CMA PART 2 EXAM STUDY
GUIDE 2026/2027
ACCURATE QUESTIONS
WITH CORRECT DETAILED
SOLUTIONS | NEWEST
VERSION
Description: This study guide covers all key topics for the CMA Part 2 exam, including
Financial Statement Analysis, Corporate Finance, Decision Analysis, Risk
Management, Investment Decisions, and Professional Ethics. Each question includes
a correct answer with a detailed solution to reinforce understanding.
Keywords: CMA Part 2, Certified Management Accountant, Financial Statement Analysis,
Corporate Finance, Decision Analysis, Risk Management, Investment Decisions,
Professional Ethics, MCQ Practice, Exam Revision.
1. Which of the following ratios measures a firm's ability to meet its short-term
obligations without relying on inventory?
A) Current ratio
B) Quick ratio
C) Debt-to-equity ratio
D) Inventory turnover ratio
,Correct Answer: B) Quick ratio ✅
Solution: The quick ratio (acid-test ratio) excludes inventory from current assets,
providing a stricter measure of liquidity than the current ratio. It is calculated as (Cash +
Marketable Securities + Accounts Receivable) / Current Liabilities.
2. A company has a beta of 1.5, the risk-free rate is 4%, and the market return is
10%. What is the required rate of return using CAPM?
A) 10%
B) 13%
C) 15%
D) 19%
Correct Answer: B) 13% ✅
Solution: CAPM = Rf + β(Rm − Rf) = 4% + 1.5(10% − 4%) = 4% + 9% = 13%.
3. Which of the following is NOT a component of the DuPont analysis?
A) Net profit margin
B) Total asset turnover
C) Equity multiplier
D) Dividend payout ratio
Correct Answer: D) Dividend payout ratio ✅
Solution: The DuPont analysis decomposes ROE into net profit margin, total asset
turnover, and equity multiplier. Dividend payout ratio is not part of the DuPont
formula.
4. In a period of rising prices, which inventory costing method results in the
highest ending inventory value?
A) FIFO
B) LIFO
,C) Weighted average
D) Specific identification
Correct Answer: A) FIFO ✅
Solution: Under FIFO (First-In, First-Out), older, lower-cost inventory is sold first, leaving
newer, higher-cost inventory in ending inventory. Thus, ending inventory is highest in
rising prices.
5. Which of the following statements about the statement of cash flows is correct?
A) Operating activities include cash flows from issuing stock.
B) Investing activities include cash flows from purchasing equipment.
C) Financing activities include cash flows from selling goods.
D) Operating activities include cash flows from paying dividends.
Correct Answer: B) Investing activities include cash flows from purchasing
equipment. ✅
Solution: Investing activities include the purchase and sale of long-term assets like
equipment. Issuing stock and paying dividends are financing activities. Selling goods is
an operating activity.
6. A company's degree of operating leverage (DOL) is 3.0. If sales increase by 10%,
what is the expected percentage increase in operating income?
A) 3%
B) 10%
C) 30%
D) 33%
Correct Answer: C) 30% ✅
Solution: DOL = % change in operating income / % change in sales. Therefore, %
change in operating income = 3.0 × 10% = 30%.
, 7. Which of the following is a key assumption of the economic order quantity
(EOQ) model?
A) Demand is seasonal.
B) Lead time is variable.
C) Ordering cost is constant per order.
D) Quantity discounts are always available.
Correct Answer: C) Ordering cost is constant per order. ✅
Solution: The EOQ model assumes constant demand, constant ordering cost,
constant carrying cost, and no quantity discounts. Variable lead time and seasonal
demand violate EOQ assumptions.
8. A firm has a current ratio of 2.0 and a quick ratio of 1.2. If inventory is $80,000,
what are current liabilities?
A) $40,000
B) $60,000
C) $100,000
D) $120,000
Correct Answer: C) $100,000** ✅
**Solution:** Quick ratio = (Current Assets − Inventory) / Current Liabilities. Let CA
= 2.0 × CL. Then (2CL − 80,000) / CL = 1.2 → 2CL − 80,000 = 1.2CL → 0.8CL =
80,000 → CL = **$100,000.
