Finance Department | Grading Standards

MEMORANDUM

TO: Finance Faculty (regular, visiting, and adjunct faculty, and instructors)
FROM: David Yermack, Finance Dept. Chair and Manjiree Jog, Finance Dept. Deputy Chair
DATE: April 15, 2022
SUBJECT: Suggested MBA Grading Standards for the Department of Finance

This memo lays out the Department of Finance policy on suggested grading standards in the full-time and Langone MBA programs that have been in place for more than 20 years, with certain refinements and clarifications.

Our reputation depends in part on the ability of prospective employers to quickly ascertain that a student really understands financial theory and practice, and has the technical capability to use the tools learned in finance courses. It is part of your responsibility as a faculty member at New York University to evaluate student understanding of the materials in your course with examinations or written assignments that are sufficiently demanding to reveal differential performance.

For Foundations of Finance and Corporate Finance, for sections with enrollments of more than 20 students, we expect that approximately 35% of students will receive an A or A- grade. This policy is identical to the Stern School guidelines for grading in undergraduate core courses.

For elective courses, the Stern faculty has agreed that the individual instructor or department is responsible for determining reasonable grading guidelines. The Department of Finance guidelines are that instructors should award grades of A or A- to approximately 35% of students in these courses as well.

Within the “A range” of 35% for both core courses and elective courses, we would expect the number of A- grades to be at least equal to if not more than the number of straight A grades, in a proportion such as 15% A’s and 20% A-’s, with the understanding that instructors will be attentive to the “bunching” of grades so that students with nearly identical performance will receive the same letter grades. At times, student performance, small course enrollments, or bunching of grades may warrant some variation in the fraction of A/A- grades awarded. However, they should never exceed 50%. We expect that those cases in which faculty exercise discretion to award more A/A- grades than usual will be offset by other cases in which they award fewer than usual.

The remaining grades should be awarded mostly in the “B range,” with an expectation that approximately 60% of the students will receive some type of B. Grades should be distributed fairly equally between the B+, B, and B- subgroups, with the straight B grades ordinarily being the most numerous.

For students who perform significantly below most of the class, grades of C+, C, C-, D, and F are appropriate. We would expect approximately 5% of the grades in larger sections to fall into this range and encourage instructors to take account of noticeable separations in performance when differentiating the grades awarded to individual students.

A reference to these guidelines should appear on your syllabus for the course so that students are aware of them.

Remember also that students must specifically request incomplete grades from the instructor and fill out the Request for Incomplete Grade form before the last day of class. Only the instructor has the authority to grant incomplete grades, and there are strict time limits on students to complete course work or else the incomplete grade will lapse. We strongly suggest that you limit the number of incomplete grades that you give in all courses to less than 5%.