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NACVA CVA Exam - Topic 5 Question 60 Discussion

The basic valuation model, which is central to the income approach to valuation, has only two variables. Which of the following is/are NOT out of those variables?
D) Economic income measured
A) The amount of the expected prospective economic income in each period
B) The required rate of return (yield rate) by which the expected prospective economic income receipts should be discounted
C) Common equity

NACVA CVA Exam - Topic 5 Question 60 Discussion

Actual exam question for NACVA's CVA exam
Question #: 60
Topic #: 5
[All CVA Questions]

The basic valuation model, which is central to the income approach to valuation, has only two variables. Which of the following is/are NOT out of those variables?

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Suggested Answer: D

by Helga at Nov 19, 2022, 10:19 PM

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Blondell
10 months ago
I thought economic income was important too, but I guess not!
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Loreen
10 months ago
Yup, A and B are the main ones for sure.
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Rhea
11 months ago
Wait, are we sure about D? Seems like it could be relevant.
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Linette
11 months ago
Totally agree, C is definitely not one of them.
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Kendra
11 months ago
A and B are the key variables!
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Novella
11 months ago
I'm a bit confused about this one. I thought all options were related to valuation, but I feel like common equity doesn't fit with the basic model.
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Osvaldo
11 months ago
I practiced a similar question last week, and I believe economic income measured is also not one of the core variables.
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Lashandra
11 months ago
I think the two main variables are the expected economic income and the required rate of return. Common equity seems off to me.
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Latosha
11 months ago
I remember the basic valuation model focuses on income, but I'm not sure if common equity is one of the two variables.
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Virgina
11 months ago
I remember learning about the history of Linux in one of my computer science classes, so I'm confident option D is the correct answer.
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Annmarie
11 months ago
I think option C is the correct answer here. The key is that we need to group by SubscriberKey to get the most recent click date for each subscriber, and the MAX() function will give us the maximum (most recent) eventDate for each group. The other options don't quite achieve what we're looking for.
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Brent
11 months ago
This looks straightforward. Calcitonin's main role is to lower calcium levels, so statements II and III are correct. I'll go with option D.
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Cassie
12 months ago
I'm unsure about Example 4—does liability count as pure risk or is it more speculative since it involves potential outcomes from negligence?
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Audrie
1 year ago
I heard the answer is 'your soul.' Valuation is a dark art, my friends.
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Lucy
1 year ago
A) The amount of the expected prospective economic income in each period
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Lucy
1 year ago
D) Economic income measured
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Lucy
1 year ago
C) Common equity
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Na
1 year ago
I've got this one. The two variables are the amount of expected income and the required rate of return. Easy peasy!
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In
1 year ago
Haha, nice try with that 'common equity' option. I'm not falling for that one!
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Afton
1 year ago
Wait, isn't economic income measured one of the variables? I'm a bit confused here.
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Viva
1 year ago
D) Economic income measured
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Goldie
1 year ago
C) Common equity
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Brett
1 year ago
B) The required rate of return (yield rate) by which the expected prospective economic income receipts should be discounted
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Felicitas
1 year ago
A) The amount of the expected prospective economic income in each period
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Jovita
1 year ago
I think Common equity is not one of the two variables. That's an easy one to spot.
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Gail
1 year ago
D) Economic income measured
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Lazaro
1 year ago
C) Common equity is not one of the two variables
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Phung
1 year ago
B) The required rate of return (yield rate) by which the expected prospective economic income receipts should be discounted
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Malinda
1 year ago
A) The amount of the expected prospective economic income in each period
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Teddy
1 year ago
Hmm, I see your point. Let's review the question again.
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Vilma
1 year ago
I disagree, I believe the answer is D) Economic income measured.
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Teddy
1 year ago
I think the answer is C) Common equity.
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