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Section A (1 Mark)
A _________ portfolio is a well-diversified portfolio constructed to have a beta of 1 on one of the factors and a beta of 0 on any other factor.
Section B (2 Mark)
Which one of the above statements is/are not a important needs of clients in the context of relationship management?
Section C (4 Mark)
Mr. Peter sells a Nifty Put option with a strike price of Rs. 4000 at a premium of Rs. 21.45 and buys a further OTM Nifty Put option with a strike price Rs. 3800 at a premium of Rs. 3.00 when the current Nifty is at 4191.10, with both options expiring on 31st July.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 3800
• If Nifty closes at 4500
Section A (1 Mark)
In US Over one-half the money spent by state and local governments goes to just three services. Which of the following is not one of these services?
Section B (2 Mark)
What is the future value of Rs. 5000 at the end of 5 years at 8% compounded annually?
Section A (1 Mark)
When two banks simply agree to exchange a portion of their customers' loan repayments, they are using:
Section A (1 Mark)
Which of the following is a challenge of making a consumer loan?
Section C (4 Mark)
Saurabh decided to invest Rs.1,00,000/- in a portfolio of equities and debt mutual funds. He invests Rs. 60,000/– in equities, and 40,000/– in debt mutual fund.
A year later, Saurabh’s portfolio worth reached to Rs. 1,35,000/– (90,000/– equity, 45,000/– debt mutual fund). During the year Rs. 2,500/– cash dividends was received on the equity and Rs. 1,000/– dividend was received on debt mutual fund. Find out Saurabh’s return on equity fund & debt mutual fund for the year?
Section C (4 Mark)
Saurabh contributes Rs. 10,000 every year starting from the end of the 5th year from today till the end of 12th year in the account that gives a ROI of 7.75% p.a. compounded half yearly. Calculate the Present Value of his contribution today.
Section B (2 Mark)
As a CWM you are considering the following bond for inclusion in the fixed income portfolio of your client:
What will be the duration of this bond? and What will be the effect of the changes on the duration of the bond if the coupon rate is 6% rather than 9%?
Section B (2 Mark)
The current market price of a share of XYZ stock is Rs50. If a call option on this stock has a strike price of Rs45, the call
Section A (1 Mark)
A Wealth Management model in which private client and Institutional Asset Management are kept entirely separate is known as
Section A (1 Mark)
_______________ consists of the constatation that people buy both insurances and lottery tickets .
Section A (1 Mark)
Accumulation, preservation and distribution are stages of
Section B (2 Mark)
Mr. Nimesh is bullish about ABC Ltd stock. He buys ABC Ltd. at current market price of Rs. 4000 on 4 July. To protect against fall in the price of ABC Ltd. (his risk), he buys an ABC Ltd. Put option with a strike price Rs.3900 (OTM) at a premium of Rs. 143.80 expiring on 31st July.
What would be the Pay-off of the strategy if the stock closes on 4200 at expiry?
Section A (1 Mark)
___________ is a measure of the ratio between the net income produced by an assets (usually real estate) and its capital cost.
Section C (4 Mark)
Mr. XYZ is bearish about Nifty and expects it to fall. He sells a Call option with a strike price of Rs. 2600 at a premium of Rs. 154, when the current Nifty is at 2694. If the Nifty stays at 2600 or below, the Call option will not be exercised by the buyer of the Call and Mr. XYZ can retain the entire premium of Rs.154.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 2900
• If Nifty closes at 2400
Section A (1 Mark)
If a female dies without leaving any issue them property inherited from her father or mother the property will devolve upon
Section C (4 Mark)
Read the senario and answer to the question.
If Mrs. Deepika, a conservative investor, has Rs. 50, lakhs today that she could invest for the next three months in a three month bank CD or in a stock .The bank CD offers a guaranteed return 6 % over the three-month period. Alternatively she thinks the price of the stock will rise by 5% over the next months. She is confused in taking the decision. Guide her in trade off between return and risk so that she makes a decision in choosing investments?
Section C (4 Mark)
Mr. XYZ buys a Nifty Call with a Strike price Rs. 4100 at a premium of Rs. 170.45 and he sells a Nifty Call option with a strike price Rs. 4400 at a premium of Rs. 35.40.
What would be the Net Payoff of the Strategy?
