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

Section A (1 Mark)

Which of the following characteristics are unique to real estate that differ from other asset classes?

Section B (2 Mark)

If the currency of your country is appreciating, the result should be to ______ exports and to _______ imports.

Section C (4 Mark)

Calculate expected rate of return on the following portfolio.

Weight of X and Y in the portfolio is 50% and 50% respectively.

Section A (1 Mark)

A principal weakness of the Dow Theory is:

Section A (1 Mark)

You buy a investment plan by investing Rs. 5000/- per month for first 12years if the investment pays Rs. 5000 for the next 12 years and the rate of interest is 15% per annum compounded monthly. How much amount would you have after 24 years?

Section B (2 Mark)

How much total principal is repaid between the 1st and 17th payment interval of a 4.5-year loan for Rs 4567 at an interest rate of 7.44% compounded monthly. The payments are also monthly.

Section C (4 Mark)

Suppose an investor Mr. A buys or is holding ABC Ltd. currently trading at Rs. 4758. He decides to establish a collar by writing a Call of strike price Rs. 5000 for Rs. 39 while simultaneously purchasing a Rs. 4700 strike price Put for Rs. 27. Since he pays Rs. 4758 for the stock ABC Ltd., another Rs. 27 for the Put but receives Rs. 39 for selling the Call option, his total investment is Rs. 4746.

What would be the Net Payoff of the Strategy?

• If ABC Ltd closes at 4851

• If ABC Ltd closes at 5267

Section A (1 Mark)

Commodity exchanges enable producers and consumer to hedge their _______ given the uncertainty of the future.

Section B (2 Mark)

It was unconstitutional for the U.S. government to levy an income tax before the passage of which amendment?

Section A (1 Mark)

Wealth Enhancement is _____________

Section A (1 Mark)

Companies can build interest and enthusiasm by using databases to remember customer preferences. This strategy helps to which of the following?

Section C (4 Mark)

Blair Company has Rs5 million in total assets. The company’s assets are financed with Rs1 million of debt, and Rs4 million of common equity. The company’s income statement is summarized below:

The company wants to increase its assets by Rs1 million, and it plans to finance this increase by issuing Rs1 million in new debt. This action will double the company’s interest expense, but its operating income will remain at 20 percent of its total assets, and its average tax rate will remain at 40 percent. If the company takes this action, which of the following will occur?

Section A (1 Mark)

A rapidly growing GDP indicates a(n) ______ economy with ______ opportunity for a firm to increase sales.

Section B (2 Mark)

In a “Pure Play” model of wealth management

Section A (1 Mark)

The disposition effect relates to the fact that:

Section A (1 Mark)

The eligibility Criteria for Self Employed Professionals & Businessman for minimum age of the applicant in case of personal loan is:

Section B (2 Mark)

How much principal is repaid in the 77th payment interval on a RS 147 000 25-year mortgage if the mortgage is amortized over 20 years and the payments are monthly with rate of interest being 7.2% compounded monthly?

Section B (2 Mark)

Withholding Tax Rates for payments made to Non-Residents are determined by the Finance Act passed by the Parliament for various years. The current rates for Technical Services are:

Section C (4 Mark)

OMG Petro Ltd produces and markets crude oil. The following are selected numbers from the financial statements for 1992 and 1993 (in millions).

The firm had capital expenditures of Rs950 million in 1992 and Rs1 billion in 1993. The working capital in 1991 was Rs190 million, and the total debt outstanding in 1991 was Rs5.75 billion. There were 305 million shares outstanding, trading at Rs21 per share.

Estimate the cash flows to equity in 1992 and 1993(in Rs Millions)

Section C (4 Mark)

Data on following mutual funds is given below:

Risk free return is 8%. Calculate Sharpe measure.

Section B (2 Mark)

Which of the following two outcomes is an example of Loss Aversion Bias:

Section A (1 Mark)

The factors contributing to a Credit Score are :

Section A (1 Mark)

A general theoretical perspective in social psychology concerned with the issue of social perception. is known as_____________

Section A (1 Mark)

If an investor searches for patterns in security returns by examining various techniques applied to a set of data, this is known as:

Section A (1 Mark)

Conclusions about technical analysis suggest that:

Section B (2 Mark)

Last year, Owen Technologies reported negative net cash flow and negative free cash flow. However, its cash on the balance sheet increased. Which of the following could explain these changes in its cash position?

Section A (1 Mark)

___________CRM automates and improves customer-facing and customer supporting business processes