9. Which of the following best describes systematic risk?
A) Risk that can be eliminated through diversification
B) Risk associated with a specific company
C) Risk inherent in the overall market
D) Risk related to interest rate changes only
Correct Answer: C) Risk inherent in the overall market ✅
Solution: Systematic risk (market risk) affects the entire market and cannot be
GUIDE 2026/2027
ACCURATE QUESTIONS
WITH CORRECT DETAILED
SOLUTIONS | NEWEST
VERSION
Description: This study guide covers all key topics for the CMA Part 2 exam, including
Financial Statement Analysis, Corporate Finance, Decision Analysis, Risk
Management, Investment Decisions, and Professional Ethics. Each question includes
a correct answer with a detailed solution to reinforce understanding.
Keywords: CMA Part 2, Certified Management Accountant, Financial Statement Analysis,
Corporate Finance, Decision Analysis, Risk Management, Investment Decisions,
Professional Ethics, MCQ Practice, Exam Revision.
1. Which of the following ratios measures a firm's ability to meet its short-term
obligations without relying on inventory?
A) Current ratio
B) Quick ratio
C) Debt-to-equity ratio
D) Inventory turnover ratio
,Correct Answer: B) Quick ratio ✅
Solution: The quick ratio (acid-test ratio) excludes inventory from current assets,
providing a stricter measure of liquidity than the current ratio. It is calculated as (Cash +
Marketable Securities + Accounts Receivable) / Current Liabilities.
2. A company has a beta of 1.5, the risk-free rate is 4%, and the market return is
10%. What is the required rate of return using CAPM?
A) 10%
B) 13%
C) 15%
D) 19%
Correct Answer: B) 13% ✅
Solution: CAPM = Rf + β(Rm − Rf) = 4% + 1.5(10% − 4%) = 4% + 9% = 13%.
3. Which of the following is NOT a component of the DuPont analysis?
A) Net profit margin
B) Total asset turnover
C) Equity multiplier
D) Dividend payout ratio
Correct Answer: D) Dividend payout ratio ✅
Solution: The DuPont analysis decomposes ROE into net profit margin, total asset
turnover, and equity multiplier. Dividend payout ratio is not part of the DuPont
formula.
4. In a period of rising prices, which inventory costing method results in the
highest ending inventory value?
A) FIFO
B) LIFO
,C) Weighted average
D) Specific identification
Correct Answer: A) FIFO ✅
Solution: Under FIFO (First-In, First-Out), older, lower-cost inventory is sold first, leaving
newer, higher-cost inventory in ending inventory. Thus, ending inventory is highest in
rising prices.
5. Which of the following statements about the statement of cash flows is correct?
A) Operating activities include cash flows from issuing stock.
B) Investing activities include cash flows from purchasing equipment.
C) Financing activities include cash flows from selling goods.
D) Operating activities include cash flows from paying dividends.
Correct Answer: B) Investing activities include cash flows from purchasing
equipment. ✅
Solution: Investing activities include the purchase and sale of long-term assets like
equipment. Issuing stock and paying dividends are financing activities. Selling goods is
an operating activity.
6. A company's degree of operating leverage (DOL) is 3.0. If sales increase by 10%,
what is the expected percentage increase in operating income?
A) 3%
B) 10%
C) 30%
D) 33%
Correct Answer: C) 30% ✅
Solution: DOL = % change in operating income / % change in sales. Therefore, %
change in operating income = 3.0 × 10% = 30%.
, 7. Which of the following is a key assumption of the economic order quantity
(EOQ) model?
A) Demand is seasonal.
B) Lead time is variable.
C) Ordering cost is constant per order.
D) Quantity discounts are always available.
Correct Answer: C) Ordering cost is constant per order. ✅
Solution: The EOQ model assumes constant demand, constant ordering cost,
constant carrying cost, and no quantity discounts. Variable lead time and seasonal
demand violate EOQ assumptions.
8. A firm has a current ratio of 2.0 and a quick ratio of 1.2. If inventory is $80,000,
what are current liabilities?
A) $40,000
B) $60,000
C) $100,000
D) $120,000
Correct Answer: C) $100,000** ✅
**Solution:** Quick ratio = (Current Assets − Inventory) / Current Liabilities. Let CA
= 2.0 × CL. Then (2CL − 80,000) / CL = 1.2 → 2CL − 80,000 = 1.2CL → 0.8CL =
80,000 → CL = **$100,000.
9. Which of the following best describes systematic risk?
A) Risk that can be eliminated through diversification
B) Risk associated with a specific company
C) Risk inherent in the overall market
D) Risk related to interest rate changes only
Correct Answer: C) Risk inherent in the overall market ✅
Solution: Systematic risk (market risk) affects the entire market and cannot be
