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NACVA Exam CVA Topic 5 Question 100 Discussion

Actual exam question for NACVA's Certified Valuation Analysts exam
Question #: 100
Topic #: 5
[All Certified Valuation Analysts Questions]

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.

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Suggested Answer: A

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

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Tamesha
17 days 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.
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Chauncey
20 days ago
I disagree, I believe the answer is B) Greater because of the uncertainty of the expectation of excess earnings.
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Andra
23 days 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?
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Darci
25 days 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.
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Dong
6 days ago
User 3: So, it depends on the perceived persistence of the excess earnings?
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Jeff
8 days ago
User 2: I agree, the higher the risk, the higher the capitalization rate.
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Telma
10 days ago
User 1: I think the answer is B) Greater.
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Elbert
26 days ago
I think the answer is A) Lower.
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Noemi
27 days 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.
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Paul
14 days ago
Greater
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Paul
21 days ago
Lower
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