Blurfreak,
The CFM can be chosen as graded or pass/fail. Should you take
pass/fail option, no matter how good you did or how badly you fair
as long as you pass, you will just get a pass grade. The modular
credits will be awarded to you but no marks will be taken into
calculation of your CAP.
If you choose to take graded(the default option), the result will
affect your CAP and you will be given A,B,C,D accordingly. Usually
the advancement to the next level is affected purely by passing the
modules, however nobody wishes to have a low CAP that is dragged
down by their CFM. Of course, if you do well in the CFM, it can
help to pull the CAP up also.
Basically most undergrads decide on whether to take graded or not
based on their confidence of doing well in that module. Of course,
taking ungraded also means less stress.
Hope this helps you 
