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IFPUG Accredited in Business Valuation (ABV) Sample Questions:
1. applies option pricing methods to value economic projects, companies, and financial securities. Just as option pricing models incorporate the flexibility of option holders' decision as to whether and when to exercise an option by paying the exercise price.
A) Valuing the built-in gains
B) Real option valuation
C) Return option valuation
D) Corporation based valuation
2. To get an explanation or interpretation of something on the financial statements, or to consult
working papers for details that augment the financial
statements,
it may be necessary to interview the company's outside independent accountant. This is most often the case when:
A) Contain some kind of unqualified opinion by the attorney and banker
B) Not completely footnoted
C) Contain some kind of unqualified opinion by the independent accountant
D) The financial statements are not audited
3. Some judicial
circuits use a multifactor
test to determine whether compensation is reasonable or excessive. For example, the Ninth Circuit has used a five-factor test. Which of the following is out of those factors?
A) Compensation paid to similarly situated employees in similar companies
B) All of these
C) The character and condition of the company
D) The employee's role in the company
4. Due to these complexities, for practical purposes it is acceptable to use the ratio as we defined it. However, the analyst is well advised to research:
A) Both the subject and guideline companies' use of short-term debt to determine whether to adjust this ratio to include all interest-bearing debt
B) Whether to adjust this ratio to include all interest-bearing debt
C) the subject companies' use of short-term debt
D) the guideline companies' use of short-term
5. Documentable, arm's-length, bona fide offers to buy or sell may also be useful evidence of value. Funded bona fide offers (i.e. offers for which the financing for the offer is already in place) should be gives more weight and more consideration than:
A) Unfunded bone fide offers
B) Merger and acquisition offers
C) Past subject company changes
D) Past acquisition documents by the subject company
Solutions:
| Question # 1 Answer: B | Question # 2 Answer: B,D | Question # 3 Answer: B | Question # 4 Answer: A | Question # 5 Answer: A |



