Pass the AAFM Chartered Wealth Manager GLO_CWM_LVL_1 Questions and answers with CertsForce

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Questions # 1:

You are given the following set of data:

Historical Rate of Return

Question # 1

Determine the arithmetic average rates of return and standard deviation of returns of the NSE over the period given.

Options:

A.

14.25%, 23.75%


B.

12.10%, 22.62%


C.

15.63%, 27.63%


D.

16.74%, 29.74%


Questions # 2:

A maximum of _____% of the issue would be allotted to one single QIB

Options:

A.

10


B.

25


C.

50


D.

75


Questions # 3:

Mr. Bakshi has invested Rs. 25,000/- @ 5% p.a. in a bank deposit. After 5 years rate of interest changes 6% p.a. computed half yearly. After further period of 2 years rate again changes to 7% p.a. compounded quarterly. After further 2 years rate again changes to Rs. 8% pa compounded monthly. What will he get after 10 years from now ?

Options:

A.

Rs. 45,780/-


B.

Rs. 55,563/-


C.

Rs. 41,546/-


D.

Rs. 44,682/-


Questions # 4:

Rishi wants to purchase a car 5 years from now. His investments are presently worth Rs. 48,000/-. He puts them into an account today at a ROI of 10% per annum and he would be contributing Rs. 5,000/- from end of this month, every month for 5 years. What would be his accumulated savings in this account after end of 5 years?

Options:

A.

465456.12


B.

466160.18


C.

464152.92


D.

467645.78


Questions # 5:

You bought a stock for Rs. 20 and sold it for Rs. 59.72 after six years. What was the annual rate of return?

Options:

A.

18%


B.

16%


C.

21%


D.

20%


Questions # 6:

Indexed cost of acquisition is calculated by

A)

Question # 6

B)

Question # 6

C)

Question # 6

D)

Question # 6

Options:

A.

Option A


B.

Option B


C.

Option C


D.

Option D


Questions # 7:

Lokesh purchased a flat on 1-4-1996 for Rs. 10,00,000/-. He sells the same flat on 1-10-2006 for Rs. 25,00,000/-.As a CWM® calculate the Indexed Cost of Acquisition on which capital gain would be calculated. (The CII of year 1995-96 is 281, for year 1996-97 is 305, for year 2005-06 is 497 and for year 2006-07 is 519).

Options:

A.

17,01,639


B.

18,46,975


C.

17,68,683


D.

16,29,508


Questions # 8:

Choose the amount of final tax liability of R for the assessment year 2007-08:

Question # 8

Options:

A.

17100


B.

17442


C.

15700


D.

16014


Questions # 9:

Mukul purchased a flat on 1-4-1996 for Rs. 10,00,000/-. He sells the same flat on 1-10-2006 for Rs. 25,00,000/-. Please calculate the Indexed Cost of Acquisition on which capital gain would be calculated. (The CII of year 1995-96 is 281, for year 1996-97 is 305, for year 2005-06 is 497 and for year 2006-07 is 519).

Options:

A.

17,85,129


B.

17,26,175


C.

17,01,639


D.

17,45,508


Questions # 10:

Economists group commercial banks, savings and loan associations, credit unions, mutual funds, mutual savings banks, insurance companies, pension funds, and finance companies together under the heading financial intermediaries. Financial intermediaries

Options:

A.

act as middlemen, borrowing funds from those who have saved and lending these funds to others.


B.

play an important role in determining the quantity of money in the economy.


C.

help promote a more efficient and dynamic economy.


D.

do all of the above.


Questions # 11:

How much loan can be given from PPF account in the year 2006-07?

Options:

A.

25% of the PPF balance in the year 2004-05


B.

25% of the PPF balance in the year 2005-06


C.

25% of the opening balance as on 01-04-06


D.

None of the above


Questions # 12:

The returns on Stock A and Stock B have a correlation coefficient of –1. When the price of Stock A appreciates by 12%, how will Stock B’s price perform?

Options:

A.

Appreciate by 12%.


B.

Depreciate by 12%.


C.

Stay unchanged.


D.

Depreciate by 6.0%.


Questions # 13:

Mukesh a 35 years old man is a self employed businessman, engaged in the business of selling medical equipments and plans to retire from his business and hand it over to his children at age of 55, after which he wants to relax and enjoy his retired life. He is now earning around Rs. 4,00,000/- p.a. His life expectancy is another 15 years after retirement. After paying for his expenses he is able to save Rs. 85,000 /- p.a., and regularly invest it in a 6% p.a. investment plan.

Calculate what will be the Mukesh’s total accumulation at his retirement? And if he wants to spend 4,00,000/- per year at beginning and dies at the age of 70 and assuming that he leaves behind Rs. 1,00,000/- as estate, what will be the short-fall in corpus?

Options:

A.

Rs. 30,22,825/- &Rs. 2,98,763/- (Surplus)


B.

Rs. 31,26,775/- &Rs. 10,32,945/- (Deficit)


C.

Rs. 31,26,775/- &Rs. 6,63,823/- (Deficit)


D.

Rs. 30,22,825/- &Rs. 2,98,763/- (Surplus)


Questions # 14:

A weaker Rupee benefits _____ and hurts _____

Options:

A.

Indian businesses; Indian consumers.


B.

Indian businesses; foreign consumers.


C.

Indian consumers; Indian businesses.


D.

foreign businesses; Indian consumers.


Questions # 15:

Mr.Tiwari is the sole income earner in the family. Mrs. Tiwari is a homemaker. They are aged 40 and 36 respectively. Life expectancy for both of them is another 40 years. They have no children. Other information you have is:

Current investment portfolio Rs. 20 lakh, Estimated final expenses – Rs. 1 lakh, present annual expenses- Rs 4 lakhs (including 1 lakh MrTiwari’s personal expenses), Mr. Tiwari’s post tax income in hand is Rs 3.5 lakhs. Assume a post tax; and post inflation rate, the discounting factor is 4%. Calculate the insurance requirement under the Needs Based Method.

Options:

A.

16.60 lakhs


B.

18.60 lakhs


C.

19.60 lakhs


D.

43.00 lakhs


Questions # 16:

Ramesh has invested Rs. 70,000, 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?

Options:

A.

Rs. 13.87%


B.

Rs. 12.90%


C.

Rs. 13.40%


D.

Rs. 13.17%


Questions # 17:

From the following information:

Question # 17

The Surrender value is 43% of the paid up value and loan is available at 85% of surrender value.

Calculate paid up value, surrender value, and loan value

Options:

A.

Rs. 98,250/-, Rs. 43,825/-, Rs. 35,636/-


B.

Rs. 96,750/-, Rs. 46,925/-, Rs. 39,886/-


C.

Rs. 98,000/-, Rs. 42,140/-, Rs. 35,819/-


D.

Rs. 95,000/-, Rs. 40,850/-, Rs. 34,723/-


Questions # 18:

Encashment of leave during service tenure is

Options:

A.

Taxable


B.

Tax free


C.

Taxable only if more than the notified exemption


D.

Tax free up to 50% of the notified amount


Questions # 19:

When cash flows occur at the beginning of each period, it is called as ___________

Options:

A.

Annuity in arrear


B.

Annuity due


C.

Ordinary annuity


D.

None of the above


Questions # 20:

In straight line method

Options:

A.

Depreciation value per annum is constant over the useful life


B.

Depreciation value varies with the value of the asset every year


C.

Depreciation is at a fixed percentage of the value of the asset


D.

None of the above


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