Latest [Jan 12, 2022] AAFM CWM_LEVEL_2 Exam Practice Test To Gain Brilliante Result
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NEW QUESTION 232
Section B (2 Mark)
Mrs. Dikshit is a single, sixty-five year old with a modest lifestyle and no income beyond what her investment portfolio of Rs1,00,00,000 generates. Her primary investment goal is to not outlive her assets; she does not, under any circumstances, want to lose money because she recalls that her relatives lost money in the crash of
2000. Mrs. Dikshit exhibits these behavioral biases:
- A. Availability bias
- B. loss aversion and anchoring and adjustment
- C. Representative bias
- D. Framing bias
Answer: B
NEW QUESTION 233
Section B (2 Mark)
Mr. Aggarwal is working in a reputed company and earning Rs. 4,50,000/- p.a. and is now 55 years old. He has invested Rs. 2,00,000/- in an annuity which will pay him after 5 years a certain amount p.a. at the beginning of every year for 10 years. Rate of interest is 8% p.a. Calculate how much he will receive at the beginning of every year after 5 years?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
NEW QUESTION 234
Section A (1 Mark)
Mr. Sharma is aged 50 years at present. He has invested some amount in an annuity which will pay him after
10 years Rs. 25,000/- p.a. at the beginning of every year for 10 years. Rate of interest is 6% p.a. Calculate how much amount he has invested now?
- A. 106543.34
- B. 108910.6
- C. 107981.1
- D. 107349.56
Answer: B
NEW QUESTION 235
Section B (2 Mark)
A perspective on decision making based on the assumption that people typically show risk aversion; hence, when making decisions they view whatever losses may be involved as more painful than equivalent gains are desirable. We have an irrational tendency to be less willing to gamble with profits than with losses.
- A. None of the Above
- B. Attribution Theory
- C. Utility Theory
- D. Prospect Theory
Answer: D
NEW QUESTION 236
Section B (2 Mark)
Which of the following statements with respect to US Taxation Structure is/are correct?
- A. I and II
- B. I, II and IV
- C. II, III and IV
- D. III and IV
Answer: B
NEW QUESTION 237
Section A (1 Mark)
A 15 year annuity due has a future value of Rs. 15,00,000/- If ROI is 9 % per annum, then how much will be each annuity amount ?
- A. 46870.02
- B. 35487.98
- C. 47897.12
- D. 56487.32
Answer: A
NEW QUESTION 238
Section C (4 Mark)
Suppose you have decided to sell your house and downsize by acquiring a townhouse that you have been eyeing for several years. You do not feel extreme urgency in selling your house; but the associated taxes are eating into your monthly cash flow, and you want to unload the property as soon as possible. Your real estate agent, whom you have known for many years, prices your home at Rs 90,00,000-you are shocked.
You paid Rs 250,000 for the home only 15 years ago, and the Rs 900,000 figure is almost too thrilling to believe. You place the house on the market and wait a few months, but you don't receive any nibbles. One day, your real estate agent calls, suggesting that the two of you meet right away. When he arrives, he tells you that Pharma Growth, a company that moved into town eight years ago in conjunction with its much-publicized initial public offering (IPO), has just declared bankruptcy.
Now, 7,500 people are out of work. Your agent has been in meetings all week with his colleagues, and together they estimate that local real estate prices have taken a hit of about 10 percent across the board. Your agent tells you that you must decide the price at which you want to list your home, based on this new information. You tell him that you will think it over and get back to him shortly.
Assume your house is at the mean in terms of quality and salability.
What is your likeliest course of action if you exhibit Anchoring and Adjustment bias?
- A. I, II and III
- B. I and II
- C. I and III
- D. III and IV
Answer: B
NEW QUESTION 239
Section A (1 Mark)
As per Hindu succession Act 1956 following person is not considered as a class I heir of the person who dies intestate
- A. Father
- B. Widow
- C. Son/Daughter
- D. Mother
Answer: A
Explanation:
Section C (4 Mark)
Mr. Saxena, age 45 years, is a software engineer and promoter of an Indian MNC. His family comprises his wife Anupama, age 43 years, who is a house wife, elder son Arup, 16 years (studying in 10th standard) and daughter Aarti, 14 years (studying in 8th standard). The family resides in their self owned residential house in Mumbai. Most of their life amenities such as cars, abroad vacations and full education cost of both kids are provided by Mr. Saxena's company, as he is the Managing Director of his company. The company is growing consistently and is on way to become a global legend in its field of operations. As such the future prospects of Mr. Saxena are generous and progressive.
Mr. Saxena is now planning to allocate his resources in the right fashion with your help as a Chartered Wealth Manager.
For this, he has disclosed his current personal financial details as follows:
Other details for FY 2007-08
1.Mr. Saxena has made investments worth Rs. 1.50 Lakh qualified U/S 80C.
2.He has donated Rs. 50,000 to Prime Ministers National Relief Fund.
3.He has transferred interest received by him on debentures to his wife's bank account the same date he received it.
