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NACVA CVA Exam - Topic 6 Question 28 Discussion

If the interest rate on a term contract is below the market interest rate for similar instruments at the time of event that triggers the transaction, the cash equivalent value the seller receives will be ____________ the contract's face value.
C) Less than
A) Greater than
B) Same as
D) Depends on agreement

NACVA CVA Exam - Topic 6 Question 28 Discussion

Actual exam question for NACVA's CVA exam
Question #: 28
Topic #: 6
[All CVA Questions]

If the interest rate on a term contract is below the market interest rate for similar instruments at the time of event that triggers the transaction, the cash equivalent value the seller receives will be ____________ the contract's face value.

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Suggested Answer: C

by Laurel at May 03, 2022, 08:20 AM

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Adela
10 months ago
I thought it would be the same as face value, but I guess not!
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Telma
11 months ago
Yeah, market rates matter a lot here.
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Page
11 months ago
Wait, are we sure about that? Seems off.
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Scot
11 months ago
Totally agree, C is the right choice!
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Jaclyn
11 months ago
It's definitely less than the face value.
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Sabine
11 months ago
I recall discussing how market rates affect contract values, so I think the answer is C, less than the face value.
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Olen
11 months ago
I feel like it could depend on the specifics of the agreement, but I lean towards C as well.
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Dannie
11 months ago
I'm not entirely sure, but I remember a practice question where a similar scenario indicated that the cash value was actually greater than the face value.
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Marylin
11 months ago
I think the answer might be C, less than the face value, since a lower interest rate usually means a lower cash equivalent value.
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Ronnie
11 months ago
Hmm, I'm not entirely sure about this one. I'll need to think through the different debugging options available in the desktop flow.
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Lonny
11 months ago
If the service managed its memory well, then I guess it might have prevented a Denial of Service attack, but there's a chance I'm mixing this up with something else I studied.
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Ona
11 months ago
Okay, let's see here. The question is asking about the requirements for an HTML5 app to run without manufacturer approval. I'm guessing the key thing is that the browser needs to support HTML5, so I'll go with option A.
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Maddie
12 months ago
Hmm, I'm a bit confused about the difference between creating a new model that builds into its own assembly versus one that is part of an existing package. I'll need to review the documentation on that.
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Stephane
12 months ago
Okay, I think I've got this. The key is to choose the initial centroids so they are far apart, as option D suggests. This helps the algorithm converge to a good clustering, rather than getting stuck in a local optimum. I'm feeling confident about this one.
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