CFIN ACTUAL 2026 EXAM QUESTIONS AND SOLUTIONS
RATED A+
✔✔Which of the following companies should provide the longest time horizon for
quantitative analysis?
Select one:
a. an automobile manufacturer
b. a dotcom
c. a website developer
d. an online search engine - ✔✔A. an automobile manufacturer
✔✔Precise forecasts which may be supported by great detail are useless if they do not
approximate reality.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔Which statement is typically projected first?
Select one:
a. Balance sheet
b. Income statement
c. Statement of retained earnings
d. None of the above - ✔✔B. Income Statement
✔✔The most significant portions of your projection are, no matter how carefully
contrived, still little more than educated guesses.
Select one:
a. TRUE
b. FALSE - ✔✔a. True
✔✔The final and perhaps most crucial portion of financial forecasting is to test the
assumptions that were used to derive the projection.
Select one:
a. TRUE
b. FALSE - ✔✔a. True
✔✔There are three distinct steps in developing pro forma statements. Which of the
following is not one of those steps?
Select one:
a. qualitative analysis
b. quantitative analysis
c. corporate analysis
d. testing critical assumptions - ✔✔c. Corporate Analysis
, ✔✔If projected assets exceed liabilities and owners' equity, it is assumed that the
difference is funded through stock issuance.
Select one:
a. TRUE
b. FALSE - ✔✔B. False
✔✔In every case, with total returns being equal, the investment which provides cash
flow sooner is the superior choice.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔An increase in risk should carry with it an increase in return.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔If stockholders perceive that the financial risk of a firm has decreased and all other
factors are the same, then the stock price will probably rise.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔Dividend payout is one determination of increase in stockholder returns.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔John Ross places $4,000 in a savings account that compounds interest at 6%. How
much money will he have in 15 years? - ✔✔$9,586
✔✔Jake Cherson is saving for a new tractor that costs $60,000. Appoximately how
much money must he set aside now to have $60,000 in five years if the annual
compound interest rate is 10%? - ✔✔$37,254
✔✔A major tenet of finance is to match short-term assets with short-term borrowings
and long-term assets with long-term borrowings.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔The present value equation is a rearrangement of the future value equation.
Select one:
a. TRUE
RATED A+
✔✔Which of the following companies should provide the longest time horizon for
quantitative analysis?
Select one:
a. an automobile manufacturer
b. a dotcom
c. a website developer
d. an online search engine - ✔✔A. an automobile manufacturer
✔✔Precise forecasts which may be supported by great detail are useless if they do not
approximate reality.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔Which statement is typically projected first?
Select one:
a. Balance sheet
b. Income statement
c. Statement of retained earnings
d. None of the above - ✔✔B. Income Statement
✔✔The most significant portions of your projection are, no matter how carefully
contrived, still little more than educated guesses.
Select one:
a. TRUE
b. FALSE - ✔✔a. True
✔✔The final and perhaps most crucial portion of financial forecasting is to test the
assumptions that were used to derive the projection.
Select one:
a. TRUE
b. FALSE - ✔✔a. True
✔✔There are three distinct steps in developing pro forma statements. Which of the
following is not one of those steps?
Select one:
a. qualitative analysis
b. quantitative analysis
c. corporate analysis
d. testing critical assumptions - ✔✔c. Corporate Analysis
, ✔✔If projected assets exceed liabilities and owners' equity, it is assumed that the
difference is funded through stock issuance.
Select one:
a. TRUE
b. FALSE - ✔✔B. False
✔✔In every case, with total returns being equal, the investment which provides cash
flow sooner is the superior choice.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔An increase in risk should carry with it an increase in return.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔If stockholders perceive that the financial risk of a firm has decreased and all other
factors are the same, then the stock price will probably rise.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔Dividend payout is one determination of increase in stockholder returns.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔John Ross places $4,000 in a savings account that compounds interest at 6%. How
much money will he have in 15 years? - ✔✔$9,586
✔✔Jake Cherson is saving for a new tractor that costs $60,000. Appoximately how
much money must he set aside now to have $60,000 in five years if the annual
compound interest rate is 10%? - ✔✔$37,254
✔✔A major tenet of finance is to match short-term assets with short-term borrowings
and long-term assets with long-term borrowings.
Select one:
a. TRUE
b. FALSE - ✔✔A. True
✔✔The present value equation is a rearrangement of the future value equation.
Select one:
a. TRUE
