Section A (1 Mark)
A cognitive heuristic in which decisions are made based on an initial 'anchor__________
Section A (1 Mark)
In The CAMPARI model of Credit evaluation ‘C’ stands for:
Section B (2 Mark)
Customer relationship management applications dealing with the analysis of customer data to provide information for improving business performance best describes by which of the following?
Section B (2 Mark)
Portfolio A has expected return of 10% and standard deviation of 19%. Portfolio B has expected return of 12% and standard deviation of 17%. Rational investors will
Section A (1 Mark)
_____________ is defined as fairness in spending in US.
Section B (2 Mark)
Narayan expects to receive Rs 25000 in net receipts each year for five year and to sell the property for Rs 350,000 at the end of the five-year period, if Narayan expects a 15% return, what would be the value of the property?
Section B (2 Mark)
Which of the following statements is/are correct with respect to Mental Accounting?
Section C (4 Mark)
Which of the following statements is/are correct?
Section A (1 Mark)
With regard to hedge funds, ‘2 and 20’ is best explained as:
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 B (2 Mark)
The expected returns and standard deviations of stock A and B are:
Manish buys Rs.20000 stock A and sells short Rs.10000 of stock B, using all the proceeds to buy more of stock A. The correlation between the two securities is 0.25. What are the expected return and the standard deviation of Manish’s portfolio?
Section A (1 Mark)
Why is the price/yield profile of a callable bond less convex than that of an otherwise identical option-free bond? The price:
Section A (1 Mark)
The minimum income criteria for Personal Loans in case of Salaried employees is:
Section A (1 Mark)
The profits of a controlled foreign company which are apportioned to a UK company are charged to corporation tax at the UK company's average rate of tax.
Section B (2 Mark)
Consider the multifactor model APT with two factors. Portfolio A has a beta of 0.75 on factor 1 and a beta of 1.25 on factor 2. The risk premiums on the factor 1 and factor 2 portfolios are 1% and 7%, respectively. The risk-free rate of return is 7%. The expected return on portfolio A is __________ if no arbitrage opportunities exist.
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 A (1 Mark)
Supporting customers through the process of selecting, purchasing, and maintaining a product or service is known as:
Section A (1 Mark)
Credit reports provided by credit bureaus provide lenders:
Section C (4 Mark)
Which of the following would you consider the best indicator of an undervalued firm?
Section B (2 Mark)
The risk-free return is 9 percent and the expected return on a market portfolio is 12 percent. If the required return on a stock is 14 percent, what is its beta?
Section C (4 Mark)
Read the senario and answer to the question.
For the purpose of World Tour Nimita has an option to use her investments in PPF A/c. She would contribute maximum permissible amount on the 1st working day of April every year till its due maturity as well as in all years of the extension of account for a 5-year term after its due maturity. She wants to use half of the PPF account proceeds for the proposed world tour. You estimate the adequacy of such amount, the same is _____________.
Section B (2 Mark)
Lucy purchased a rental house a few years ago for $100,000. Total depreciation to date is $35,000. In the current year, she sells the house for $155,000 and pays $10,000 selling expenses. Calculate Lucy's gain on the sale.
Section B (2 Mark)
From the following data in respect to the property price, calculate the value of the property for your client Mr. Nitin Sharma, as per the capitalization rate.
Section C (4 Mark)
Nifty is at 3200. Mr. XYZ expects large volatility in the Nifty irrespective of which direction the movement is, upwards or downwards. Mr. XYZ buys 2 ATM Nifty Call Options with a strike price of Rs. 3200 at a premium of Rs. 97.90 each, sells 1 ITM Nifty Call Option with a strike price of Rs. 3100 at a premium of Rs. 141.55 and sells 1 OTM Nifty Call Option with a strike price of Rs. 3300 at a premium of Rs. 64.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 2929
• If Nifty closes at 4325
Section B (2 Mark)
Consider the single factor APT. Portfolio A has a beta of 0.2 and an expected return of 13%. Portfolio B has a beta of 0.4 and an expected return of 15%. The risk-free rate of return is 10%. If you wanted to take advantage of an arbitrage opportunity, you should take a short position in portfolio _________ and a long position in portfolio _________.
Section B (2 Mark)
On 1st February 2009, Mr. Dutt took a personal loan of Rs. 1,00,000 for a period of 3 years at an 21% rate of interest .The loan is to be on monthly EMI on monthly reducing balance method.
