Verified CWM_LEVEL_2 Dumps Q&As - CWM_LEVEL_2 Test Engine with Correct Answers
Pass Your CWM_LEVEL_2 Dumps as PDF Updated on 2022 With 1234 Questions
NEW QUESTION 10
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. Optimization
- B. Un Bound Rationality
- C. None of the above
- D. Bounded Rationality
Answer: D
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 11
Section B (2 Mark)
If one earns 10% on investment but inflation is 2%, real rate of return is
- A. 8%
- B. 10%
- C. 7.84%
- D. 7.70%
Answer: C
NEW QUESTION 12
Section A (1 Mark)
Financial Independence usually occurs between _______
- A. 55-70
- B. 40-55
- C. None of the above
- D. 70-85
Answer: A
NEW QUESTION 13
Section A (1 Mark)
In case of Credit Assessment, if the lender accepts the application and takes it forward towards acceptance provided it passes through the risk assessment criterion, then the Credit Score Band of the borrower would be:
- A. 501 to 700
- B. 501 to 600
- C. 750 and above
- D. 601 to 750
Answer: D
NEW QUESTION 14
Section C (4 Mark)
Data on following mutual funds given below:
Risk free return is 8%. Calculate Treynor measure.
- A. 2.95, 8.16, 5.31
- B. 4.45, 6.98, 5.33
- C. 6.72, 6.26, 6.31
- D. 6.09, 10.53, 5.93
Answer: D
NEW QUESTION 15
Section C (4 Mark)
Read the senario and answer to the question.
Sajan and Jennifer want to arrange for the funds to meet marriage expenses of their children. They plan the wedding of Mark after 23 years from now and that of Stephanie after 25 years from now. To accumulate the funds for marriage, you advise to start a monthly Systematic investment Plan (SIP) immediately in Equity scheme of a mutual fund. Such SIP will continue for the next 15 years. You further advise to hold the investment in equity shares till Stephanie's marriage to meet the wedding expenses. After meeting the expenses of Marks' marriage, the balance fund in the quity scheme are allowed to appreciate to meet the differential expenses of Stephanie's marriage. The amount of SIP comes to __________.
- A. Rs. 5,387
- B. Rs. 5,454
- C. Rs. 5756
- D. Rs. 5,495
Answer: A
NEW QUESTION 16
Section B (2 Mark)
Actual Loss ratio is
- A. (Actual Loss - Loss Adjustment Expenses)/ Number of exposure units
- B. (Actual Loss + Loss Adjustment Expenses)/ Number of exposure units
- C. (Actual Loss + Loss Adjustment Expenses)/ Earned Premium
- D. (Actual Loss - Loss Adjustment Expenses)/ Earned Premium
Answer: C
NEW QUESTION 17
Section B (2 Mark)
Mr. L Singh used machinery in his business. This is the only asset in the block. 20% of the usage is for personal purposes. The WDV of the block as on 31.3.2011 is -
- A. None of the above.
- B. Rs. 2,55,000
- C. Rs. 2,10,000
- D. Rs. 2,70,000
Answer: A
NEW QUESTION 18
Section A (1 Mark)
Fiscal termites are factors that threaten the integrity of tax systems, and most of which relate to the internationalization of tax. These are:
- A. I, II and IV
- B. I, II and III
- C. III and IV
- D. All of the above
Answer: B
NEW QUESTION 19
Section C (4 Mark)
Roger deposits Rs. 10,00,000 in a bank account on 1st March 2005 and another Rs. 5,00,000 on 1st March
2011. He wants to withdraw all of this money with interest on 1st March 2015. If the account pays ROI of
11% p.a. compounded quarterly what amount can he withdraw from this account?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
NEW QUESTION 20
Section A (1 Mark)
Growth stocks typically have high:
- A. All the above
- B. Low price-to-book value ratios
- C. High dividend yields
- D. Price-earnings ratios
Answer: D
NEW QUESTION 21
Section A (1 Mark)
Judgement rating is used in case of
- A. Fire Insurance
- B. Ocean Marine Insurance
- C. Life Insurance
- D. Health Insurance
Answer: B
NEW QUESTION 22
Section C (4 Mark)
A stock ABC Ltd. is trading at Rs. 450. Mr. XYZ is bullish on the stock. But does not want to invest Rs. 450.
He does a Long Combo. He sells a Put option with a strike price Rs. 400 at a premium of Rs. 1.00 and buys a Call Option with a strike price of Rs. 500 at a premium of Rs. 2.
