American Bankers Association Exam CTFA Topic 4 Question 78 Discussion

Actual exam question for American Bankers Association's CTFA exam

Question #: 78
Topic #: 4

[All CTFA Questions]

What technique uses a risk-adjusted discount rate and contractual, promised, or most likely cash flows?

AAsset/Liability weighted

BFair value

CPresent value

DDiscount rate adjustment

Show Suggested Answer

Suggested Answer: D

by Yolande at Sep 18, 2024, 02:52 PM

Limited Time Offer

25%

Off

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

Contribute your Thoughts:

Submit Cancel

Kaycee

3 months ago

Woohoo, time to put on my finance hat! C) Present value for the win, baby!

upvoted 0 times

...

Cordelia

3 months ago

Hmm, I'll have to go with D) Discount rate adjustment. Can't beat that risk-adjusted discount rate!

upvoted 0 times

Gayla

2 months ago

User 3: D) Discount rate adjustment is definitely the best choice for risk-adjusted cash flows.

upvoted 0 times

...

Essie

2 months ago

User 2: I'm going with B) Fair value, it seems like the most accurate option.

upvoted 0 times

...

Alpha

3 months ago

I think C) Present value is the way to go.

upvoted 0 times

...

Valentine

3 months ago

This is a tough one, but I'm gonna go with C) Present value. Sounds like the most comprehensive approach.

upvoted 0 times

Nelida

2 months ago

I'm not sure, but I'll go with A) Asset/Liability weighted.

upvoted 0 times

...

Sylvie

3 months ago

I think it's B) Fair value, but I can see why you chose C) Present value.

upvoted 0 times

...

Beatriz

3 months ago

I agree, C) Present value seems like the most appropriate choice here.

upvoted 0 times

...

Cassie

4 months ago

I'm not sure, but I think it could also be B) Fair value because that takes into account the risk-adjusted discount rate.

upvoted 0 times

...

Rima

4 months ago

I agree with Adelle, because it makes sense to use present value for risk-adjusted discount rate.

upvoted 0 times

...

Adelle

4 months ago

I think the answer is C) Present value.

upvoted 0 times

...

Jennie

4 months ago

B) Fair value is my pick. Gotta love those risk-adjusted cash flows!

upvoted 0 times

...

Samuel

4 months ago

D) Discount rate adjustment seems like the way to go. Adjusting the discount rate to account for risk is key here.

upvoted 0 times

...

Ira

4 months ago

I think the correct answer is C) Present value. It aligns with the description of using a risk-adjusted discount rate and cash flows.

upvoted 0 times

Valda

3 months ago

Discount rate adjustment doesn't fit the description given.

upvoted 0 times

...

Oliva

3 months ago

Asset/Liability weighted and Fair value are not the right choices.

upvoted 0 times

...

Angella

3 months ago

Present value is definitely the technique that uses a risk-adjusted discount rate and cash flows.

upvoted 0 times

...

Ruthann

4 months ago

I agree, C) Present value makes sense in this context.

upvoted 0 times

...

Ettie

4 months ago

I agree, the correct answer is C) Present value.

upvoted 0 times

...

Eladia

4 months ago

Yes, it's definitely the most appropriate choice for that scenario.

upvoted 0 times

...