Free IMA CMA Part 2 (Strategic Financial Management) Corporate Finance Practice Questions

Corporate Finance on CMA Part 2 covers risk and return concepts (CAPM, beta, expected return), the cost of capital (WACC, cost of debt, cost of equity), capital structure decisions, working capital management, raising capital, dividend policy, and international finance including foreign exchange exposure and hedging.

113 Questions
44 Easy
45 Medium
24 Hard
2026 Syllabus

Sample Questions

Question 1 Easy
Stock A has an expected return of 12% and a standard deviation of 8%. What is the coefficient of variation for Stock A?
Solution
C is correct. The coefficient of variation (CV) measures risk per unit of expected return and is computed as CV=σ/E(R)CV = \sigma / E(R). Substituting the given values: CV=8%/12%=0.667CV = 8\% / 12\% = 0.667. A lower CV indicates less risk per unit of return.
Question 2 Medium
A 10-year bond with a face value of $1,000 pays an annual coupon of 6% and currently trades at $900. Using the approximation formula, what is the bond's yield to maturity?
Solution
D is correct. The approximate YTM is YTM≈[C+(F−P)/n]/[(F+P)/2]\text{YTM} \approx [C + (F - P)/n]/[(F + P)/2], where C is the annual coupon, F is face value, P is price, and n is years to maturity. Annual coupon = $1,000 × 6% = $60. Discount amortization = ($1,000 − $900)/10 = $10. Average price = ($1,000 + $900)/2 = $950. YTM ≈ (60 + 10)/950 ≈ 7.37%, which rounds to 7.4%.
Question 3 Hard
The spot exchange rate is $1.1000 per euro. The one-year U.S. interest rate is 5% and the one-year euro interest rate is 3%. A U.S. firm will receive €10,000,000 in one year and hedges using a one-year forward contract priced at covered interest rate parity. What is the approximate USD value the firm locks in?
Solution
B is correct. Covered interest rate parity gives F=S×1+iUSD1+iEURF = S \times \frac{1 + i_{USD}}{1 + i_{EUR}}. So F=1.1000×(1.05/1.03)=1.1000×1.019417=1.121359F = 1.1000 \times (1.05 / 1.03) = 1.1000 \times 1.019417 = 1.121359 USD per euro. Locked-in USD = €10,000,000 x 1.121359 = $11,213,592.
Create a Free Account to Access All 113 Questions →

About FreeFellow

FreeFellow is an AI-native exam prep platform for actuarial (SOA & CAS), CFA, CFP, CPA, CAIA, GARP FRM, IRS Enrolled Agent, IMA CMA, and FINRA / NASAA securities licensing candidates — built around modern AI as a core capability rather than as a bolt-on. Every lesson ships with AI-narrated audio. Every constructed-response item has a copy-to-AI prompt builder so candidates can paste their answer into their own ChatGPT or Claude for self-graded feedback. Fellow members get instant AI grading on essays against the official rubric (currently CFA Level III, expanding to other essay-bearing sections).

The 70% you need to pass — question bank, written solutions, lessons, formula sheet, mixed practice, readiness tracking — is free forever, with no trial period and no credit card. Become a Fellow ($59/quarter or $149/year per track) to unlock mock exams, flashcards with spaced repetition, performance analytics, AI essay grading, and a personalized study plan.