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NACVA CVA Exam - Topic 4 Question 111 Discussion

Actual exam question for NACVA's CVA exam
Question #: 111
Topic #: 4
[All CVA Questions]

The fundamental of CAPM is:

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Suggested Answer: A

by Lauran at Jun 10, 2025, 08:33 PM

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Adelle
4 months ago
CAPM is all about systematic risk, no doubt!
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Becky
4 months ago
Wait, isn't it more about unsystematic risk?
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Shonda
4 months ago
Definitely A! Systematic risk is key.
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Argelia
5 months ago
I agree, A is the right choice!
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Benedict
5 months ago
A seems correct, but I’m not 100% sure.
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Florinda
5 months ago
I vaguely recall that the risk premium is tied to systematic risk in CAPM. So, I might lean towards A, but I need to double-check.
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Annelle
5 months ago
Unsure about this one... I thought unsystematic risk was more relevant in other contexts, but CAPM seems to highlight systematic risk.
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Francine
6 months ago
I remember practicing a question similar to this where it emphasized systematic risk. I feel like A is the right choice.
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Reena
6 months ago
I think the CAPM focuses on systematic risk, but I'm not entirely sure if it's about the risk premium or the risk discount.
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Walton
6 months ago
This is a classic CAPM question. The fundamental principle is that the risk premium is determined by the security's systematic risk, not its unsystematic risk. So I'm confident option A is the correct answer.
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Mindy
6 months ago
I'm a little confused by the wording of the question. Is it asking about the risk premium or the risk discount? I'll have to re-read the options more closely to make sure I understand what they're asking.
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Benton
6 months ago
Okay, let me think this through step-by-step. CAPM says the expected return on a security is a function of the risk-free rate, the market risk premium, and the security's beta. So the risk premium portion must be related to systematic risk, not unsystematic risk. I'll go with A.
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Dona
7 months ago
Hmm, I'm a bit unsure about this one. I know CAPM is about systematic risk, but I can't quite remember if the risk premium is a function of systematic or unsystematic risk. I'll have to think this through carefully.
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Casey
7 months ago
This seems like a straightforward CAPM question. I'm pretty confident I know the fundamental principle, so I'll go with option A.
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Stefania
10 months ago
Haha, unsystematic risk? What is this, a joke question? Everyone knows CAPM is all about systematic risk, so A is the right choice.
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Dannie
9 months ago
Yeah, unsystematic risk is not a factor in CAPM. A is the way to go.
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Ivory
10 months ago
I agree, A is definitely the correct choice.
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Dick
10 months ago
I'm not sure, but I think it's between A and C.
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Cassi
10 months ago
This is a classic CAPM question. The fundamental idea is that the market portfolio is the one with the highest Sharpe ratio, so the risk premium has to be a function of systematic risk. Option A is the correct answer.
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Marya
10 months ago
I agree with Margery, systematic risk is a key factor in CAPM.
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Rikki
10 months ago
CAPM definitely says that systematic risk is what determines the risk premium, not unsystematic risk. Option A is the way to go here.
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Thaddeus
9 months ago
Systematic risk is definitely the key factor in determining the risk premium.
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Thaddeus
9 months ago
I agree, option A is correct.
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Margery
11 months ago
I think the answer is A.
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