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NACVA CVA Exam - Topic 1 Question 15 Discussion

Automatic reliance on industry rates such as the return on total assets, tangible net worth or equity. This is the procedure which should NOT be used in the estimation of the:
B) Direct capitalization rate
A) Indirect capitalization rate
C) Normalized level of earnings
D) Tangible asset value

NACVA CVA Exam - Topic 1 Question 15 Discussion

Actual exam question for NACVA's CVA exam
Question #: 15
Topic #: 1
[All CVA Questions]

Automatic reliance on industry rates such as the return on total assets, tangible net worth or equity. This is the procedure which should NOT be used in the estimation of the:

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Suggested Answer: B

by Elvera at May 08, 2022, 04:23 PM

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Jackie
10 months ago
D seems off too, but I guess it’s not the main focus.
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Nana
11 months ago
Wait, are we really saying industry rates are irrelevant for this?
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Stephaine
11 months ago
I thought it was C at first, but now I see the point.
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Teddy
11 months ago
Totally agree, A is misleading!
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Devora
11 months ago
Direct capitalization rate is the right choice here.
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Kanisha
11 months ago
I vaguely recall that the indirect capitalization rate shouldn't rely on those industry rates. It seems like a common mistake in practice questions.
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Cheryl
11 months ago
I feel like I practiced a similar question before. I think the answer might be related to the direct capitalization rate, but I could be wrong.
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Vernell
11 months ago
I think this question is tricky. I remember something about not using industry rates for certain calculations, but I'm not sure which one it is.
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Rolland
11 months ago
I’m leaning towards the normalized level of earnings as the answer. It seems like that would require a more tailored approach rather than just using industry averages.
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Maybelle
11 months ago
Okay, I've got this. The official name for 5G as defined by the ITU is IMT2020. I'm confident that's the right answer.
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Claribel
11 months ago
I'm leaning towards option D, selecting the 'Parent Attribute' checkbox. That seems like the most logical way to designate a parent attribute, but I'll double-check the other options just to be sure.
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Carmen
12 months ago
I remember practicing a similar question where we discussed group permissions, and it was definitely related to subscriptions.
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