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CWM_LEVEL_2 exam torrent AAFM study guide
NEW QUESTION 329
Section A (1 Mark)
In a bull spread, the investor makes profits if market goes
- A. None of the above
- B. Up
- C. Down
- D. Sideways
Answer: B
NEW QUESTION 330
Section C (4 Mark)
Read the senario and answer to the question.
Jogen commuted his 40% of pension in April, 2008 with Rs. 2,15,000.What would be the taxable amount on commuted pension received by Jogen, if he would retire from a private organization?
- A. Rs. 35,833
- B. Rs. Nil
- C. Rs. 1,07,500
- D. Rs. 1,70,167
Answer: A
NEW QUESTION 331
Section C (4 Mark)
An investor purchased on margin Alpha Computer for Rs. 30/- a share. The stock's price subsequently rose to Rs. 50/- a share at which time the investor sold the stock. If the margin requirement is 60 percent and the interest rate on borrowed funds was 7 percent, what would be the percentage earned on the investor's funds (excluding commissions)? What would have been the return if the investor had not bought the stock on margin?
- A. 108.47%, 52.36%
- B. 95.26%, 47.27%
- C. 106.44%, 66.7%
- D. 102.23%, 57.39%
Answer: C
NEW QUESTION 332
Section B (2 Mark)
You purchased one XYZ March 50 call and sold one XYZ March 55 call. Your strategy is known as
- A. A long straddle.
- B. A horizontal spread.
- C. A short straddle.
- D. A vertical spread.
Answer: D
NEW QUESTION 333
Section A (1 Mark)
______________ is a manifestation of mental accounting that can cause people to take on more risk as their wealth increases.
- A. None of the Above
- B. Base Rate Neglect Effect
- C. House Money Effect
- D. Sample Size Neglect Effect
Answer: C
NEW QUESTION 334
Section B (2 Mark)
In 2011-12, Steven has business profits of £34,125, net bank interest of £1,240 and net dividends of £9,000.
He claims the personal allowance of £7,475. What is the income tax payable for the year after subtracting tax deducted at source?
- A. £6,050
- B. £7,360
- C. £6,290
- D. £8,280
Answer: A
NEW QUESTION 335
Section A (1 Mark)
As per Hindu succession Act
- A. Both of the above are correct
- B. None of the above are correct
- C. Cognate heirs are preferred over agnate heirs
- D. Full blood relations are preferred over half blood relations
Answer: D
NEW QUESTION 336
Section B (2 Mark)
Rahul decides to deposit Rs. 5,000/- every month into an account yielding 12 % per annum compounded monthly for 20 years. What will be the accumulated value in this account after 20 years and how much amount can be withdrawn from this account every month for a further period of 20 years of ROI is 8 % per annum compounded monthly?
- A. 0
- B. 41384.95
- C. 1
- D. 40230.85
Answer: B
NEW QUESTION 337
Section B (2 Mark)
Payback period is
- A. None of the above
- B. Time required for cash flows to recover the cost of investment
- C. Time required to recover the operating cost
- D. Time required for cash flows to recover cost of investment and opportunity cost
Answer: B
NEW QUESTION 338
Section B (2 Mark)
An employee joined in the year 2000 in a sugar mill. After working all the years as a seasonal employee up to the year 2011. He retires with the following monthly salary
How much gratuity is payable to him?
- A. Rs 9692
- B. Rs 8885
- C. Rs 20769
- D. Rs 11308
Answer: B
NEW QUESTION 339
Section A (1 Mark)
Which of the following could be classified as an emotional bias?
- A. The investor only partially adjusts forecasts when he receives new information.
- B. None of these
- C. The investor has a tendency to value the same assets higher if he owns them than if he does not own them.
- D. The investor has the difficulty in interpreting complex new information
Answer: C
NEW QUESTION 340
Section A (1 Mark)
A(n) _____________ is related to the credit option and is usually aimed at lenders able to handle comparatively limited declines in value but wants insurance against serious losses.
- A. credit linked note
- B. standby letter of credit
- C. credit risk option
- D. credit swap
Answer: D
NEW QUESTION 341
Section A (1 Mark)
A forward contract differs from a futures contract in that:
- A. A forward contract is non-binding.