• if Nifty closes at 4200
• if Nifty closes at 5447
Section B (2 Mark)
In a wealth management Platform which of the following is/are the functions of Middle/Back Office – Advisor
Section B (2 Mark)
Mansi needs Rs. 25,000/-, 5 years from now. She would like to make equal payments at the Begin of each year from now onwards into an account that yields annual ROI @ 7 % per annum. What should be her annual payments?
Section C (4 Mark)
The Puri’s family includes a financially well-informed couple, both aged 34, and two children aged 4 and 6. They are financially sound, but were not in the market during the Indian Bull market of the 2003 to 2007 as many of their neighbors were. The couple’s total income, Rs. 12,00,000, which they do not expect to grow significantly in times to come
They have saved 15,00,000, which they hope will be the financial foundation from which they will send their children to college and retire comfortably.
Which of the following biases does the Puri Family suffer from:?
Section B (2 Mark)
Mr. Aggarwal is working in a reputed company and earning Rs. 4,50,000/- p.a. and is now 55 years old. He has invested Rs. 2,00,000/- in an annuity which will pay him after 5 years a certain amount p.a. at the beginning of every year for 10 years. Rate of interest is 8% p.a. Calculate how much he will receive at the beginning of every year after 5 years?
Section A (1 Mark)
The eligibility Criteria for Personal Loans Salaried Individuals for Maximum Age of Applicant at Loan Maturity in case of personal loan is:
Section C (4 Mark)
Mr. XYZ sells a Nifty Put option with a strike price of Rs. 4000 at a premium of Rs. 21.45 and buys a further OTM Nifty Put option with a strike price Rs. 3800 at a premium of Rs. 3.00 when the current Nifty is at 4191.10, with both options expiring on 31st July.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 3287
• If Nifty closes at 4925
Section A (1 Mark)
Supporting customers through the process of selecting, purchasing, and maintaining a product or service is known as:
Section B (2 Mark)
Eric, who has lived in the Netherlands for the whole of his life, arrives in the UK on 1 June 2011 and remains in the UK until 31 December 2011, when he returns permanently to the Netherlands. His UK residence status for 2011-12 is:
Section A (1 Mark)
In case of Credit Assessment, if the lender accepts the application and takes it forward towards acceptance provided it passes through the risk assessment criterion, then the Credit Score Band of the borrower would be:
Section B (2 Mark)
A stock with a Beta of 0.7 currently priced at Rs 50 is expected to increase in price to Rs 55 by year end and pay Rs 1 as dividend. The expected market return is 15% and the risk free rate is 8%. The stock is:
Section C (4 Mark)
Maxis Ltd reported Earnings Per Share of Rs 2.10 in 1993, on which it paid dividends per share of Rs 0.69. Earnings are expected to grow 15% a year from 1994 to 1998, during which period the dividend payout ratio is expected to remain unchanged. After 1998, the earnings growth rate is expected to drop to a stable 6%, and the payout ratio is expected to increase to 65% of earnings. The firm has a beta of 1.40 currently, and it is expected to have a beta of 1.10 after 1998. The Risk Free Rate of Return is 6.25%.
What is the value of the stock, using the two-stage dividend discount model?
Section B (2 Mark)
What is the correlation coefficient between the companies A and B, if their covariance is 23 and their standard deviation is 8 and 7 respectively?
Section B (2 Mark)
Both __________ depend on electronic information that has been collected about customers, in place of human knowledge, to build and manage relationships.
Section B (2 Mark)
All of the following are assumptions made by technical analysts except:
Section A (1 Mark)
The price that the buyer of a put option pays to acquire the option is called the
Section A (1 Mark)
The Net Operating Income (NOI) for a real estate investment is calculated as:
Section A (1 Mark)
The difference between the cash price and the futures price on the same asset or commodity is known as the
Section C (4 Mark)
Mr. Saxena, age 45 years, is a software engineer and promoter of an Indian MNC. His family comprises his wife Anupama, age 43 years, who is a house wife, elder son Arup, 16 years (studying in 10th standard) and daughter Aarti, 14 years (studying in 8th standard). The family resides in their self owned residential house in Mumbai. Most of their life amenities such as cars, abroad vacations and full education cost of both kids are provided by Mr. Saxena’s company, as he is the Managing Director of his company. The company is growing consistently and is on way to become a global legend in its field of operations. As such the future prospects of Mr. Saxena are generous and progressive.
Mr. Saxena is now planning to allocate his resources in the right fashion with your help as a Chartered Wealth Manager.
