UPDATE scores AS SC
SET passed = TRUE
FROM 
(
    SELECT
         test_code
        ,subject_code 
        ,AVG(score) AS ascore
    FROM scores
    GROUP BY
         test_code
        ,subject_code 
) AS AV
where
    SC.test_code = AV.test_code
    AND SC.subject_code = AV.subject_code
    AND SC.score >= AV.ascore;

UPDATE scores
SET passed = FALSE
WHERE passed is NULL;