- B. A forward contract does not specify the selling price.
- C. A forward contract is for a shorter period of time.
- D. A forward contract does specify the selling price.
Answer: A
NEW QUESTION 342
Section A (1 Mark)
The following is not a capital receipt
- A. Bonus Shares
- B. Dividend on investment
- C. Compensation received for vacating business place
- D. Sale of know-how
Answer: B
NEW QUESTION 343
Section A (1 Mark)
Which of the following is an investment analysis approach to determine real estate values?
- A. The income approach
- B. The comparative sales approach
- C. The net present value approach
- D. The cost approach
Answer: C
NEW QUESTION 344
Section A (1 Mark)
The risk that occurs when the index used for determination of interest earned on the CDO trust collateral is different from the index used to calculate the interest to be paid on the CDO trust is known as______________.
- A. Yield Curve Risk
- B. Basis Risk
- C. Spread Risk
- D. Default Risk
Answer: B
NEW QUESTION 345
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.
- A. Rs. -28,970
- B. Rs. -32,470
- C. Rs. 108000
- D. Rs. 96,000
Answer: A
NEW QUESTION 346
Section B (2 Mark)
Under the Workmen Compensation Policy, when the employment injury results in death, the insurance company pays 40 % of the monthly wages of the deceased multiplied by the relevant factor or Rs. _________ whichever is more.
- A. Rs. 20,000/-
- B. Rs. 25,000/-
- C. Rs. 1,00,000/-
- D. Rs. 50,000/-
Answer: A
NEW QUESTION 347
Section A (1 Mark)
You buy a investment plan by investing Rs. 5000/- per month for first 12years if the investment pays Rs. 5000 for the next 12 years and the rate of interest is 15% per annum compounded monthly. How much amount would you have after 24 years?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
NEW QUESTION 348
Section C (4 Mark)
Mr. Rajesh constructs a Long Straddle Strategy with one Nifty Call Option having a Strike price of Rs. 4500 available at a premium of Rs. 122 and one Nifty Put Option with a strike price Rs. 4500 at a premium of Rs.
85
What would be the Net Payoff of the Strategy?
* If Nifty closes at 4234
* If Nifty closes at 4766
- A. 93 and 193
- B. 59 and 59
- C. -107 and -207
- D. 0 and -7
Answer: B
NEW QUESTION 349
Section C (4 Mark)
The current dividend on an equity share of Bharat Limited is Rs.8.00 on earnings per share of Rs. 30.00.
Assume that the dividend per share will grow at the rate of 20 percent per year for the next 5 years. Thereafter, the growth rate is expected to fall and stabilize at 12 percent. Investors require a return of 15 percent from Bharat's equity shares. What is the intrinsic value of Bharat's equity share?
- A. Rs. 478.45
- B. Rs. 476.79
- C. Rs. 415.02
- D. Rs. 439.06
Answer: C
NEW QUESTION 350
Section B (2 Mark)
Mr. Murti is working in a reputed company and earning Rs. 4,00,000/- p.a. and is now 50 years old. He has invested Rs. 1,50,000/- in an annuity which will pay him after 5 years a certain amount p.m. at the beginning of every month for 10 years. Rate of interest is 8% p.a. Calculate how much he will receive at the beginning of every month after 5 years?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: D
NEW QUESTION 351
Section C (4 Mark)
Read the senario and answer to the question.
Assume Neeraj bought a second hand car in June 2007. Since the insurance premium was due, Neeraj paid it in the old owner's name.Neeraj didn't receive the original policy despite repeated requests. The car later met with an accident causing damages worth Rs. 10000. Neeraj had not transferred the car in his name, as Neeraj did not have the original documents. Can the insurer reject his claim?
- A. The insurance company is well within its right not accepting the claim from Neeraj
- B. The claim will be entertained after Neeraj convert the vehicle in his name
- C. Claim will be entertained only to the amount of the insurance premium paid.
- D. No, as Neeraj has paid the insurance premium
Answer: A
NEW QUESTION 352
Section A (1 Mark)
Correlate, combine, cognize and __________ are the four C's of CRM Process
- A. Customer
- B. Consumer
- C. Connect
- D. None of the given options
Answer: C
NEW QUESTION 353
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