NACVA Exam CVA Topic 1 Question 76 Discussion

Actual exam question for NACVA's CVA exam

Question #: 76
Topic #: 1

[All CVA Questions]

The state of the art in the twenty-first century involves incorporating one or all of the following elements into the discount rate to reflect risk EXCEPT:

AA basic equity risk premium over the risk --free rate selected as the base

BOne or more coefficients modifying the basic equity risk premium based on industry or other characteristics that are expected to affect the degree of risk for the subject investment

CAn element reflecting the size effect

DNone of these

Show Suggested Answer

Suggested Answer: D

by Portia at Nov 27, 2023, 03:21 AM

Limited Time Offer

25%

Off

Get Premium CVA Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Jamika

14 days ago

I'm not sure, but I think D) None of these makes sense because the question is asking for an exception.

upvoted 0 times

...

I'm pretty sure the correct answer is D. None of these. The question is asking for what SHOULD NOT be included in the discount rate, and all the other options seem to be standard elements that would be incorporated to reflect risk.

upvoted 0 times

...

Desmond

16 days ago

I agree with Georgiana, because all the other options involve incorporating elements to reflect risk.

upvoted 0 times

...

Georgiana

25 days ago

I think the answer is D) None of these.

upvoted 0 times

...

NACVA Exam CVA Topic 1 Question 76 Discussion

Contribute your Thoughts:

Jamika

Zachary

Desmond

Georgiana