AAFM CWM_LEVEL_2 - Chartered Wealth Manager (CWM) Certification Level II Examination
Section A (1 Mark)
A bank is considering making a loan to Neelam Pandey. The bank is looking at her credit report from Equifax and also examining the reason Neelam has put on the loan application for needing the loan? What aspect of evaluating a consumer loan application is the bank looking at?
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 C (4 Mark)
An investor Mr. Dayal, executes a Long Strangle by buying a Rs. 4300 Nifty Put for a premium of Rs. 23 and a Rs 4700Nifty Call for Rs 43. The Nifty is at 4500
The Net Payoff of Long Strangle
• If Nifty closes at 4100
• If Nifty closes at 5300
Section B (2 Mark)
As per Double Taxation Avoidance Agreement, the Royalties in UK is charged at:
Section B (2 Mark)
Calculate the duration of a 10 year annual annuity that has a yield of 7%.
Section A (1 Mark)
The eligibility Criteria for Personal Loans Salaried Individuals for Maximum Age of Applicant at Loan Maturity in case of personal loan is:
Section A (1 Mark)
The premise of behavioral finance is that
Section B (2 Mark)
As per Double Taxation Avoidance Agreement, the Technical Fees in UK is charged at:
Section A (1 Mark)
_____________seek to explain people's preferences in relation to consumption and saving over the course of their life.
Section A (1 Mark)
Passive Preserver follows a ___________ Investment Style
Section A (1 Mark)
A ____________________ tax system takes the same percentage of each person's income, regardless of whether the income is high, medium, or low.
Section A (1 Mark)
Mr. Sharma invested Rs. 2,00,000 in an investment that gives Rs 40,000/- for the first 4 years, and Rs. 60,000/- for next 3 years. If the discount rate is 12 %, calculate the Present Value of these cash flows?
Section C (4 Mark)
Read the senario and answer to the question.
Mr. Bhaitia will continue to invest Rs. 10,000 in his PPF a/c at the beginning of each year till his retirement. Then calculate how much he has to save extra at the end of per month in a scheme to achieve his retirement corpus with a yield of 10%?
Section B (2 Mark)
If two customers choose exactly the same package of certain service, but customer A calls for help weekly and customer B calls only twice a year, which is most valuable customer?
Section B (2 Mark)
A constant proportion portfolio insurance (CPPI) policy calls for:
Section A (1 Mark)
In which of the following is the loss unlimited?
Section A (1 Mark)
Which of the following is true regarding the resistance level?
Section C (4 Mark)
Read the senario and answer to the question.
During identification of new business opportunities, one of Harish’s friends Shekhar has offered him a business proposal. In this proposal a partnership firm consisting of two partners, Harish and Shekhar, shall take the franchise of a company which is a reputed brand in the field of pathology lab in which their investment and profit sharing ratio shall be equal.
Franchise rights shall be valid for 5 years and the project requires an upfront investment of Rs. 25 lakh for required infrastructure. The franchisee agreement has an option that the company can take over the franchisee after 5 years by charging depreciation @15% p.a. on straight line basis.
The projected profits from the firm are as follows:
Harish wants to know what IRR he will earn on his investment from this project ? (Please ignore taxes and assuming no additional investment is made during this five year period)
Section A (1 Mark)
_________________ is the most important source of revenue for states in US.
Section B (2 Mark)
A Resident is defined as not Ordinarily Resident provided such individual has been: a non- resident in 9 out of 10 Financial Years preceding the current year or his stay in India totals to _________days or less in ___________financial years preceding the current year.
Section C (4 Mark)
Consider the multifactor APT. There are two independent economic factors, F1 and F2. The risk-free rate of return is 6%. The following information is available about two well-diversified portfolios:
Assuming no arbitrage opportunities exist, the risk premium on the factor F1 portfolio should be __________.
Section A (1 Mark)
How many types of power of attorney are there?
Section C (4 Mark)
Read the senario and answer to the question.
You advise Sajan to accumulate a retirement corpus at the age of 58 years to sustain 70% of pre-retirement household expenses till his lifetime, and thereafter 50% of pre-retirement expenses till Jennifer’s expected life (instead of Stephanie’s life). Such corpus shall generate an inflation linked monthly outflows, if invested in risk free instruments. He would accumulate at least Rs. 70 lakh for the corpus through his PPF A/C. by suitably investing in the scheme and extending the account till his retirement. For the balance amount of corpus, he wishes to start a monthly SIP immediately in his existing Balanced MF scheme. You calculate such amount to be _________.
Section B (2 Mark)
Encashment of leave during service tenure is
Section B (2 Mark)
A bank is concerned about excess volatility in its cash flows from some recent business loans it has made. Many of these loans have a fixed rate of interest and the bank's economics department has forecast a sharp increase in interest rates. The bank wants more stable cash flows. Which type of credit derivative contract would you most recommend for this situation?
Section B (2 Mark)
IFB Stock currently sells for Rs38. A one-year call option with strike price of Rs45 sells for Rs9, and the risk free interest rate is 4%. What is the price of a one-year put with strike price of Rs45?
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 ___________.
