CA Final · January 2026 · Paper 2
CA Final Advanced Financial Management January 2026: paper analysis
Our own analysis of the official paper, as of 12 October 2026. The questions and answers belong to ICAI; read them on ICAI's website.
Chapter-wise marks
Where the marks were in this paper (out of 100; internal-choice alternatives not double counted).
What each question tested
In our words, by question number. Open the official paper for the full question.
| Q | Marks | Tests | Chapter |
|---|---|---|---|
| 1(a) | 6 | Working back the original NAV of a scheme from later NAVs after a bonus unit issue | Mutual Funds |
| 1(b) | 4 | Bonus issue to reduce promoter holding: P/E, bonus ratio and post-bonus free float value | Security Valuation |
| 1(c) | 4 | Payoff and breakeven points of a combined option strategy at expiry | Derivatives Analysis and Valuation |
| 2(a) | 6 | Import payment decision comparing an early payment discount with forward cover and borrowing | Foreign Exchange Exposure and Risk Management |
| 2(b) | 4 | External funds requirement under different fixed asset capacity utilisation levels | Financial Policy and Corporate Strategy |
| 2(c) | 4 | Distinguishing real options from financial options | Advanced Capital Budgeting Decisions |
| 3(a) | 6 | Futures position combined with a written call: mark-to-market profit and brokerage | Derivatives Analysis and Valuation |
| 3(b) | 4 | Cross rates from bid-ask quotes and checking for arbitrage | Foreign Exchange Exposure and Risk Management |
| 3(c) | 4 | Indicators of political risk in overseas operations and mitigation techniques | Risk Management |
| 4(a) | 6 | Interest rate cap and floor premiums and net hedging result for borrower and lender | Interest Rate Risk Management |
| 4(b) | 4 | Economic value added and the maximum dividend before value erosion | Business Valuation |
| 4(c) | 4 | Identifying chart patterns in technical analysis | Security Analysis |
| 5(a) | 8 | Treynor ratio ranking and cut-off point for optimal portfolio selection | Portfolio Management |
| 5(b) | 6 | Number of GDRs to be issued and cost of GDR financing | International Financial Management |
| 6(a) | 6 | Closing NAV per unit of a new fund offer including underwriting and expenses | Mutual Funds |
| 6(b) | 4 | Value of an abandonment option using risk-neutral probabilities | Advanced Capital Budgeting Decisions |
| 6(c) | 4 | Government role in building the start-up ecosystem in India | Startup Finance |
| 6(c) OR | 4 | Pass-through, pay-through and stripped securitisation structures | Securitization |
What stood out
- Each MCQ case covered one chapter; bond repo mechanics and bank merger swap ratios were notable choices.
- Mutual funds featured twice in descriptive questions for 12 marks, the highest of the three attempts.
- Optimal portfolio selection through a cut-off point appeared for 8 marks, a pattern repeated in May 2026.
- Theory touched real options, political risk, chart patterns and start-ups, mostly in 4-mark parts.
- Business Valuation was represented only through an EVA computation.
Practise the chapters that carried the marks
Foreign Exchange Exposure and Risk Management, Advanced Capital Budgeting Decisions, Portfolio Management: study guides and practice questions in the CA Final format.