Skip to content

Home
CMA Exams Part 1
CMA Exams Part 2

Part 2 Practice Exam 7

CMA Part 2
Practice Exams

Practice Exam 1
Practice Exam 2
Practice Exam 3
Practice Exam 4
Practice Exam 5
Practice Exam 6
Practice Exam 7
Practice Exam 8
Practice Exam 9
Practice Exam 10

CMA Part 2 Practice Exam 7

Time limit: 0

Quiz Summary

0 of 10 Questions completed

Questions:

Information

You have already completed the quiz before. Hence you can not start it again.

Quiz is loading…

You must sign in or sign up to start the quiz.

You must first complete the following:

Results

Quiz complete. Results are being recorded.

Results

0 of 10 Questions answered correctly

Your time:

Time has elapsed

You have reached 0 of 0 point(s), (0)

Earned Point(s): 0 of 0, (0)
0 Essay(s) Pending (Possible Point(s): 0)

Categories

Not categorized 0%

Review
Answered
Correct
Incorrect

Question 1 of 10

1. Question

An investor purchased a stock for $50 per share, received a $2.00 per share dividend during the year, and sold the stock at year-end for $58 per share. What is the investor’s holding period return?

16%
Correct Incorrect Correct answer

12%
Correct Incorrect Correct answer

20%
Correct Incorrect Correct answer

4%
Correct Incorrect Correct answer

Correct

Incorrect
Question 2 of 10

2. Question

Which of the following types of risk can be eliminated by holding a well-diversified investment portfolio?

Market (systematic) risk
Correct Incorrect Correct answer

Unsystematic (company-specific) risk
Correct Incorrect Correct answer

Interest rate risk
Correct Incorrect Correct answer

Purchasing power (inflation) risk
Correct Incorrect Correct answer

Correct

Incorrect
Question 3 of 10

3. Question

According to modern portfolio theory, an investor who holds a security with high unsystematic risk but average systematic risk, within an otherwise well-diversified portfolio, should expect:

A higher required return, because the market compensates investors for all forms of risk
Correct Incorrect Correct answer

No change in required return, because unsystematic risk is not priced by a diversified market
Correct Incorrect Correct answer

The same required return as the risk-free rate, regardless of systematic risk
Correct Incorrect Correct answer

A lower required return than securities with less unsystematic risk
Correct Incorrect Correct answer

Correct

Incorrect
Question 4 of 10

4. Question

A company’s capital structure, at market values, consists of $2,000,000 of debt with an after-tax cost of 6%, $500,000 of preferred stock with a cost of 9%, and $2,500,000 of common equity with a cost of 13%. What is the company’s Weighted Average Cost of Capital (WACC)?

10.5%
Correct Incorrect Correct answer

9.8%
Correct Incorrect Correct answer

9.33%
Correct Incorrect Correct answer

11.0%
Correct Incorrect Correct answer

Correct

Incorrect
Question 5 of 10

5. Question

A bond has a face value of $1,000, an annual coupon rate of 6%, and 10 years remaining to maturity. If the current market yield on bonds of similar risk is 8%, the bond will most likely trade at:

A premium, because the coupon rate exceeds the market yield
Correct Incorrect Correct answer

A discount, because the coupon rate is below the market yield
Correct Incorrect Correct answer

A discount, simply because it is approaching maturity
Correct Incorrect Correct answer

Par value, because the coupon rate and market yield are unrelated
Correct Incorrect Correct answer

Correct

Incorrect
Question 6 of 10

6. Question

All else equal, when a company uses excess cash to repurchase its own shares on the open market, which of the following is the most likely immediate effect?

Earnings per share decreases because there are fewer shares outstanding
Correct Incorrect Correct answer

Earnings per share increases because net income is divided by fewer shares outstanding
Correct Incorrect Correct answer

The company's debt-to-equity ratio decreases
Correct Incorrect Correct answer

Total stockholders' equity increases as a result of the buyback
Correct Incorrect Correct answer

Correct

Incorrect
Question 7 of 10

7. Question

A corporate bond indenture includes a call provision allowing the issuer to redeem the bonds prior to maturity at a specified price. This feature is most likely to be exercised by the issuer when:

Interest rates have fallen, allowing the issuer to refinance the debt at a lower cost
Correct Incorrect Correct answer

Interest rates have risen, allowing the issuer to refinance the debt at a lower cost
Correct Incorrect Correct answer

The call provision increases the bond's market value to investors
Correct Incorrect Correct answer

Investors request early redemption to reinvest at higher prevailing rates
Correct Incorrect Correct answer

Correct

Incorrect
Question 8 of 10

8. Question

A company currently extends credit terms of net 30 with no discount. The credit manager is evaluating a change to terms of 2/10, net 30 to encourage earlier customer payment. Which of the following best describes the primary trade-off involved in this decision?

Offering a cash discount eliminates the need for ongoing credit analysis of customers
Correct Incorrect Correct answer

The cost of the discounts taken must be weighed against the benefit of a reduced investment in receivables
Correct Incorrect Correct answer

Offering a discount has no effect on the company's level of accounts receivable
Correct Incorrect Correct answer

The discount will always increase net income regardless of customer payment behavior
Correct Incorrect Correct answer

Correct

Incorrect
Question 9 of 10

9. Question

A company uses 24,000 units of a raw material per year. The cost to place each purchase order is $150, and the annual carrying cost is $4 per unit. Using the Economic Order Quantity (EOQ) model, what is the company’s EOQ (rounded to the nearest whole unit)?

900 units
Correct Incorrect Correct answer

2,683 units
Correct Incorrect Correct answer

1,342 units
Correct Incorrect Correct answer

600 units
Correct Incorrect Correct answer

Correct

Incorrect
Question 10 of 10

10. Question

A U.S. company has a 9 million euro payable due to a foreign supplier in three months. Management wants to lock in the maximum dollar cost of the payable while retaining the ability to benefit if the euro weakens before payment is due. The company should most likely:

Sell euro forward contracts maturing in three months
Correct Incorrect Correct answer

Purchase a put option on the euro
Correct Incorrect Correct answer

Purchase a call option on the euro
Correct Incorrect Correct answer

Take no hedging action, since payables are not exposed to currency risk
Correct Incorrect Correct answer

Correct

Incorrect

Next: CMA Part 2 Practice Exam 8

Trademark Disclaimer

CMA® and Certified Management Accountant® are registered trademarks of the Institute of Management Accountants (IMA). This website is not affiliated with, sponsored, or endorsed by IMA.

CMA Part 1

Practice Exam 1
Practice Exam 2
Practice Exam 3
Practice Exam 4
Practice Exam 5
Practice Exam 6
Practice Exam 7
Practice Exam 8
Practice Exam 9
Practice Exam 10

CMA Part 2

Practice Exam 1
Practice Exam 2
Practice Exam 3
Practice Exam 4
Practice Exam 5
Practice Exam 6
Practice Exam 7
Practice Exam 8
Practice Exam 9
Practice Exam 10

Quick Links

Home
About Us
Contact Us
Privacy Policy

© 2026 CMA Practice Exam • Built with GeneratePress