[Nov-2021] Download Real AAFM CWM_LEVEL_2 Exam Dumps Test Engine Exam Questions
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NEW QUESTION 117
Section A (1 Mark)
Which of the following is NOT one of the phases of the life-cycle theory of asset allocation?
- A. Accumulation phase
- B. Consolidation phase
- C. Taxation phase
- D. Gifting phase
Answer: C
NEW QUESTION 118
Section B (2 Mark)
An appraiser estimates that a property will produce NOI of Rs 25,000, the Yo is 11 percent, and the growth rate is 2.0 percent. What is the total property value (unrounded)?
- A. Rs 2,50,154.
- B. Rs 2,77,778.
- C. Rs 2,35,478.
- D. Rs 2,30,458.
Answer: B
NEW QUESTION 119
Section C (4 Mark)
Mr. Dinesh constructs a BULL Call Spread Strategy with one Nifty Call Option having a Strike price of Rs.
4100 available at a premium of Rs. 170.45 and another Nifty Call option with a strike price Rs. 4400 at a premium of Rs. 35.40.
The Net Payoff of BULL Call Spread Strategy
* If Nifty closes at 4300
* If Nifty closes at 3700
- A. 72.05 and -125.05
- B. -65.05 and 0
- C. -115.05 and 84.95
- D. 64.95 and -135.05
Answer: D
NEW QUESTION 120
Section B (2 Mark)
The feature of the APT that offers the greatest potential advantage over the CAPM is the ______________.
- A. superior measurement of the risk-free rate of return over historical time periods
- B. use of several factors instead of a single market index to explain the risk-return relationship
- C. variability of coefficients of sensitivity to the APT factors for a given asset over time
- D. identification of anticipated changes in production, inflation and term structure as key factors in explaining the risk-return relationship
Answer: B
NEW QUESTION 121
Section A (1 Mark)
The organizations make their special offer to the customers who will provide the highest profit margins, greatest response rate and __________.
- A. Greatest cost
- B. Lowest revenue
- C. None of the given options
- D. Lowest cost
Answer: D
NEW QUESTION 122
Section A (1 Mark)
Select the CORRECT statement regarding basis risk associated with futures.
- A. A hedge will reduce risk as long as basis fluctuations are positive.
- B. Basis risk can be completely eliminated.
- C. The basis must be zero on the maturity date of the contract.
- D. Although the basis fluctuates over time, it can be precisely predicted.
Answer: C
NEW QUESTION 123
Section A (1 Mark)
Teena Dutta wants to buy a used car and wants a loan that she will pay off over the next three years with monthly payments. What type of loan does Teena want?
- A. No installment loan
- B. Revolving line of credit
- C. Residential mortgage loan
- D. Installment loan
Answer: D
NEW QUESTION 124
Section B (2 Mark)
Which of the following Statements are correct?
- A. All of the above
- B. I, II and III
- C. II, III and IV
- D. I and IV
Answer: B
NEW QUESTION 125
Section B (2 Mark)
Withholding Tax Rates for payments made to Non-Residents are determined by the Finance Act passed by the Parliament for various years. The current rates for Dividends are:
- A. 0
- B. 1
- C. 2
- D. 3
Answer: C
NEW QUESTION 126
Section A (1 Mark)
In reality, when risk and uncertainty or incomplete information about an alternative or high degree of complexity is introduced, people or organizations may be have somewhat different from rationality. This is called ___________.
- A. None of the above
- B. Bounded Rationality
- C. Optimization
- D. Un Bound Rationality
Answer: B
Explanation:
Section C (4 Mark)
Two friends Neeraj and Kapil, both belonging to the 33.66% tax bracket, have invested Rs. 10 lakhs in a debt-based scheme. The scheme is a regular run of the mill, assembly line product - nothing extraordinary about it.
The scheme has earned a distributable profit of 12%.
Kapil's financial condition is not good and due to the business losses his assets are to be auctioned.
Neeraj is working in MNC and getting an annual package of Rs. 18 lakhs. This includes Rs. 270000 as dearness allowance (2/3 forms the part of retirement benefit). He is also earning an agricultural income of Rs.
