Pass the AAFM Chartered Wealth Manager CWM_LEVEL_2 Questions and answers with ExamsMirror

Section A (1 Mark)

The organizations make their special offer to the customers who will provide the highest profit margins, greatest response rate and __________.

Section A (1 Mark)

Which of the following statements regarding debit and credit card liability is correct?

Section A (1 Mark)

Which of the following is not one of the five core process according to Payne’s five-process model ?

Section A (1 Mark)

Aditya’s father has given him general power of attorney what does this mean?

Section C (4 Mark)

A rate of interest of 10% semi-annual compounded quarterly would be equal to -------------------- % per annum compounded annually.

Section A (1 Mark)

A bank is considering making a loan to Ram Kapoor. Ram has a gross salary per month of Rs40500 but has take-home pay of Rs27500 per month. What aspect of evaluating a consumer loan application is this fact most concerned with?

Section B (2 Mark)

Calculate the value at which an office building can be priced from the following information:

A similar building has 8% capitalization rate.

Section C (4 Mark)

Read the senario and answer to the question.

Mr. Bhatia thinks he would require 50 lacs in today’s terms for Neena’s wedding at 25 years of age. What amount he has to save at the end of every month for Neena’s wedding requirement with a 7% inflation rate and investment earning minimum 12% p.a.

Section A (1 Mark)

Convertible bond arbitrage is to event driven as _________ is to corporate restructuring.

Section B (2 Mark)

Hybrid plans are

Section B (2 Mark)

If after the partition of an HUF 2 members became partners in 3 firms on behalf of their respective HUFs and they also become partners in a fourth firm. The funds were obtained by means of loans from the other 3 firms. The share incomes of the members from the fourth firm were assessable as their individual income only.

Section A (1 Mark)

Corrections are often followed by ________.

Section C (4 Mark)

Read the senario and answer to the question.

What would be the taxable amount on gratuity received by Jogen, if he would retired from an organization where employees are not covered under Gratuity Act?

Section A (1 Mark)

Which of the Following needs to register as an' Investment Adviser' as per SEBI Investment Advisor Regulations 2013.

Section B (2 Mark)

There are three stocks, A, B, and C. You can either invest in these stocks or short sell them. There are three possible states of nature for economic growth in the upcoming year; economic growth may be strong, moderate, or weak. The returns for the upcoming year on stocks A, B, and C for each of these states of nature are given below:

If you invested in an equally weighted portfolio of stocks A and B, your portfolio return would be ___________ if economic growth were moderate.

Section B (2 Mark)

An Asset allocation policy

Section B (2 Mark)

Which of the following statements with respect to DTAA is/are correct?

Section A (1 Mark)

With regard to hedge funds, ‘2 and 20’ is best explained as:

Section B (2 Mark)

Ajay is considering to purchase a house which will bring rental income of Rs. 15,000/- p.m at the end of month. Ajay is looking for 12% returns and he is expecting to sell the property after 5 years for Rs. 6 lac. What price Ajay should pay for this property now?

Section A (1 Mark)

Which of the following is NOT one of the phases of the life-cycle theory of asset allocation?

Section A (1 Mark)

In traditional approach to client servicing ,product offers were determined prior to analysis of client needs where as in Need Based approach a firm looks at book of business, and existing and targeted clients to assess its own core competencies and offerings

Section B (2 Mark)

Broker dealer model is more prevalent in

Section B (2 Mark)

Reliable ltd. has current earnings per share of Rs. 5. Assume a dividend – payout ratio of 50 percent. Earnings grow at a rate of 9 percent per year. If the required rate of return is 14 percent, what is its current value?

Section A (1 Mark)

The price that the buyer of a call option pays for the underlying asset if she executes her option is called the

Section B (2 Mark)

As per article 11 Double Taxation Avoidance Agreement with UAE, Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. However, such interest may be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest, the tax so charged shall not exceed:

(a) _______ percent of the gross amount of the interest if such interest is paid on a loan granted by a bank carrying on a bona fide banking business or by a similar financial institution; and

(b) _______ percent of the gross amount of the interest in all other cases.

