NACVA Exam CVA Topic 6 Question 115 Discussion

Actual exam question for NACVA's CVA exam

Question #: 115
Topic #: 6

[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 Percy at Aug 18, 2025, 12:28 AM

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Leigha

2 hours ago

I agree with Dion, because all the other options involve incorporating risk elements into the discount rate.

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Gracia

2 days ago

I think the answer is B. Incorporating coefficients to modify the basic equity risk premium based on industry or other characteristics is a common way to reflect risk in the discount rate.

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Dion

7 days ago

I think the answer is D) None of these.

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