For this, he has disclosed his current personal financial details as follows:
Other details for FY 2007–08
1.Mr. Saxena has made investments worth Rs. 1.50 Lakh qualified U/S 80C.
2.He has donated Rs. 50,000 to Prime Ministers National Relief Fund.
3.He has transferred interest received by him on debentures to his wife’s bank account the same date he received it.
4.Mr. Saxena’s minor son, Arup, is a recognized child artist in children cinema and documentary films. Arup earned a sum of Rs. 1,50,000 from his assignments.
Mr. Saxena wants to resolve all estate bequeathing matters in his life time so that there should be no dispute after his death. For this purpose he has prepared a “Holograph Will”.
Current estimates of economy are positive and interest rates are not likely to increase further in near future. The family has a health cover provided by the company of Mr. Saxena. Also his house with all its contents is insured adequately.
Section C (4 Mark)
Read the senario and answer to the question.
What is the Basic Liquidity Ratio for the couple? Is it sufficient considering Vinay’s circumstances?
Section A (1 Mark)
Deduction under section 80-IC is allowed to the extent of:
Section B (2 Mark)
Which of the following is a reasonable assumption to make about the understanding of a client on the Wealth planning Process?
Section C (4 Mark)
You are considering adding a new product to your firm's existing product line. It should cause a 15 percent increase in your profit margin (i.e., new PM = old PM x 1.15), but it will also require a 50 percent increase in total assets (i.e., new TA = old TA x 1.5). You expect to finance this asset growth entirely by debt. If the following ratios were computed before the change, what will be the new ROE if the new product is added and sales remain constant?
Section A (1 Mark)
Which of the following industry categories is said to be “bought to be sold?”
Section C (4 Mark)
Read the senario and answer to the question.
If Saxena’s debentures have a balance maturity period of 15 years &the coupons are payable annually, what should be the market valuation of these debentures, if risk free interest rate is taken as the required IRR?
Section B (2 Mark)
Calculate the duration of a 10 year annual annuity that has a yield of 7%.
Section B (2 Mark)
Which of the following is true with regard to wealth planner’s liability?
Section A (1 Mark)
Mr. Vikas is now 50 years old. He has invested some amount in an annuity which will pay him from the END. of 5th year Rs. 35,000/- p.a. at the end of every year for 10 years. Rate of interest is 7% p.a. Calculate how much he has invested now?
Section C (4 Mark)
You have collected the following information regarding Companies C and D:
The two companies have the same total assets.
The two companies have the same operating income (EBIT).
The two companies have the same tax rate.
Company C has a higher debt ratio and a higher interest expense than Company D.
Company C has a lower profit margin than Company D.
Based on this information, which of the following statements is most correct?
Section A (1 Mark)
By agreeing to service any assets that are packaged together in the securitization process a bank can:
Section A (1 Mark)
If the deceased has two widows, four sons and two daughters then what is the share of each widow
Section B (2 Mark)
After making an investment, assume that an investor overhears a news report that has negative implications regarding the potential outcome of the investment he has just executed. How likely is he to then seek information, if he exhibits self attribution bias, that could confirm that you’ve made a bad decision?
Section C (4 Mark)
Which of the following application of Options Strategy is correct?
Section A (1 Mark)
Which of the following measures is lowest for a currently callable bond?
Section A (1 Mark)
A dividend paid by a company which is a resident of India to a resident of the United Kingdom may also be taxed in India but the Indian tax so charged shall not exceed __________per cent of the gross amount of the dividend.
Section C (4 Mark)
National City Corporation, a bank holding company, reported earnings per share of Rs2.40 in 1993, and paid dividends per share of Rs1.06. The earnings had grown 7.5% a year over the prior five years, and were expected to grow 6% a year in the long term (starting in 1994). The stock had a beta of 1.05 and traded for ten times earnings. The treasury bond rate was 7%.
Estimate the P/E Ratio for National City Corporation and the long term growth rate that is implied in the firm's current P/E ratio.
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 B (2 Mark)
A taxpayer has taxable income for 2011-12 (after deducting the personal allowance) of £185,300. None of the income is derived from savings or dividends. The income tax liability for the year is:
Section B (2 Mark)
Which of the following are the objectives of National Housing Bank in Indian Real Estate Market?
Section A (1 Mark)
The premium on all other riders put together should not exceed _____ of the premium on the base policy
Section A (1 Mark)
Income which accrue or arise outside India but are received directly in India are taxable in case of:
Section B (2 Mark)
You purchased one XYZ March 50 call and sold one XYZ March 55 call. Your strategy is known as
Section B (2 Mark)
Vikash has following portfolio with related details given below:
Calculate the portfolio beta?
