CMA Final · December 2025 · Paper 14
CMA Final Strategic Financial Management December 2025: paper analysis
Our own analysis of the official paper, as of 12 October 2026. The questions and answers belong to ICMAI; read them on ICMAI'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 |
|---|---|---|---|
| 2(a) | 7 | Replacement decision for a machine: incremental cash flows, subsidy, tax on depreciation, NPV and profitability index | Investment Decisions, Project Planning and Control |
| 2(b) | 7 | Break-even annual lease rental that makes leasing equal to borrowing to buy | Leasing Decisions |
| 3(a) | 7 | Comparing two risky projects using expected cash flows and coefficient of variation against an industry benchmark | Evaluation of Risky Proposals for Investment Decisions |
| 3(b) | 7 | Share value under a multi-stage dividend discount model with sustainable growth from ROE and retention | Equity and Bond Valuation and Evaluation of Performance |
| 4(a) | 7 | Bond price, duration, volatility and price change for given yield movements | Equity and Bond Valuation and Evaluation of Performance |
| 4(b) | 7 | Mutual fund NAV from sectoral index movements, NAV per unit and annualised return with distributions | Mutual Funds |
| 5(a) | 7 | CAPM expected return and alpha-adjusted returns to choose between two portfolios | Portfolio Performance Evaluation and Portfolio Revision |
| 5(b) | 7 | Ranking funds by Sharpe, Treynor and Jensen measures | Portfolio Performance Evaluation and Portfolio Revision |
| 6(a) | 7 | Missing security beta, theoretical index futures price and number of contracts to hedge or change beta | Forwards and Futures |
| 6(b) | 7 | Binomial call value by the delta method, put value by put-call parity and expected option values | Options |
| 7(a) | 7 | Three-currency triangular arbitrage check and profit from the arbitrage steps | Foreign Exchange Market |
| 7(b) | 7 | Comparing forward, money market and option hedges for a foreign currency import payable | Foreign Exchange Risk Management |
| 8(a) | 5 | Central bank digital currency and its potential advantages | Digital Finance |
| 8(b) | 5 | Key features of global depository receipts | The International Financial Environment |
| 8(c) | 4 | Types of securities issued by a special purpose vehicle in securitisation | Securitization |
What stood out
- The structure mirrored June 2026 closely: twelve numerical parts in Questions 2 to 7 and a three-part theory Question 8 on digital finance, depository receipts and securitisation.
- Portfolio performance measurement had a full 14 marks (CAPM alpha comparison and Sharpe-Treynor-Jensen ranking), the heaviest single chapter.
- Derivatives covered both index futures hedging with beta adjustment and binomial option pricing with put-call parity.
- Forex questions again paired triangular arbitrage with a forward, money market and option hedge comparison, a recurring combination.
- Many MCQs required calculation (profitability index, sensitivity, certainty equivalent, stochastic, bond price, portfolio return, levered beta, spread payoff, cross rate).
Practise the chapters that carried the marks
Equity and Bond Valuation and Evaluation of Performance, Portfolio Performance Evaluation and Portfolio Revision, Evaluation of Risky Proposals for Investment Decisions: study guides and practice questions in the CMA Final format.