CFA 2018 Question bank 02 The Arbitrage Free Valuation Framework
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’s P/E multiple based on market price is less than the average industry P/E, hence the company is undervalued based on method of comparables.. Its P/E based on market price
LO.d: Explain the income, market, and asset-based approaches to private company valuation and factors relevant to the selection of each approach.. Firm A is a struggling company in
The projected benefit obligation (PBO) is defined as the actuarial present value of all future pension benefits earned to date based on expected future salary increases.. A decrease
The high P/E in USA could be due to a number of factors including an increase in expectations of future real earnings growth, fall in interest rates and fall in volatility in GDP
Analyst 2: While running a simulation, if there is a strong correlation across two inputs, then we can build the correlation explicitly into the simulation.. Both analysts
The value of a call option can be described as the present value of the expected terminal option payoffs where the discount rate is the risk-free rate and the expectation is based
Consider the CTV private equity fund with committed capital for $135 million, management fee of 2% and carried interest of 20%. The distribution waterfall is calculated
Statement C is incorrect because a payables turnover ratio that is high relative to industry could indicate that the company is not making full use of the available