Section A (1 Mark)
A(n) _________________________ combines a normal debt instrument with a credit option. It allows the issuer of the debt instrument to lower its loan repayments if some significant factor changes.
Section B (2 Mark)
The income of any university or other educational institution existing solely for educational purposes and not for the purposes of profit is exempt under clause (iiiad) of Section 10(23C) if the aggregate annual receipts’ of such university or educational institution do not exceed.
Section A (1 Mark)
At the time of renewal of working capital limits by a bank, the loan officer observed that M/s ABC’s utilisation of funds on a long term basis is 80% of the long term sources during the year. Which among the following would be the result of this kind of financial management?
Section A (1 Mark)
A good customer relationship management program will allow a business to:
Section C (4 Mark)
Mr. Vinay, aged 36 years is working in a company, at a managerial level, and has an income of Rs. 40,000 p.m. comprising of Basic salary and DA as on 31/03/2008. His other allowances amount to Rs. 18,000 p.m. He would retire at the age of 60 years. His wife Reena, aged 32 years, is working in a High School and has a post-tax income of Rs. 2,76,000 per annum. Mr. and Mrs. Vinay have two daughter Deepika, aged 10 years and Rekha, aged 5 years.
Mr. Vinay’s father died of heart attack, 5 months back, at the age of 72 years, leaving a house (Value as on date Rs. 30 lakh) in which Vinay is staying at present and other assets worth Rs. 20 lakh (shares of large cap companies worth Rs. 10 lakh, Fixed deposit in post office of Rs. 5 lakh and Bank FD of Rs. 5 lakh) in Vinay’s mother’s name. His mother 63 years old is disabled and fully dependent on Vinay, he being the only child of his parents. Vinay has to keep an attendant for his mother, round the clock.
The Assets of the Couple are:
1.Cash in HandRs. 18,000
2.Bank balanceRs. 40,000 (Vinay) Rs. 25,000 (Reena)
3.JewelleryRs. 400000 (Reena)
4.Money Market Mutual FundRs. 3,00,000 (Vinay)
5.Shares
?ICICI Bank 200 shares bought at Rs. 1000 per share,
?Infosys 150 shares bought at Rs. 1700 per share
?Reliance Communication 350 shares bought at Rs. 350 share.
6.Debt oriented mutual FundsRs. 2,00,000
7.PPFRs. 5,00,000 (Vinay), Rs. 4,00,000 (Reena)
8.House in the joint name of Vinay and Reena with 50% ownership of each. This house has two floors and is let out for Rs. 9,000 pm for each of the floors. Present value of this house is Rs. 60,00,000.
Vinay and Reena had taken a housing loan of Rs. 15,00,000 each. Of this Rs. 10,00,000 is pending on each name. They are presently paying an EMI of Rs. 20,000 each, Rate of interest being 10.75% p.a.
The Retirement Benefits of Vinay after 15 years hence, are expected to be as follows:
Vinay has taken a term insurance of Rs. 30 lakh for 20 years, which is expiring 5 years from now. He has no other insurance. Vinay’s monthly household/ living expenses are Rs. 50,000. This excludes EMI on loans but includes all other expenses including expenses on his mother’s care.
Vinay expects Deepika to get married 12 years hence for which likely expenditures in today’s term is 15 lakh.
Vinay’s salary is likely to grow at 7% pa and Reena’s salary is likely to grow at 6% p.a. Risk free rate of interest is 8% pa and inflation is 6% p.a. Long term growth on Equity/Equity based MF is taken as 15% p.a.
Section B (2 Mark)
In the year to 31 March 2012, a UK resident company made a UK trading profit of £800,000 and received net overseas income of £26,000 (net of 20% withholding tax). These were the company's only sources of income. The company also paid a qualifying charitable donation of £5,000.
For double tax relief purposes, the charitable donation will be allocated as a deduction from the company's overseas income. True or False?
