Free AAFM CWM_LEVEL_2 Practice Exam with Questions & Answers | Set: 4

Section A (1 Mark)

When the sponsored entities creates CMOs they often use different _____________ which each promise a different coupon rate and which have different maturity and risk characteristics.

Section B (2 Mark)

Why do share prices usually drop when news about decline in a company’s earnings per share is reported?

Section B (2 Mark)

Which of the following Biases are exhibited by Active Accumulator?

Section C (4 Mark)

Which of the following application of Options Strategy is correct?

Section A (1 Mark)

Determine the status of X and Y who are the legal heirs of Z

Section A (1 Mark)

Which of the following income is not exempt under section 10-

Section B (2 Mark)

In 2011-12, an individual receives a net dividend of £648. The equivalent gross income is:

Section A (1 Mark)

Which one of the following has not caused the huge growth in hedge funds and private equity?

Section A (1 Mark)

Which of the following is NOT a dimension of service quality?

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 A (1 Mark)

If a married couple (or civil partners) receive joint income, the amount of that income will normally be divided equally between them for tax purposes. True or False?

Section B (2 Mark)

Conventional theories presume that investors ____________ and behavioral finance presumes that they ____________.

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 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 A (1 Mark)

The _______ is typically taken to be the risk-free rate.

Section A (1 Mark)

Which of the following is an effective strategy in times of falling interest rates?

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 A (1 Mark)

During “Building the foundation” life stage, we learn about _______

Section C (4 Mark)

Puspinder Singh Ahluwalia took a housing loan on 1st. of June 2009 (EMI in arrear) of Rs. 50 lacs at a ROI of 10.75% p.a. compounded monthly for 12 years. He wants to know the deduction in taxable income he can claim u/s 24 of the IT act for the FY 2011 -12

Section A (1 Mark)

Manav saves Rs. 20,000/- a year for 5 years and Rs. 30,000/- a year for 10 years thereafter. What will be the total amount in his account after 15 years, if ROI is 10 % per annum?

Section A (1 Mark)

A bank is considering making a loan to Ram Kapoor. Ram has a gross salary per month of Rs40500 but has take-home pay of Rs27500 per month. What aspect of evaluating a consumer loan application is this fact most concerned with?

Section A (1 Mark)

Which of the following statements is/are correct?

Section A (1 Mark)

Wealth Conservation is _____________

Section A (1 Mark)

Mansi deposits Rs. 50,000/- in a bank account which pays interest @ 10 % per annum. How much can be withdrawn at the beginning of each year for 5 years if first withdrawal is 6 years from now?

Section A (1 Mark)

Corrections are often followed by ________.

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)

____________compares the price charged for property or services transferred in a controlled transaction to the price charged for property or services transferred in a comparable uncontrolled transaction in comparable circumstances

Section A (1 Mark)

…………………. Is implied in favor of the party creating it

Section B (2 Mark)

Differences between hedge funds and mutual funds are that

Section A (1 Mark)

Which of the following statement is/are true?

Section B (2 Mark)

If a portfolio manager has a good ability to select undervalued securities but a poor ability to forecast overall market, the following makes sense for him:

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 A (1 Mark)

The income received by the approved superannuation fund on the investments made by the fund is

Section B (2 Mark)

What is the size of the final unequal payment of a loan that has 89.34 payments and the equal payment size is Rs215.64? The interest rate is 3% per compounding period.

Section B (2 Mark)

Total income for assessment year 2012-13 of an individual including long-term capital gain of Rs. 60,000/- is Rs. 1,80,000/-. The tax on total income shall be: [CII-12-13: 852,11-12: 785,10-11:711]

Section B (2 Mark)

Matrix Ltd has a current ratio of 1.6, and a quick ratio equal to 1.2. The company has Rs 20,00,000 in sales and its current liabilities are Rs 10, 00,000. What is the company’s inventory turnover ratio?

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 A (1 Mark)

Mr. Murli is 55 years old at present. He has invested some amount in an annuity which will pay him begining of the 5th year Rs. 30,000/- p.a. at the beginning of every year for 10 years. Rate of interest is 7% p.a. Calculate how much amount he has invested now?

Section A (1 Mark)

A relatively new type of credit derivative is a CDO which stands for ________________.

Section A (1 Mark)

A type of trust in which assets are passed down to the grantors grandchildren not the grantors children

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)

Mr. Amit Jain has bought a house today which cost him Rs. 50 lacs by taking a loan of 30lacs for 15 years at 11% per annum compounded monthly. He currently has 10 lacs of financial assets and plans to save Rs. 3.25 lacs every year at the beginning of the year for the next 5 years. All his investments are expected to grow at a ROI of 15%per annum compounded quarterly. What will be the net worth of Mr. Amit after 5 years if the value of the house after 5 years is expected to be 75 lacs.

Section B (2 Mark)

Manav wishes to have a retirement corpus of Rs. 2,50,000/- in 30 years’ time. Assuming that he can earn a ROI of 12 % per annum, what amount he should invest yearly into a fund to reach his goal?

Section B (2 Mark)

In regard to moving averages, it is considered to be a ____________ signal when market price breaks through the moving average from ____________.

Section A (1 Mark)

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

Section B (2 Mark)

Which of the following is true with regard to wealth planner’s liability?

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 B (2 Mark)

You are given the following set of data on security ABC:

Calculate the expected return on security ABC?

Section A (1 Mark)

Which of the following might be used as a factor in an APT factor model?

Section A (1 Mark)

_________________ is a method to evaluate a large volume of consumer loans quickly with minimum labor. This method is a statistical model which predicts whether the consumer will repay the loan or not.