NACVA Exam CVA Topic 5 Question 100 Discussion

Actual exam question for NACVA's CVA exam

Question #: 100
Topic #: 5

Most analysts agree that one of the most important factors in the estimation of the direct capitalization rate for the excess earnings is the perceived persistence of the excess earnings. The longer the time period and the greater the uncertainty of the expectation of excess earnings, the __________the direct capitalization rate.

ALower

BGreater

Cfixed

DIt depends

Show Suggested Answer

Suggested Answer: A

by Beula at Sep 18, 2024, 03:00 AM

Limited Time Offer

25%

Off

Get Premium CVA Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Cherelle

2 months ago

The longer the time period and the greater the uncertainty, the greater the direct capitalization rate. Simple as that. Now, where's the exit sign? I've got a hot date tonight.

upvoted 0 times

...

Nelida

2 months ago

Wait, did someone say 'excess earnings'? I'm just here for the free snacks. Although, I do have a knack for guessing these things right. Option B, FTW!

upvoted 0 times

Catherin

1 months ago

I'm going with B) Greater too, let's see if we're right!

upvoted 0 times

...

Marg

1 months ago

I agree, the greater the uncertainty, the higher the direct capitalization rate.

upvoted 0 times

...

Crista

2 months ago

I think the answer is B) Greater.

upvoted 0 times

...

Tamesha

3 months ago

I see your point, Chauncey. I also think the answer is B) Greater because the direct capitalization rate would be higher with greater uncertainty.

upvoted 0 times

...

Chauncey

3 months ago

I disagree, I believe the answer is B) Greater because of the uncertainty of the expectation of excess earnings.

upvoted 0 times

...

Andra

3 months ago

Hmm, I was going to say it depends, but I guess B) Greater is the right answer. Who knew real estate could be so complicated?

upvoted 0 times

...

Darci

3 months ago

I agree, the correct answer is B) Greater. The more uncertain the excess earnings, the higher the risk, and the higher the capitalization rate.

upvoted 0 times

Jaime

2 months ago

Yes, the longer the time period and the greater the uncertainty, the greater the direct capitalization rate.

upvoted 0 times

...

Dong

2 months ago

So, it depends on the perceived persistence of the excess earnings?

upvoted 0 times

...

Jeff

2 months ago

I agree, the higher the risk, the higher the capitalization rate.

upvoted 0 times

...

Telma

2 months ago

I think the answer is B) Greater.

upvoted 0 times

...

Elbert

3 months ago

I think the answer is A) Lower.

upvoted 0 times

...

Noemi

3 months ago

The longer the time period and the greater the uncertainty of the expectation of excess earnings, the greater the direct capitalization rate. Seems pretty straightforward to me.

upvoted 0 times

Paul

3 months ago

Greater

upvoted 0 times

...

Paul

3 months ago

Lower

upvoted 0 times

...