Section C (4 Mark)
Sajan Mathews, aged 29 years (as on 2nd April, 2010), is working with a Multi National Company since December 2004. He has approached you, a CWM® for preparing his wealth plan. He is staying in his own house at Ahmedabad. His wife Jennifer, aged 31 years, is a fashion designer. She has earned a net profit of Rs. 4 lakh in FY 2008-09. They have a son, Mark of age 4 years (born on 12.02.2006), and a daughter, Stephanie (born on of 23.09.2009). Sajan is also supporting his parents staying in their own house at Surat to whom he sends Rs. 10,000 p.m. His monthly house hold expenses are Rs. 30000 p.m. (excludes his investments, payment of premia and EMIs). Sajan normally gets 5% increase in his gross salary year-on-year in the beginning of every financial year, apart from bonus. The effect for this year is yet to take place, though he has received a bonus of Rs. 3,31,680 for the year 2009-10. He has taken a family floater policy for health insurance involving an annual premium of Rs. 16268 and a total cover of Rs. 15 lakh.
Current Assets & Liabilities of the Family (As on 31st March, 2010 unless otherwise specified in foot notes)
____________
1.Purchased on 25th October, 2006, annual premium paid Rs. 14,798
2.Purchased on Mark’s 2nd birthday for a term of 15 years; annual premium Rs. 41,374
3.Subscribed on 01.09.2008 @ 10% p.a., with interest credited quarterly to his savings account; renewed at same rate for one year on 01.09.2009 without penal provision for premature withdrawal
4.Home loan of Rs. 17 lakh taken on 1st November, 2004 at a fixed interest of 7.5% p.a. for a 15 year term.
5.Car loan of Rs. 4.50 lakh taken on 1st April, 2008 at a fixed interest of 11.25% p.a. for a 4-year term.
Goals:
1.To provide for higher education of Mark and Stephanie. Initial expenses at their respective age of 18 years, Rs. 3 lakh (current cost), and subsequently Rs. 2 lakh p.a. for the next two years, and Rs. 3.5 lakh p.a. for the following 2 years.
2.Marriage expenses of Rs. 15 lakh (current cost) for each child at their respective age of 27 years.
3.Retirement corpus at the age of 58 years to sustain 70% of pre-retirement household expenses till his lifetime and 50% till stephanie’s expected life.
4.A Bigger house valued at Rs. 50 lakh today, a year from now.
5.To build a separate fund for vacation expenses of Rs. 2 lakh (at current cost) every year 10 years from now so that the corpus so built is self-sustaining till the marriage of Stephanie.
Assumptions:
Regarding long-term pre-tax returns on various asset classes:
Regarding economic factors:
Section B (2 Mark)
A bond has a convexity of 57.3. The convexity effect if the yield decreases by 110 basis points is closest to:
Section B (2 Mark)
The ____________ provides an unequivocal statement on the expected return-beta relationship for all assets, whereas the _____________ implies that this relationship holds for all but perhaps a small number of securities.
Section A (1 Mark)
The way to reduce tax liability by taking full advantage provided by the Act is
Section B (2 Mark)
Suppose the price of a share of CAS stock is Rs500. An April call option on CAS stock has a premium of Rs5 and an exercise price of Rs500. Ignoring commissions, the holder of the call option will earn a profit if the price of the share
Section B (2 Mark)
Which of the following statements with respect to DTAA is/are correct?
Section A (1 Mark)
According to the __________________ if irrational traders cause deviations from fundamental value, rational traders will often be powerless to do anything about it.
Section A (1 Mark)
A(n) _____________ is an over-the-counter agreement offering protection against loss when default occurs on a loan or other debt instrument.
Section A (1 Mark)
Shyam invests in a plan in which he has to pay Rs. 10,000/- per year Starting from the end of 5th year till the end of 12th. How much amount Should he invest today in order to meet his objective. If the interest rate is 10%p.a.?
Section A (1 Mark)
----------- shifts the weights of securities in the portfolio to take advantage of areas that are expected to do relatively better than other areas.
Section B (2 Mark)
As Per Article 12 Double Taxation Avoidance Agreement with US, _____per cent of the gross amount of the royalties or fees for included services as defined in this Article, where the payer of the royalties or fees is the Government of that Contracting State, a political sub-division or a public sector company.
Section C (4 Mark)
Read the senario and answer to the question.
Vinay has come across two projects, each with a 12% required rate of return and under given cash flows:
If the projects are independent, you being a CWM® would advise Vinay to:
Section B (2 Mark)
A taxpayer has taxable income for 2011-12 (after deducting the personal allowance) of £75,200. None of the income is derived from savings or dividends. The income tax liability for the year is:
Section B (2 Mark)
Which of the following statements are correct with regard to Bailard, Biehl, and Kaiser Five-Way Model?