What would be interest and principal amount to be paid in November 2011?
Section B (2 Mark)
If Second National Bank has more rate-sensitive liabilities then rate-sensitive assets, it can reduce interest rate risk with a swap that requires Second National to
Section A (1 Mark)
“Accumulation” is the age between ________
Section C (4 Mark)
As a CWM you are required to calculate the tax liability of an individual whose taxable income is:
• $42000 in SGD and he is a Singapore citizen
• £35500 p.a (only employment)and he is a UK citizen
Section C (4 Mark)
Read the senario and answer to the question.
Calculate the income from house property for Vinay. Municipal rental value 75000, Fair Rental value is 80000, Standard rent is 1,10,000. Municipal taxes paid for full house are Rs. 10,000 during the year. Interest paid by Vinay on borrowed money during the year is Rs. 101070.
Section B (2 Mark)
The ________________provides that where the total income of an enterprise is computed by the AO on the basis of the arm's length price as computed by him, the income of the other associated enterprise shall not be recomputed by reason of such determination of arm's length price in the case of the first mentioned enterprise, where the tax has been deducted or such tax was deductible, even if not actually deducted under the provision of chapter VIIB on the amount paid by the first enterprise to the other associate enterprise.
Section B (2 Mark)
The Elliot Wave Theory ____________.
Section A (1 Mark)
As per Hindu succession Act 1956 following person is not considered as a class I heir of the person who dies intestate
Section A (1 Mark)
………………………arises by operation of law eg trust created under MWP Act
Section A (1 Mark)
For calculating the benefit under Entertainment allowance, Salary means,
Section B (2 Mark)
Calculate the Information Ratio from the following data:
Section A (1 Mark)
Loans to individuals and families to finance the purchase of new homes are known as:
Section C (4 Mark)
Read the senario and answer to the question.
Calculate the tax liability of Mr. Neeraj for the A.Y.08–09 assuming that he has avail full deduction under section 80C
Section C (4 Mark)
Read the senario and answer to the question.
Assume the following additional facts:
The Shankers have purchased a homeowner’s policy (comprehensive) covering 100% of the replacement cost of their residence. This policy has a Rs. 500 deductible. Also, they have purchased a disability income policy with a 30-day elimination period and an any-occupation definition of disability.
What actions should the Shankers consider in order to improve the quality of the insurance program described above?
Section B (2 Mark)
Which one of the following statements is/are correct?
Section B (2 Mark)
What is the size of the final unequal payment of a loan for Rs15 600 and it has monthly payments of Rs500? The interest rate is 9.92% compounded quarterly.
Section C (4 Mark)
Read the senario and answer to the question.
Neeraj’s portfolio consist shares of company X Ltd. which is paying a dividend of Rs. 2 per share. The dividend is expected to grow @15% annual rate for 3 years, then @10% for the next 3 years, after which it is expected to grow @5% forever. What among the following would be your advice to Neeraj in case the market value of the share is Rs. 85? Assume capitalization rate to be 9% per annum
Section B (2 Mark)
An investor is bearish about ABC Ltd. and sells ten one-month ABC Ltd. futures contracts at Rs.5,00,000. On the last Thursday of the month, ABC Ltd. closes at Rs.510. He makes a _________. (assume one lot = 100)
Section C (4 Mark)
Read the senario and answer to the question.
Which one of the following statements most accurately describes the risk exposure of the Shankers’ portfolio?
Section A (1 Mark)
An American call option can be exercised
Section C (4 Mark)
Read the senario and answer to the question.
Approximately how much amount she must sacrifice to provide the income stream for her mother?
Section B (2 Mark)
Mrs. Sharma, a 40-year-old widow, has an 8-year-old son. Her current savings are not adequate to provide for her son’s post graduate studies, however she will be able to save for it by the time he finishes graduation i.e. when he is 20 years old. Mortality tables indicate that her life expectancy is another 30 years.
Which one of the following is true?
Section A (1 Mark)
Creation of an Estate Plan normally occurs during __________
Section A (1 Mark)
After buying two stocks, one rises by 25% an d the other drops by 25%. You congratulate yourself on your brilliance for the first stock and blame bad luck on the second. You are demonstrating which investor bias?
Section A (1 Mark)
The principle of _____________ ensures that an insured does not profit by insuring with multiple insurers
