NACVA Exam CVA Topic 1 Question 78 Discussion

Actual exam question for NACVA's CVA exam

Question #: 78
Topic #: 1

[All CVA Questions]

The fundamental risk measures and their correlation coefficient with observed equity risk premiums are as follows EXCLUDING:

AOperating margin

BVolatility of earnings or cash flows

CCoefficient of variation of return on book value of equity

DCoefficient of variation of operating margins

Show Suggested Answer

Suggested Answer: D

by Tarra at Dec 27, 2023, 01:17 AM

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Charlene

4 months ago

I heard the exam was so tough, they had to include a 'none of the above' option just to give us a fighting chance.

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Amber

3 months ago

D) Coefficient of variation of operating margins

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Brianne

3 months ago

C) Coefficient of variation of return on book value of equity

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Marget

3 months ago

B) Volatility of earnings or cash flows

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Ruth

3 months ago

A) Operating margin

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Nadine

4 months ago

Coefficient of variation of operating margins? Sounds like they're really trying to confuse us. I bet the answer is B, though. Gotta love those volatility measures!

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Bo

2 months ago

Alright, let's go with B then. Thanks for the input!

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Novella

2 months ago

I see your point, but I still think B is the best choice. Let's go with that.

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Glory

3 months ago

I'm not so sure, I think it could be C. The coefficient of variation of return on book value of equity seems like a possible exclusion.

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Kate

3 months ago

I think you might be onto something with B. Volatility of earnings or cash flows does seem like a fundamental risk measure.

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Delila

4 months ago

Coefficient of variation of return on book value of equity? Now that's a mouthful. I hope the exam isn't full of these obscure terms!

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Theodora

4 months ago

I'm not sure, but I think it's important to understand the correlation coefficient in this context.

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Lynelle

4 months ago

I agree with Lorrine. The other options seem to be related to risk measures.

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Lorrine

4 months ago

I think the answer is D) Coefficient of variation of operating margins.

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Lauryn

4 months ago

Volatility of earnings or cash flows makes sense as a risk measure. Can't believe they're trying to trick us with that one.

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Casie

3 months ago

User 2

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Layla

3 months ago

User 1

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Kristel

3 months ago

User 2

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Samuel

3 months ago

User 1

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Lyla

4 months ago

Operating margin? Really? That's not a risk measure, it's a profitability metric. This exam is getting trickier by the minute!

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Nan

4 months ago

I'm not sure about this one. Can someone explain why D) is the correct answer?

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Edmond

4 months ago

I agree with Louvenia. The other options seem to be related to risk measures.

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Louvenia

5 months ago

I think the answer is D) Coefficient of variation of operating margins.

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