Section B (2 Mark)
The minimum service required for entitlement to payment of gratuity under the Act, in case of an employee leaving service by death or incapacitation is
Section B (2 Mark)
Calculate the NOI for an office building with the following information:
Section B (2 Mark)
The term “permanent establishment” includes especially:
Section B (2 Mark)
Calculate the beta on a portfolio from the following data:
Section C (4 Mark)
Allianz is a number one accredited institute for the Engineering in New Delhi. It pays dividend per share of Rs. 0.24 on reported earning per share of Rs. 0.512 in 2007. The firms earnings per share have grown at 8% over the prior 5 year but that growth rate is expected to decline linearly over the next 5 years to 3%, while the payout ratio remains unchanged. The beta for the stock is 0.9. The risk free rate is 4.2% and the market risk premium is 4%.Calculate the price of the stock.
Section A (1 Mark)
The minimum income criteria for Personal Loans in case of Salaried employees is:
Section A (1 Mark)
The demand for insurance tends to be inelastic because of
Section C (4 Mark)
Read the senario and answer to the question.
You have reviewed the investments of Nimita for the purview of retirement. You advise that a balance be restored from risk perspective and accordingly Rs. 15 lakh be shifted to a Debt MF scheme. You advise to further start SIPs immediately in the ratio of 60:40 in the newly started debt MF scheme and the existing Equity MF scheme for the next 21 years to accumulate a corpus so that the same sustains for the next 25 years if invested in an investment instrument yielding 7.50%. What approximate amount of SIPs should be made in Debt and Equity MF schemes?
Section A (1 Mark)
During “Financial Independence” life stage, typical asset allocation should be
Section A (1 Mark)
A document that is executed by the sellor of the flat so that the Cooperative Society to which the flat belongs and the purchaser is completely indemnified against any claims that any other person may make on the rights of ownership of the flat or other any that is yet unpaid by the seller ( eg. taxes) is known as_________
Section A (1 Mark)
Where the return of income is filed after the due date specified u/s 139(1):
Section B (2 Mark)
Ramesh has invested Rs 3,000/- in Reliance Growth Fund two years ago and its worth is now 4,000/-. Ram has received dividend Rs.300 at the end of two years. Calculate Compounded annual growth rate (CAGR) of Ram’s investment.
Section A (1 Mark)
Which of the following factors have proven most important in credit scoring models?
Section C (4 Mark)
Read the senario and answer to the question.
What is the monthly extra saving at beginning required to be done by Raman during his remaining working period to accumulate his required retirement corpus?
Section A (1 Mark)
____________refers to the tendency of people to think of currency in nominal, rather than real terms
Section A (1 Mark)
Conservative retirees likely have ____ than they did early in their careers.
Section A (1 Mark)
A bank that wants to protect itself from higher credit costs due to a decrease in its credit rating might purchase _________________________.
Section B (2 Mark)
A Resident is defined as not Ordinarily Resident provided such individual has been: a non- resident in 9 out of 10 Financial Years preceding the current year or his stay in India totals to _________days or less in ___________financial years preceding the current year.
Section B (2 Mark)
In case of a defined benefit plan where the benefit payable is based on the terminal salary, an increase in of 10% of the wages of the employees would increase the contribution to be made by the employer for the benefit by
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)
As a CWM you are required to calculate the tax liability of an individual whose Taxable income is:
• $ 85650 in US dollars and he is a US citizen (single individual)
• $ 159000 in SGD and he is a citizen of Singapore
Section A (1 Mark)
__________ organization try to segment their customers based on what product the customer purchased.
Section B (2 Mark)
In US, all states except _________________ require their state, via state constitutional or statutory requirements, to balance their budget.
Section A (1 Mark)
Assessing client’s level of risk tolerance is done while
Section A (1 Mark)
_____________seek to explain people's preferences in relation to consumption and saving over the course of their life.
Section B (2 Mark)
When returns to an investor’s portfolio increase, to what does he believe the change in performance is mainly due (if the investor exhibits self attribution bias)?
Section A (1 Mark)
If a certain stock has a beta greater than 1.0, it means that
Section A (1 Mark)
Given below is the portfolio return; calculate the expected portfolio rate of return:
Section A (1 Mark)
What amount needs to be invested today at 10 % per annum, so that it pays Rs. 1 lac per annum for 5 years, starting from 6th year to 10thyear. First payment starts at BEGIN of 6thyear.?
