NACVA Exam CVA Topic 1 Question 89 Discussion

Actual exam question for NACVA's CVA exam

Question #: 89
Topic #: 1

[All CVA Questions]

The discount rate is a market-driven rate. It represents the expected yield rate-or rate of return-necessary to induce:

AInvestors to commit available funds to the subject investment, given its level of risk

BYield rate

CDividends

DInvestment yield

Show Suggested Answer

Suggested Answer: C

by Eleonore at Jun 23, 2024, 04:57 PM

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1 days ago

I agree with Alise. The discount rate needs to be high enough to attract investors to take on the risk of the investment.

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3 days ago

Hmm, I'm not sure if B, C, or D are just synonyms for the discount rate. I'll have to think this one through carefully.

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7 days ago

The discount rate represents the expected yield rate necessary to attract investors, so A is the correct answer. Easy peasy!

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9 days ago

I think the answer is A) Investors to commit available funds to the subject investment, given its level of risk.

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