What would be the Net Payoff of the Strategy?
* If ABC Ltd closes at 625
* If ABC Ltd closes at 328
- A. -114 and 95
- B. 124 and -73
- C. -144 and 105
- D. 320 and 270
Answer: B
NEW QUESTION 23
Section A (1 Mark)
In Working Capital Finance, what should be the minimum current ratio the borrower needs to ensure the compliance under the first method of lending.
- A. 1.33:1
- B. 1.50:1
- C. 1.17:1
- D. 1.25:1
Answer: C
NEW QUESTION 24
Section C (4 Mark)
Read the senario and answer to the question.
Which types(s) of investment(s), would be consistent with their retirement goal?
- A. (I) and (III) only
- B. (II) and (IV) only
- C. (I) only
- D. (I) and (IV) only
Answer: A
NEW QUESTION 25
Section C (4 Mark)
Read the senario and answer to the question.
Mr. Saxena is planning to visit USA for the very first time in his carrier to promote software of his company and is expected to stay long. He wants to plan his journey in such a manner so that he can get maximum tax benefits in the FY 2007-08 from the residential status point of view. What is the latest date when he can afford to leave India & earn status of an NRI to get maximum tax benefits in assessment year 2008-09?
- A. On 12-10-2007
- B. On 01-10-2007
- C. On 28-09-2007
- D. On 22-09-2007
Answer: C
NEW QUESTION 26
Section A (1 Mark)
Which one of the following statements is/are true?
- A. All of the above
- B. Agricultural land is exempt from wealth tax.
- C. Real Estate investment is illiquid.
- D. Agricultural land is exempt from capital gain tax but however subject to land revenue.
Answer: A
NEW QUESTION 27
Section C (4 Mark)
Read the senario and answer to the question.
Portfolio A had a return of 12% in the previous year, while the market had an average return of 10%. The standard deviation of the portfolio was calculated to be 20%, while the standard deviation of the market was
15% over the same time period. If the correlation between the portfolio and the market is 0.8, what is the Beta of the portfolio A?
- A. 1.31
- B. 0.94
- C. 1.07
- D. 1.91
Answer: C
NEW QUESTION 28
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. Basis Risk
- B. Spread Risk
- C. Yield Curve Risk
- D. Default Risk
Answer: A
NEW QUESTION 29
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?
- A. 14329.34
- B. 16543.45
- C. 13,078.40
- D. 18230.34
Answer: C
NEW QUESTION 30
Section A (1 Mark)
Which of the following statement is correct?
- A. While applying for life insurance, it becomes your duty to disclose your past illnesses to the insurer, according principle of insurable interest
- B. While applying for life insurance, it becomes your duty to disclose your past illnesses to the insurer, according principle of utmost good faith
- C. While applying for life insurance, it becomes your duty to disclose your past illnesses to the insurer, according principle of subrogation
- D. The doctrine of adhesion states that you can bargain or ask insurer to change the terms of the insurance contract as per your needs.
Answer: B
NEW QUESTION 31
Section A (1 Mark)
The concept of designing marketing communication programs that coordinate all promotional activities to provide a consistent message across all audiences is called
- A. The marketing mix
- B. Relationship marketing
- C. Direct marketing
- D. Integrated marketing communication
Answer: D
NEW QUESTION 32
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. Representative bias
- B. Framing bias
- C. Availability bias
- D. loss aversion and anchoring and adjustment
Answer: D
NEW QUESTION 33
Section C (4 Mark)
Mr. XYZ is bearish about Nifty and expects it to fall. He sells a Call option with a strike price of Rs. 2600 at a premium of Rs. 154, when the current Nifty is at 2694. If the Nifty stays at 2600 or below, the Call option will not be exercised by the buyer of the Call and Mr. XYZ can retain the entire premium of Rs.154.
What would be the Net Payoff of the Strategy?
* If Nifty closes at 2900
* If Nifty closes at 2400
- A. -146 and -46
- B. -46 and 4
- C. -146 and 154
- D. 202 and 154
Answer: C
NEW QUESTION 34
Section B (2 Mark)
Behavioral finance argues that ____________.
- A. A and B
- B. the failure to uncover successful trading rules or traders cannot be taken as proof of market efficiency
- C. even if security prices are wrong it may be difficult to exploit them
- D. investors are rational
Answer: A
NEW QUESTION 35
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