NACVA CVA Exam - Topic 3 Question 9 Discussion

Actual exam question for NACVA's CVA exam

Question #: 9
Topic #: 3

The normalized economic income is capitalized, typically, as an annuity in perpetuity. The capitalization rate used in this procedure should be:

ACommensurate with the risk of investment

BConsistent with the measurement of net income

CDebt component and equity component are blended

Dderived from the property over a discrete period of time

Show Suggested Answer

Suggested Answer: A

by Lonny at May 05, 2022, 06:28 PM

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Alyce

6 months ago

Surprised no one mentioned the importance of market trends!

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Janessa

6 months ago

Wait, D? That seems off, how can you cap it over just a period?

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Wilbert

6 months ago

C sounds right, blending is important.

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Stefanie

6 months ago

I think B makes more sense for consistency.

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Graham

7 months ago

Definitely A, risk is key!

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Ria

7 months ago

I practiced a similar question where the focus was on blending debt and equity components, so I'm leaning towards C, but I could be wrong.

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Jade

7 months ago

I'm not entirely sure, but I feel like the capitalization rate should be consistent with net income measurement, which might point to B.

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Stefany

7 months ago

I remember we discussed how the capitalization rate should reflect the risk of the investment, so I think A makes sense.

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Mertie

7 months ago

I vaguely recall something about deriving the rate over a specific time period, which makes me think D could be relevant, but I’m not confident.

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Noemi

7 months ago

This question seems straightforward, I should be able to identify the two recommended configuration best practices for backup and recovery on Exadata.

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Jolanda

7 months ago

Hmm, this is a tricky one. I'll need to think carefully about the BGP attributes and how they're used in a VPLS setup.

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