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NEW QUESTION 130
Section C (4 Mark)
Company A is financed with 90 percent debt, whereas Company B, which has the same amount of total assets, is financed entirely with equity. Both companies have a marginal tax rate of 35 percent. Which of the following statements is most correct?
- A. If the two companies have the same basic earning power (BEP), Company B will have a higher return on assets.
- B. If the two companies have the same level of sales and basic earning power (BEP), Company B will have a lower profit margin.
- C. All of the answers above are correct.
- D. If the two companies have the same return on assets, Company B will have a higher return on equity.
Answer: A
NEW QUESTION 131
Section A (1 Mark)
During "Teen age years" life stage, typical asset allocation should be
- A. 50% equities, rest in fixed income instruments
- B. 75% equities, rest in fixed income instruments
- C. None of the above
- D. 25% equities, rest in fixed income instruments
Answer: C
NEW QUESTION 132
Section B (2 Mark)
A dealer sold one January Nifty futures contract for Rs.250,000 on 15th January. Each Nifty futures contract is for delivery of 50 Nifties. On 25th January, the index closed at 5100. How much profit/loss did he make ?
- A. Profit of Rs. 9000
- B. Loss of Rs. 8000
- C. Loss of Rs. 5000
- D. Loss of Rs. 9500
Answer: C
NEW QUESTION 133
Section A (1 Mark)
An investor will take as large a position as possible when an equilibrium price relationship is violated. This is an example of _________.
- A. The mean-variance efficiency frontier
- B. A dominance argument
- C. The capital asset pricing model
- D. A risk-free arbitrage
Answer: D
NEW QUESTION 134
Section B (2 Mark)
Mr Dixit is considering purchasing an office building for Rs. 2,500,000. He expects the potential gross income (PGI) in the first year to be Rs. 450,000; vacancy and collection losses to be 9 percent of PGI; and operating expenses to be 42 percent of effective gross income (EGI). What is the (effective) gross income multiplier?
- A. 6.8
- B. 6.45
- C. 6.3
- D. 6.1
Answer: D
NEW QUESTION 135
Section A (1 Mark)
Which of the following statements is/are correct with respect to naive diversification?
- A. Both of the above
- B. Only I
- C. Only II
- D. None of the Above
Answer: A
NEW QUESTION 136
Section A (1 Mark)
A "Family Office" segment client has investible assets worth of
- A. $75,000,000
- B. $100,000,000
- C. $50,000,000
- D. $20,000,000
Answer: B
NEW QUESTION 137
Section A (1 Mark)
Forecasting errors are potentially important because
- A. Research suggests that people underweight recent information.
- B. Research suggests that people correctly weight recent information.
- C. Either A or B depending on whether the information was good or bad.
- D. Research suggests that people overweight recent information.
Answer: D
NEW QUESTION 138
Section B (2 Mark)
Which of the following Biases are exhibited by Active Accumulator?
- A. I and III
- B. I, II and III
- C. III and IV
- D. All of the Above
Answer: B
NEW QUESTION 139
Section A (1 Mark)
With regard to hedge funds, '2 and 20' is best explained as:
- A. 2 per cent performance fee and $20m high-water mark
- B. 2 per cent commission and 20 month lock-up
- C. 2 year lock-up and 20 per cent commission
- D. 2 per cent annual fee and 20 per cent performance fee
Answer: D
NEW QUESTION 140
Section B (2 Mark)
Mahesh wants to sell a property for Rs. 30 lakhs. He is earning rent from tenant Rs. 3,60,000. He is spending following amounts annually on that property
Based on the above information what should be the value of the property would be:
- A. 3194570.43
- B. 3225714.29
- C. 4153210.21
- D. 3591765.19
Answer: B
NEW QUESTION 141
Section B (2 Mark)
___________, the net profit margin realized by the enterprise from an international transaction entered into with an associated enterprise is computed in relation to cost incurred or sales affected or assets employed or to be employed in the enterprise or having regard to any relevant base.
- A. Profit Split Method
- B. Transactional Net Margin Method
- C. All of the Above
- D. Cost-Plus Method
Answer: B
NEW QUESTION 142
Section B (2 Mark)
Narayan expects to receive Rs 25000 in net receipts each year for five year and to sell the property for Rs
350,000 at the end of the five-year period, if Narayan expects a 15% return, what would be the value of the property?
- A. Rs. 2,70,386
- B. Rs. 2,57,818
- C. Rs. 3,25,000
- D. Rs. 2,60,000
Answer: B
NEW QUESTION 143
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 144
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 145
Section B (2 Mark)
Vikash has following portfolio with related details given below:
Calculate the portfolio beta?
- A. 1.15
- B. 1.35
- C. 1.65
- D. 3.45
Answer: A
NEW QUESTION 146
Section C (4 Mark)
Read the senario and answer to the question.
Calculate the retirement corpus required by Raman to generate his post-retirement expenses.
- A. Rs. 74,36,638
- B. Rs. 64,97,596
- C. Rs. 63,27,856
- D. Rs.71,24,232
Answer: D
NEW QUESTION 147
Section B (2 Mark)
Accrued Interest on loan for self occupied property is Rs.110000 till 31 March 2010. Loan was taken for construction on 31/07/2006 and construction completed on 03/04/10. Interest for the year 2010-11 is Rs
22000. Determine what interest shall be allowed u/s 24(b) for AY 2011-12.
- A. 0
- B. 1
- C. 2
- D. 3
Answer: D
NEW QUESTION 148
Section A (1 Mark)
Wages for the purpose of gratuity payment as per the Act means
- A. Emoluments including all allowances, bonus and commission, etc
- B. Basic par and dearness allowance
- C. Basic Pay, Dearness Allowance and City compensatory allowance & house rent
- D. Basic Pay
Answer: B
NEW QUESTION 149
Section A (1 Mark)
Which of the Following needs to register as an' Investment Adviser' as per SEBI Investment Advisor Regulations 2013.
- A. Any person who for consideration is engaged in the business of providing "investment advice" to clients in India
- B. Any person who gives general advice on trends in the market and does not specify a particular security or investment.
- C. Any person providing Investment Advice to Clients exclusively outside India
- D. Any Insurance Agent who advises on Insurance Products and is registered by IRDA
Answer: A
NEW QUESTION 150
Section C (4 Mark)
Read the senario and answer to the question.
Mr. Mehta buys machinery for Rs. 80000 which is to be replaced after a period of two years. The replacement cost at that time will be Rs. 90000. As a Chartered Wealth Manager advice Mr. Mehta now what he should do after two year for the replacement of the said machinery?
- A. He should buy the new machinery first and sells the old machine in the next financial year
- B. He should buy and sell the machine in the financial year 2011
- C. He should sell new machinery first and buy the old machine in the next financial year
- D. He should buy and sell the machine in the same financial year
Answer: A
NEW QUESTION 151
Section C (4 Mark)
Suppose Nifty is at 4500 in May. An investor, Mr. A, executes a Short Strangle by selling a Rs. 4300 Nifty Put for a premium of Rs. 23 and a Rs. 4700 Nifty Call for Rs 43.
What would be the Net Payoff of the Strategy?
* If Nifty closes at 3735
* If Nifty closes at 5265
- A. -499 and -499
- B. C 499 and 501
- C. 501 and -499
- D. 499 and 154
Answer: A
NEW QUESTION 152
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