4.Mr. Saxena's minor son, Arup, is a recognized child artist in children cinema and documentary films. Arup earned a sum of Rs. 1,50,000 from his assignments.
Mr. Saxena wants to resolve all estate bequeathing matters in his life time so that there should be no dispute after his death. For this purpose he has prepared a "Holograph Will".
Current estimates of economy are positive and interest rates are not likely to increase further in near future.
The family has a health cover provided by the company of Mr. Saxena. Also his house with all its contents is insured adequately.
NEW QUESTION 240
Section C (4 Mark)
Read the senario and answer to the question.
Raman is considering the purchase of a office building and, as part of his analysis, from the following given data calculate the appraised value of the property using the Income Approach?
- A. Rs. 19,15,500
- B. Rs. 19,50,000
- C. Rs. 19,25,750
- D. Rs. 18,75,500
Answer: B
NEW QUESTION 241
Section A (1 Mark)
Expenditure incurred by an employer on medical treatment and stay abroad of the employee shall not be taxed in the case of ___________.
- A. an employee whose income under the head "Salaries" exclusive of all monetary perquisites does not exceed Rs. 2 lakhs.
- B. all employees irrespective of their amount of gross total income/the amount of income under the head
"Salaries". - C. an employee whose income under the head "Salaries" exclusive of allnon-monetary perquisites does not exceed Rs. 2 lakhs.
- D. an employee whose gross total income before including the said expenditure does not exceed Rs. 2 lakhs.
Answer: D
NEW QUESTION 242
Section B (2 Mark)
What is the PV of an Annuity Due which provides Rs. 2,000/- per month for first 3 years and then Rs. 3,000/- per month for next 2 years. This annuity starts 4 years from now and ROI is 9 % per annum compounded monthly?
- A. 80704.76
- B. 81234.87
- C. 79453.34
- D. 66159.94
Answer: A
NEW QUESTION 243
Section A (1 Mark)
The Eligibility Criteria for Personal Loans for Self Employed Professionals & Businessman in India states that the minimum age of the applicant should be:
- A. None of the Above
- B. 0
- C. 1
- D. 2
Answer: D
NEW QUESTION 244
Section C (4 Mark)
Find out the effective quarterly rate for 18% per annum compounded half yearly.
- A. 4.44% per Quarter
- B. 4.50% per Quarter
- C. 4.403% per Quarter
- D. 9.00% per Quarter
Answer: C
NEW QUESTION 245
Section A (1 Mark)
Income of Rs. 300000 is received in Sri Lanka by a resident of India. But later on Rs. 50000 is remitted to India
- A. It will not be taxable
- B. Rs. 300000 will be taxable
- C. Rs. 50000 will be taxable
- D. Rs. 350000 will be taxable
Answer: B
NEW QUESTION 246
Section A (1 Mark)
An example of ________ is that a person may reject an investment when it is posed in terms of risk surrounding potential gains but may accept the same investment if it is posed in terms of risk surrounding potential losses.
- A. framing
- B. Regret avoidance
- C. Conservatism
- D. Overconfidence
Answer: A
NEW QUESTION 247
Section A (1 Mark)
At the time of renewal of working capital limits by a bank, the loan officer observed that M/s ABC's utilisation of funds on a long term basis is 80% of the long term sources during the year. Which among the following would be the result of this kind of financial management?
- A. The current ratio would decline
- B. The current ratio would improve
- C. The current liabilities would increase
- D. The current assets would decline
Answer: B
NEW QUESTION 248
Section A (1 Mark)
A bank that wants to protect itself from higher credit costs due to a decrease in its credit rating might purchase
_________________________.
- A. A credit swap
- B. A credit risk option
- C. A credit linked note
- D. A standby letter of credit
Answer: B
NEW QUESTION 249
Section A (1 Mark)
Your client Mr. Singhania expressed his intention to write his will in his own handwriting such a will which is wholly in the handwriting of the testator is renown as:
- A. Holograph will
- B. Nuncupative will
- C. Manuscript will
- D. Sham will
Answer: A
NEW QUESTION 250
Section B (2 Mark)
Which of the following is closest to the forward price of a share price if
Dividend expected is 6%?
- A. None of these
- B. Rs. 845
- C. Rs. 795
- D. Rs. 705
Answer: C
NEW QUESTION 251
Section B (2 Mark)
Consider the multifactor model APT with two factors. Portfolio A has a beta of 0.75 on factor 1 and a beta of
1.25 on factor 2. The risk premiums on the factor 1 and factor 2 portfolios are 1% and 7%, respectively. The risk-free rate of return is 7%. The expected return on portfolio A is __________ if no arbitrage opportunities exist.
- A. 23.00%
- B. 13.50%
- C. 16.50%
- D. 15.00%
Answer: C
NEW QUESTION 252
Section A (1 Mark)
Depending on how questions are asked, ___________ can cause investors to communicate responses to questions about risk tolerance that are either unduly conservative or unduly aggressive.
- A. Representativeness Bias
- B. Mental accounting
- C. Hindsight bias
- D. Framing Bias
Answer: D
NEW QUESTION 253
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