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 B (2 Mark)
Conventional theories presume that investors ____________ and behavioral finance presumes that they ____________.
Section C (4 Mark)
Pizer Drugs, a large drugstore chain, had sales per share of Rs122 in 1993, on which it reported earnings per share of Rs2.45 and paid a dividend per share of Rs1.12. The company is expected to grow 6% in the long term, and has a beta of 0.90. The current Risk Free Rate is 7%.
Estimate the appropriate Price for Pizer Drug and what would the profit margin need to be to justify the price per share if the stock is currently trading for Rs34 per share, assuming the growth rate is estimated correctly,
Section A (1 Mark)
An appealing feature of options on futures contracts is that:
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 B (2 Mark)
Ram is working in Rashid Enterprises, a proprietorship firm.During his working hours Ram was injured seriously. Due to this injury Ram was hospitalized for six months. Ram is the only bread winner of his family. Ms. Rashid, the proprietor of Rashid Enterprises is liable to pay damages to Ram. Under which of the following policy Rashid can protect himself from this liability?
Section A (1 Mark)
In a short call, profit is
Section A (1 Mark)
The long term use is 120% of long term source. This indicates the unit has
Section A (1 Mark)
In which of the following is the loss unlimited?
Section C (4 Mark)
As a CWM you are required to calculate the tax liability of an individual whose taxable income is:
• $ 83560 in SGD and he is a Singapore citizen
• £ 73150p.a (only employment) and he is a UK citizen
Section A (1 Mark)
The legal heir of the deceased who receives family pension is allowed a standard deduction from such family pension received to the extent of:
Section A (1 Mark)
A call option on a stock is said to be in the money if
Section A (1 Mark)
Mr. Dhir is now 50 years old. He has invested Rs. 1,50,000/- in an annuity which will pay him after 10 years a certain amount p.a. at the beginning of every year for 10 years. Rate of interest is 7% p.a. Calculate how much he will receive at the beginning of every year after 10 years?
Section A (1 Mark)
While matching orders for equity trading in NSE, which one of the following gets precedence over all the others?
Section A (1 Mark)
Mr. Naresh is working in a reputed company and earning Rs. 5,00,000/- p.a. and is now 50 years old. He has invested Rs. 2,50,000/- in an annuity which will pay him after 5 years a certain amount p.a. at the end of every year for 10 years. Rate of interest is 8% p.a. Calculate how much he will receive at the end of every year after 5 years?
Section B (2 Mark)
In 2011-12, an individual receives net building society interest of £792. The equivalent gross income is:
Section B (2 Mark)
Investors will choose investments that resonate with their own personality or that have characteristics that investors can relate to their own behavior. Taking the opposite view, investors ignore potentially good investments because they can’t relate to or do not come in contact with characteristics of those investments. For example, thrifty people may not relate to expensive stocks (high price/earnings multiples) and potentially miss out on the benefits of owning these stocks.
Which of the following Availability Bias have been exhibited in the case above?
Section C (4 Mark)
Read the senario and answer to the question.
Raman’s company has made plans for the next year for a new project. It is estimated that the company will employ total assets of Rs. 900 lakh, 75% of the assets being financed by borrowed capital at an interest cost of 6% per year. The direct costs are estimated at Rs. 530 lakh. All other operating expenses are estimated at Rs. 95 lakh. The goods will be sold to customers at 150% of the direct costs. Income tax rate is assumed to be 30%. Calculate net profit margin and return on owners’ equity.
Section B (2 Mark)
Buyers of call options __________ required to post margin deposits and sellers of put options __________ required to post margin deposits.
Section A (1 Mark)
_________________ is the most important source of revenue for states in US.
Section A (1 Mark)
Which of the following statements is/are correct?
Section C (4 Mark)
Asit an industrialist wants to buy a car presently costing Rs. 10,00,000/- after 5 years. The cost of the car is expected to increase by 10% p.a for the first 3 years and by 6% in the remaining years. Asit wants to start a SIP with monthly contributions in HDFC Top 200 Mutual Fund. You as a CWM expect that the fund would give an average CAGR of 12% in the next 5 years. Please advise Asit the monthly SIP amount starting at the beginning of every month for the next 5 years to fulfill his goal of buying the Car he desires.
