AGA Exam CGFM Topic 3 Question 40 Discussion

Actual exam question for AGA's CGFM exam

Question #: 40
Topic #: 3

[All CGFM Questions]

The government finance association recommends public sale, but under which of the following condition:

1. The issue has on uninsured credit rating of A or above

2. The issue is not so large that it cannot be absorbed by the market.

3. The issue is not so small as to attract too few investors

4. Interest rates are stable and market demand is strong

5. The market view the issue as warily complex or innovation.

6. The issue is backed by full faith and credit or by a strong revenue system.

AI, II, III

BI, II, III

CI, II, III, IV, V

DAll EXCEPT V

Show Suggested Answer

Suggested Answer: D

by Tarra at Feb 08, 2024, 10:37 AM

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Charlette

5 months ago

That makes sense, Avery. I think the answer is D then, as option V could be a red flag for potential investors.

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Avery

5 months ago

So, do you think the answer should be D, since that excludes option V?

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Meghan

5 months ago

Yes, Charlette, that's true. If the market sees the issue as too complex or risky, it might affect the sale negatively.

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Charlette

6 months ago

I'm not sure about option V, though. Isn't it important for the market to view the issue positively?

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Avery

6 months ago

I agree with Meghan, the issue should meet all those conditions to ensure a smooth public sale.

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Meghan

7 months ago

I think the answer is C, because all the conditions mentioned are important for a successful public sale.

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