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NACVA CVA Exam - Topic 6 Question 125 Discussion

Actual exam question for NACVA's CVA exam

Question #: 125
Topic #: 6

[All CVA Questions]

It is possible (although not very common) for a security to have a negative beta (i.e. a beta less than zero). Such a beta would indicate that:

AIt is the result of aggressive securities

BBetas for small and publicly traded companies are often unreliable

CThe returns of these securities are countercyclical to the returns of the board investment market index.

DRisk-free return would be greater

Show Suggested Answer

Suggested Answer: C

by Dion at May 13, 2026, 07:58 AM

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Kindra

52 minutes ago

Betas for small companies can be unreliable, that's true.

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Belen

5 days ago

Wait, how can a security have a negative beta? Sounds odd.

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Shawna

10 days ago

Totally agree, it's rare but interesting!

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Solange

16 days ago

Negative beta means countercyclical returns.

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Pearly

21 days ago

I vaguely recall that negative beta indicates a security that does well when the market does poorly, so I’m leaning towards C as well.

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Shawn

26 days ago

We practiced a question like this before, and I feel like it had something to do with countercyclical returns. Could it be C?

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Pearly

1 month ago

I’m not entirely sure, but I think negative beta means the security moves in the opposite direction of the market. Maybe it’s option C?

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Benedict

3 months ago

I remember discussing negative beta in class, and I think it relates to how some assets perform when the market is down.

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