Section B (2 Mark)
A bank recently loaned you Rs15,000 to buy a car. The loan is for five years (60 months) and is fully amortized. The nominal rate on the loan is 12 percent, and payments are made at the end of each month. What will be the remaining balance on the loan after you make the 30th payment?
Section A (1 Mark)
How can complaints provide the firm with great value?
Section A (1 Mark)
The fact that a consumer feels a strong moral and ethical responsibility to repay a loan on time refers to the ______________________ of that individual.
Section A (1 Mark)
A company making an IPO can avail which of the following option?
Section A (1 Mark)
The two components of EPS are
Section A (1 Mark)
Fiscal policy is difficult to implement quickly because
Section C (4 Mark)
Read the senario and answer to the question.
Keshav purchased a Health Insurance. The policy has a calendar-year deductible of Rs. 500 and 80:20 as coinsurance. Keshav was hospitalized with a covered illness on January 23rd 2009. This hospitalization was his first claim under the said policy for the calendar year. His covered medical expenses were Rs. 20,500. How much of this amount will the insurer pay and how much will Keshav be required to pay to the Hospital?
Section A (1 Mark)
Which of the following is not true about traditional defined benefit plans?
Section B (2 Mark)
The Wilson Corporation has the following relationships:
What is Wilson’s profit margin and debt ratio?
Section A (1 Mark)
Depending on how questions are asked, ___________ can cause investors to communicate responses to questions about risk tolerance that are either unduly conservative or unduly aggressive.
Section A (1 Mark)
The minimum annual income for availing Auto 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)
For claiming exemption u/s 54G, the assessed shall acquire the new asset within:
Section A (1 Mark)
How many types of power of attorney are there?
Section A (1 Mark)
A rapidly growing GDP indicates a(n) ______ economy with ______ opportunity for a firm to increase sales.
Section C (4 Mark)
Read the senario and answer to the question.
Nimita purchased 500 shares of ABC Ltd., a listed company at Rs. 45 per share on Sep. 15,2002. The company offered to buy back its shares on June 15, 2009 which Nimita accepted at a price of Rs. 75 per share on Jul 1, 2009. What is the tax liability in the hands of Nimita for this transaction for Assessment Year 2010-11? Cost inflation indices are 2002-03: 447 and 2009-10 632. (Ignore Education Cess)
Section A (1 Mark)
The proposed Fair Tax would change the U.S. tax system and instead:
Section B (2 Mark)
How much interest is paid in total on a 3-year loan for Rs27 400? The interest rate is 8.6% compounded monthly and the payments are monthly?
Section B (2 Mark)
Which of the following is an assumption of two stage dividend discount model?
Section C (4 Mark)
Phoenix Ltd has Rs 50,00,000 in total assets. The company’s assets are financed with Rs 10,00,000 of debt, and Rs 40,00,000 million of common equity. The company’s income statement is summarized below:
The company wants to increase its assets by Rs 10, 00,000, and it plans to finance this increase by issuing Rs 10, 00,000 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 C (4 Mark)
Consider the following information for three mutual funds
Risk free return is 6%. Calculate Treynor measure.
Section A (1 Mark)
You buy a investment plan by investing Rs. 6000/- per month for first 12years and Rs. 11000/- per month for next 12 years. If the rate of interest is 15% per annum compounded monthly . How much amount would you have after 24 years?
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 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)
Single men trade far more often than women. This is due to greater ________ among men.
Section C (4 Mark)
Zoya Ltd has the following Balance sheet for FY 2005-2006:
The Total Sales for the year was Rs. 6,00,000.
The company president believes the company carries excess inventory. Accordingly he wants the inventory turnover ratio to be 8x and would use the freed up cash to reduce current liabilities. If the company follows the president’s recommendation and sales remain the same, the new quick ratio would be:
Section B (2 Mark)
Rakhi purchased a piece of land on 25-4-1979 for Rs.80000. This land was sold by him on 23-12-2011 for Rs.1250000. The market value of the land as on 1-4-1981 was Rs.98000. Expenses on transfer were 1.5% of the sale price. Compute the capital gain for the assessment year 2012-13. [CII-12-13: 852,11-12: 785,10-11:711]
Section A (1 Mark)
Which one of the following definitions of hedge fund strategies is not correct?
