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ACCA AFM

Guided practice

Exam-style AFM questions worked on a practice sheet, with hints and Show me how when you are stuck, then exam-style MCQs to finish.

Chapter 3: Strategy Formulation

  1. Chapter 3Performance review - ratios against the wealth objective4 questions

Chapter 6: The Cost of Capital

  1. Chapter 6Cost of equity - the dividend growth model and estimating growth3 questions
  2. Chapter 6Cost of debt and the WACC - irredeemable and redeemable debt3 questions

Chapter 8: The Capital Asset Pricing Model

  1. Chapter 8CAPM - required returns, a portfolio beta and alpha3 questions

Chapter 9: Discounted Cash Flow Techniques

  1. Chapter 9NPV with inflation, immediate tax and capital allowances3 questions
  2. Chapter 9IRR by interpolation and the modified IRR3 questions

Chapter 10: Risk and Uncertainty

  1. Chapter 10Sensitivity analysis of a project's estimates3 questions
  2. Chapter 10Expected NPV with uncertain demand1 question
  3. Chapter 10Value at risk over one year and a project's life2 questions

Chapter 11: The Valuation of Debt Finance, the Macaulay Duration and the Modified Duration

  1. Chapter 11Bond values, the redemption yield and a change in yields3 questions
  2. Chapter 11Macaulay duration, modified duration and bond price sensitivity3 questions

Chapter 12: The Impact of Financing

  1. Chapter 12MM with tax - the cost of equity and WACC as debt is raised2 questions
  2. Chapter 12Adjusted present value - base case plus the tax shield3 questions

Chapter 13: Share Options and Option Pricing

  1. Chapter 13Black-Scholes: valuing a call and building a delta hedge4 questions

Chapter 14: Real Options

  1. Chapter 14Real options: valuing the right to wait2 questions

Chapter 16: The Valuation of Acquisitions and Mergers

  1. Chapter 16Asset betas - ungear, regear and the rate for an acquisition3 questions
  2. Chapter 16Free cash flow valuation: the firm, the equity and a growing perpetuity3 questions

Chapter 18: Foreign Exchange Risk Management (1)

  1. Chapter 18Money market hedging - receipts and payments2 questions
  2. Chapter 18Currency futures: contracts, basis and the outcome of a hedge5 questions

Chapter 19: Foreign Exchange Risk Management (2)

  1. Chapter 19Currency options: OTC and traded options on a payment3 questions

Chapter 20: Interest Rate Risk Management (1)

  1. Chapter 20Forward rate agreements and interest rate guarantees3 questions
  2. Chapter 20Interest rate futures: hedging a future loan4 questions
  3. Chapter 20Interest rate options: capping a borrowing rate with traded puts3 questions

Chapter 21: Interest Rate Risk Management (2)

  1. Chapter 21Interest rate swaps: sharing a comparative advantage2 questions

Chapter 22: Exchange Rate Determination

  1. Chapter 22Exchange rate forecasting - purchasing power parity2 questions