CFA Appraisal Report & Documentation 2

Question 1

Which statement best describes the 'effective date' in a firearms appraisal report?

Accepted Answer

The date as of which the value opinion applies

Answer

The effective date establishes the point in time to which the value conclusion applies, which may differ from the report signing date.

Question 2

An appraiser is documenting a firearm with non-original replacement stocks. How should this be addressed in the report?

Accepted Answer

Note the replacement stocks and explain their negative impact on value

Answer

Non-original parts are a material fact that must be disclosed and their effect on value must be analyzed in the appraisal report.

Question 3

What is the purpose of including comparable sales data in a firearms appraisal report?

Accepted Answer

To support and substantiate the value conclusion

Answer

Comparable sales data provides market evidence that supports and validates the appraiser's value conclusion.

Question 4

When documenting firearm condition in a report, which grading system is most widely recognized in the US collectible firearms market?

Accepted Answer

NRA Condition Standards

Answer

The NRA Condition Standards (Perfect, Excellent, Very Good, Good, Fair, Poor) are the industry benchmark for grading collectible firearms in the US.

Question 5

A client requests an appraisal report for a shotgun they intend to donate to a museum. Which value premise is most appropriate?

Accepted Answer

Fair market value

Answer

IRS guidelines require fair market value for charitable donation appraisals, defined as the price a willing buyer would pay a willing seller with neither under compulsion.

CFA Practice Test

CFA Practice Test

CFA Appraisal Report & Documentation 2