Section A (1 Mark)
Pure premium and Loss Ratio methods are two methods to determine
Section A (1 Mark)
A market timing approach that increases the proportion of funds in stocks when the stock market is expected to be rising, and increases cash when the stock market is expected to be falling is a:
Section A (1 Mark)
The concept of indemnity is based on the key principle that policyholders should be prevented from
Section A (1 Mark)
To ensure compliance under this method of lending, the current ratio of the concern should not be less that _________
Section B (2 Mark)
Which of the following are the two skills associated with being a good listener?
Section C (4 Mark)
Read the senario and answer to the question.
Raman is considering the purchase of a office building and, as part of his analysis, from the following given data calculate the appraised value of the property using the Income Approach?
Section A (1 Mark)
If the proposer does not disclose fully all the material facts at the time of Proposal the principle violated
Section B (2 Mark)
Calculate the standard deviation on a portfolio from the following data
Section B (2 Mark)
Equity stock of X ltd. is currently selling at Rs. 35/- per share. The dividend expected next year is Rs. 2/- per share and the investor’s required return in this stock is 15 % per annum. If the constant Growth Model applies to X ltd. then calculate the Growth Rate.
Section A (1 Mark)
The cumulative number of futures contracts that are not offset at any point in time is called:
Section B (2 Mark)
According to the efficient markets view, value stocks earn higher expected return than growth stocks because:
Section A (1 Mark)
Which of the following income is not exempt under section 10-IT Act 1961?
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 C (4 Mark)
Ms. Nimita Shah, aged 34 years as on 2nd April 2010, is Vice President in a Mumbai-based firm. She has twin daughters Revati and Savitri of age 12 years and she is the sole guardian of her children pursuant to her recent divorce. She is currently residing in a rented house. Both her daughter are studying in the 6th Standard. She has approached you, a CWM®, for preparing her Wealth plan. She has shared the following financial information with you:
You, in consultation with Nimita have crystallized the following financial goals for her family and the preliminary roadmap to achieve them:
1.Send both daughters to a Boarding school – immediately – Outlay Rs. 1.80 lakh (present cost) per child p.a. – for 6 years – To be met on year to year basis by investing a suitable corpus.
2.Buy a house–in the next three years – Outlay of Rs. 80 lakh – Take a loan for 15 year term.
3.Invest suitably for the Higher Education of both children – Higher Education starts after 6 years – present cost Rs. 4.5 lakh p.a. for each child for a team of 5 year.
4.To invest monthly for Revati and Savtri’s wedding when they complete 24 years of age. The estimated present cost of one such marriage is Rs. 15 Lakh
5.Retirement Corpus for self – Corpus to be accumulated in 21 years – Corpus to sustain an annuity of Rs. 1.25 lakh p.m. (current cost) inflation linked for a post – retirement life of 25 years.
6.A world tour with both of her kids – After 11 years – outlay of Rs. 8 lakh at current prices.
7.A suitable Estate Planning to cover all her physical and financial assets.
Assumptions:
Section A (1 Mark)
Land plus anything permanently fixed on it, including building, sheds and other items attached to the structure refers to _____.
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)
An insured becomes entitled for getting No Claim Bonus only at the renewal of a policy after the expiry of the full duration of _________ months.
Section A (1 Mark)
____________ may be responsible for the prevalence of active versus passive investments management.
Section B (2 Mark)
Mr. X gives Rs. 200000 to Mrs. X as gift. She invests in a proprietary concern and incurs a loss of Rs. 40000.
Section B (2 Mark)
Which of the following statements with respect to International Taxation Structure is/are correct?
Section A (1 Mark)
The covariance of the market returns with the stocks returns is 0.007. The standard deviation of the market is 7% and standard deviation of stock’s return is 10%. What is the correlation coefficient between stocks and market returns?
Section A (1 Mark)
Which of the following is not a Key Benefit of the In-kind process used by the ETFs?
Section C (4 Mark)
Read the senario and answer to the question.
Mr. Bhaitia will continue to invest Rs. 10,000 in his PPF a/c at the beginning of each year till his retirement. Then calculate how much he has to save extra at the end of per month in a scheme to achieve his retirement corpus with a yield of 10%?
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 C (4 Mark)
Read the senario and answer to the question.
Which types(s) of investment(s), would be consistent with their retirement goal?
Section B (2 Mark)
If one earns 10% on investment but inflation is 2%, real rate of return is
Section A (1 Mark)
Dividend received by a shareholder from an Indian company the whole of whose income is agricultural income shall be treated as:
Section C (4 Mark)
Read the senario and answer to the question.
