Please find below some detail on what appeared in last Friday’s ACCA AFM Exams.

May I ask you to keep in mind the following:

✅There is more than one set of exam questions used by the examiners.

✅They have been provided by my cohort of ACCA AFM students & then collated and summarised as best I can.

✅I have provided these as “factually accurate” as I can. I am not giving my opinion on the degree of difficulty of the questions.

Let me start with the two Q1’s.


◦ Protectionist measures used by a country to protect its economy.

◦ Benefits of customs unions (like the EU).

◦ Multilateral netting and impact on cashflow (7 marks).

◦ Hedging a receipt through forward contract & futures ( 7 marks).

◦ FX NPV where you need to take into consideration a currency swap and a currency option and PPPT (7 marks).

◦ Assumptions and benefits / disadvantages of multilateral netting and the best hedging option for futures and forwards.

◦ Should the company undertake the project or not and which hedge to use.


◦ Interest rate risk hedge: No hedge, FRA, Futures and Collars (17 marks)

◦ Treasury function as Profit centre – asking about how to control speculative activities.

◦ Green Finance vs traditional loans.

◦ Concerns from shareholders about using green finance at cheaper cost will reduce the corporate value.

Moving on to Section B which I will just label B1, B2 etc.


◦ Calculation of cost of capital.

◦ Risk adjusted / revised WACC.

◦ Cost of debt.

◦ Theory on credit ratings provided by the agencies.

◦ CEO thinks that WACC will be reduced and benefit shareholder.

◦ Finance director thinks Asset beta will rise.


◦ Valuation asset based and FCFE.

◦ Calculation of geared and ungeared beta.

◦ Calculation of WACC

◦ Theory on diversification


◦ SPAC vs IPO.

◦ Value per share via FCF.

◦ Split timing of cash flows (1-4, 5-10, 10 to perpetuity).

◦ Delayed perpetuity growth rate of 7% pa


◦ Reconstructing the financial statements after disposal of a subsidiary.

◦ Restate the IS & SOFP.

◦ Interest cover calculations.


◦ Simple NPV


◦ Discussion of investment strategies – business review report is not to the satisfaction level of investors and others. What can be done?