, but warmed to the task so much he ended up staying for more than an hour to help dish out hot food from a menu of 36 choices at the midpoint of the charity event. It's a good job the participants still had a few miles to go to walk off their lunch. Cathay riddle prize winners Thanks for all the submissions in answer to our riddle on Saturday about Cathay Pacific losing money whether the oil price was touching US$150 a barrel or below US$50. The best entry came from 'ttezza', who wrote: 'Now I begin to understand why CX continues to charge a 'fuel surcharge', but perhaps it's time for [the airline] to own up and call it the 'we have no idea how to hedge our fuel costs surcharge'. I wouldn't be any happier paying it, but at least it bears a passing resemblance to the truth.' He receives our prize of a model Cathay airliner. A couple of CX shares go to the runner-up who wrote: 'The answer to your hedging riddle is very simple. Cathay lost much more when oil fell below US$50 a barrel. At this level they completely lost face and, as we all know, that's priceless!' A frequent Cathay flyer, he asked that his name be withheld.