54000.His expenses are Rs. 80000 per month.
Neeraj has also taken a housing loan in joint name of his wife Anita and himself. Property is also in the joint name and their contribution is equal. Annual outflow towards housing loan in terms of repayment of principal and interest is Rs. 300000. Out of this Rs. 198800 is toward interest.
Neeraj has also invested an equal amount in a portfolio consisting of securities A and B.
Standard deviation of A is 12.43%; Standard deviation of B is 16.54%; Correlation coefficient is 0.82 Assets held by Neeraj
NEW QUESTION 127
Section A (1 Mark)
____________refers to the tendency of people to think of currency in nominal, rather than real terms
- A. Escalation of Commitment
- B. Mental accounting
- C. Money Illusion
- D. Hindsight bias
Answer: C
NEW QUESTION 128
Section C (4 Mark)
The required rate of return on an investment is 12%, you estimate that a firm X's dividend will grow as follows:
For the subsequent years you expect the dividend to grow at the more modest rate of 7% annually. What is the maximum price that you should pay for this stock?
- A. Rs. 68.86
- B. Rs. 67.25
- C. Rs. 67.83
- D. Rs. 65.45
Answer: A
NEW QUESTION 129
Section A (1 Mark)
Ideally, clients would like to invest with the portfolio manager who has
- A. The highest record of realized returns.
- B. A low personal risk-aversion coefficient.
- C. A moderate personal risk-aversion coefficient.
- D. The highest Sharpe measure.
Answer: D
NEW QUESTION 130
Section A (1 Mark)
Following is/ are the component(s) of Personal Financial Statements
- A. Income Statement
- B. Cash Flow Statement
- C. All of the above
- D. Balance Sheet
Answer: C
NEW QUESTION 131
Section C (4 Mark)
Assume the following;
With this agreement, every 6 months, the transfer of funds takes place between fixed rate payer and floating rate payer.
What would Net Cash flows after 6-months from the initiation date?
- A. $15,00,000 from Fixed-Rate to Floating-Rate Payer
- B. $10,50,000 from Floating Rate Payer to Fixed Rate Payer
- C. $12,50,000 from Fixed-Rate to Floating-Rate Payer
- D. $14,50,000 from Floating Rate Payer to Fixed Rate Payer
Answer: C
NEW QUESTION 132
Section B (2 Mark)
An employee who is not resident in the UK will be liable to UK income tax:
- A. On employment income arising only from duties performed in the UK (on the receipts basis)
- B. On employment income arising from duties performed in the UK (on the receipts basis) and on employment income arising from duties performed overseas (on the remittance basis)
- C. On all employment income arising both from duties performed in the UK and from duties performed overseas (on the remittance basis)
- D. On all employment income arising both from duties performed in the UK and from duties performed overseas (on the receipts basis)
Answer: A
NEW QUESTION 133
Section C (4 Mark)
Yogesh Jain is a Chartered Accountant by profession and a very disciplined investor he has started investing from today in an account Rs. 1,00,000 every year (beginning of year) and plans to increase his contribution by
10% every year. If the ROI he gets is 15% per annum compounded half yearly calculate the corpus he would be able to accumulate in 25 years.
- A. 0
- B. 1
- C. 2
- D. 3
Answer: A
NEW QUESTION 134
Section C (4 Mark)
Read the senario and answer to the question.
Vinay wants to have 80% of the desired retirement corpus from his monthly savings from now itself. If he expects to earn 12% p.a. on these savings, how much amount should the couple save at the end of each month to achieve this target?
- A. None of the above
- B. Rs. 36548
- C. Rs. 17873
- D. Rs. 26422
Answer: C
NEW QUESTION 135
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
- A. £ 7100 and 5880 SGD
- B. £ 17750 and 2310 SGD
- C. £ 7100 and 2310 SGD
- D. £ 14200 and 3570 SGD
Answer: D
NEW QUESTION 136
Section B (2 Mark)
A January month Nifty Futures contract will expire on the last _____ of January
- A. Monday
- B. Wednesday
- C. Thursday
- D. Tuesday
Answer: C
NEW QUESTION 137
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