Section C (4 Mark)

As an investor you have a required rate of return of 14 percent for investments in risky stocks. You have to analyze three risky firms and must decide which (if any) to purchase. Your information is

What is the maximum price? Which (if any) should buy?

Section A (1 Mark)

The best way to maintain your credit rating is to:

Section A (1 Mark)

Student loan is an example of:

Section B (2 Mark)

The following parameters are available for two mutual funds:

Calculate Treynor’s performance index for Fund A & Fund B respectively

Section C (4 Mark)

What is the portfolios standard deviation if you put 25% of your money into stock A which has a standard deviation of 15% and rest into stocks B which has a standard deviation of 10%. The correlation coefficient between the returns of the stocks is .75.

Section A (1 Mark)

Ideally, clients would like to invest with the portfolio manager who has

Section C (4 Mark)

Read the senario and answer to the question.

Calculate the income chargeable to tax from rented flat of Kolkata, for the assessment years 2008–09 and 2009–10.

Section C (4 Mark)

Roger deposits Rs. 10,00,000 in a bank account on 1st March 2005 and another Rs. 5,00,000 on 1st March 2011. He wants to withdraw all of this money with interest on 1st March 2015. If the account pays ROI of 11% p.a. compounded quarterly what amount can he withdraw from this account?

Section C (4 Mark)

Read the senario and answer to the question.

Calculate the return on Jogen’s investments in SBI Ltd shares.

Section A (1 Mark)

Which of the following is NOT the general purpose of CRM?

Section B (2 Mark)

Which of the following is an assumption of two stage dividend discount model?

Section A (1 Mark)

_____________seek to explain people's preferences in relation to consumption and saving over the course of their life.

Section A (1 Mark)

In The CAMPARI model of Credit evaluation ‘C’ stands for:

Section B (2 Mark)

Calculate the expected rate of return for M/S X Ltd. from the following information:

Section B (2 Mark)

As per Double Taxation Avoidance Agreement, the Technical Fees in UAE is charged at:

Section A (1 Mark)

Under which of the following categories of General Warranty Deed does the Grantor warrants that the property is free of any liens or encumbrances unless they're specifically stated in the deed?

Section A (1 Mark)

____________means that people resist inequitable outcomes; i.e., they are willing to give up some material payoff to move in the direction of more equitable outcomes.

Section C (4 Mark)

Read the senario and answer to the question.

Assuming that Mahesh owns a building which he insures along with its contents for Rs. 12 lakh. However the market value of the building and its content is Rs. 15 lakh. Assuming that the building along with its contents is partially destroyed by fire and the loss assessed of Rs. 1 lakh what is the amount of money insurance company would pay as claim reimbursement to Mahesh?

Section B (2 Mark)

In US which form tells your employer all they need to know about your tax-related allowance information?

Section C (4 Mark)

You purchased a call option for Rs3.45 seventeen days ago. The call has a strike price of Rs45 and the stock is now trading for Rs51. If you exercise the call today, what will be your holding period return? If you do not exercise the call today and it expires, what will be your holding period return?

Section A (1 Mark)

The covariance of the market returns with the stocks returns is 0.008. The standard deviation of the market is 8% and standard deviation of stock’s return is 11%. What is the correlation coefficient between stocks and market returns?

Section C (4 Mark)

Mr. Shyam has a portfolio consisting of two stocks A & B. Stock A has a standard deviation of 5 % while stock B has a standard deviation of 15%. Stock A comprises 40% of the portfolio and Stock B consists of 60%. If the correlation of returns of A & B is .5, the variance of return on the portfolio is _________.

Section A (1 Mark)

A(n)_______________ is a credit-rating agency that keeps records of borrowers' loan payment histories.

Section C (4 Mark)

Azhar aged 30 is a disciplined investor. He has started depositing Rs. 25,000 every year in an account that pays a return of 9% every year. He plans to increase his contribution by Rs. 5000 every year till his age 50. Calculate the amount he would be having in his account at this age.

Section C (4 Mark)

Read the senario and answer to the question.

As a CWM® which option would you recommend from the following to Neeraj and Kapil so that their tax liability is minimum if they invest in the debt based scheme