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NACVA CVA Exam - Topic 7 Question 126 Discussion

Actual exam question for NACVA's CVA exam

Question #: 126
Topic #: 7

[All CVA Questions]

The fundamental of CAPM is:

AThat the risk premium portion of the expected return on a security is a function of that security's systematic risk.

BThat the risk premium portion of the expected return on a security is a function of that security's unsystematic risk.

CThat the risk discount portion of the expected return on a security is a function of that security's systematic risk.

DThat the risk discount portion of the expected return on a security is a function of that security's unsystematic risk.

Show Suggested Answer

Suggested Answer: A

by Sherrell at Jun 02, 2026, 02:34 AM

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Maynard

1 hour ago

Wait, isn't unsystematic risk important too?

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Celestina

5 days ago

Totally agree, it's all about that market risk!

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Jenelle

10 days ago

A) is correct! Systematic risk matters.

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Noel

16 days ago

I feel like I might be mixing up the definitions, but I think A is the right choice since it mentions systematic risk and risk premium.

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Huey

21 days ago

Unsure about the terms used here; I thought both systematic and unsystematic risks were important, but CAPM emphasizes one over the other.

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Dan

26 days ago

I remember practicing a question similar to this, and I think the risk premium is definitely tied to systematic risk.

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Leota

1 month ago

I think the CAPM focuses on systematic risk, but I'm not entirely sure if it's about the risk premium or risk discount.

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