Calculate the Solvency ratio?
Section A (1 Mark)
In case of self occupied property, higher deduction u/s24(b) for interest on loan for construction can be claimed if borrowing was made
Section C (4 Mark)
In addition to social security benefits of $6,000, Mr. and Mrs. Lopez have adjusted gross income of $36,000, tax-exempt interest of $1,000 and will file a joint return.
Determine the taxable portion of their social security benefits.
Section B (2 Mark)
A person is treated as being UK resident for a tax year if he or she is physically present in the UK for at least ___ days in the year or makes regular visits to the UK averaging at least ___ days per year. Fill in the blanks.
Section B (2 Mark)
If a portfolio manager has a good ability to forecast overall market but a poor ability to select undervalued securities, the following makes sense for him.
Section B (2 Mark)
___________, the net profit margin realized by the enterprise from an international transaction entered into with an associated enterprise is computed in relation to cost incurred or sales affected or assets employed or to be employed in the enterprise or having regard to any relevant base.
Section A (1 Mark)
For making a personal financial statement for a client, the optimum cash levels would be
Section C (4 Mark)
KB, a household product manufacturer, reported earnings per share of Rs3.20 in 1993, and paid dividends per share of Rs1.70 in that year. The firm reported depreciation of Rs315 million in 1993, and capital expenditures of Rs475 million. (There were 160 million shares outstanding, trading at Rs51 per share.) This ratio of capital expenditures to depreciation is expected to be maintained in the long term. The working capital needs are negligible. KB had debt outstanding of Rs1.6 billion, and intends to maintain its current financing mix (of debt and equity) to finance future investment needs. The firm is in steady state and earnings are expected to grow 7% a year. The stock had a beta of 1.05. (The Risk Free Rate is 6.25%.)
Estimate the value per share, using the FCFE Model.
Section A (1 Mark)
An individual is said to be a resident in India in the previous year (in which the Feb month has 29 days) if he is in India in that year for a period of ______days or more.
Section A (1 Mark)
Which of the following act is done by the most dissatisfied customers?
Section A (1 Mark)
The____________________ in commercial real estate requires that the tenant pay a significant share of expenses of operation, as well as all taxes and insurance related to their rental unit.
Section B (2 Mark)
Which of the following Biases are exhibited by Active Accumulator?
Section C (4 Mark)
Suppose Sunil visits his favorite coffee shop and encounters his good friend Rohit. Rohit raves about his stockbroker, whose firm employs an analyst who appears to have made many recent successful stock picks. The conversation goes something like this:
SUNIL: Hi, Rohit, how are you?
ROHIT: Hi, Sunil. I’m doing great! I’ve been doing superbly in the market recently.
SUNIL: Really? What’s your secret?
ROHIT: Well, my broker has passed along some great picks made by an analyst at her firm.
SUNIL: Wow, how many of these tips have you gotten?
ROHIT: My broker gave me three great stock picks over the past month or so. Each stock is up now, by over 10 percent.
SUNIL: That’s a great record. My broker seems to give me one bad pick for every good one. It sounds like I need to talk to your broker; she has a much better record!
Which of the following biases have been exhibited by Gaurav?
Section C (4 Mark)
Read the senario and answer to the question.
Raman has invested Rs. 1,50,000, 30% of which is invested in Company A, which has an expected rate of return of 15%, and 70% of which is invested in Company B, with an expected return of 12%. What is the expected percentage rate of return?
Section B (2 Mark)
In the year to 31 March 2012, A Ltd (which is UK resident) made a UK trading profit of £100,000. The company's only other income consisted of rents received of £52,500 (net) from an investment property in Germany. These rents were received net of withholding tax of 25%. A Ltd has no associated companies.
The credit for double tax relief that will be given in the corporation tax computation for the year will be:
Section A (1 Mark)
Amit has monthly net income of Rs10500. He has a house payment of Rs 4500 per month, a car loan with payments of Rs 2500 per month, a Visa card with payments of Rs 500 per month, and a credit card with a local department store with payments of Rs 1000 per month.
What is Amit's debt payments-to-income ratio?
Section A (1 Mark)
While choosing wealth management firms the criteria a client would consider include is/are:
Section C (4 Mark)
Read the senario and answer to the question.
Calculate the Net Worth of Mr. Adhikari as on 31/03/2009.
TESTED 29 Apr 2024
