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AAFM GLO_CWM_LVL_1 Chartered Wealth Manager (CWM) Global Examination Exam Practice Test

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Total 1057 questions

Chartered Wealth Manager (CWM) Global Examination Questions and Answers

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Question 1

Initial issue expense in respect of the scheme should not exceed ______ of the funds raised during that scheme

Options:

A.

3%

B.

5%

C.

6%

D.

9%

Question 2

The basic principles of Islamic Finance are…..

Options:

A.

Interest, either for the borrower or the lender, is forbidden.

B.

The lender shares in the profits and the losses made by any enterprise it lends money to

C.

Excessive uncertainty, risk and speculation are forbidden

D.

All of the above

Question 3

A client has a minor child she is concerned about what might happen if she was to die while the child was still young and unable to sensibly handle a sizeable in heritance one solution could be to draft her will so that the child receives the asset once reaching age 21 this is an example of

Options:

A.

A discretionary trust

B.

A testamentary trust

C.

An inter vivo trust

D.

A family trust

Question 4

What is the minimum age required to avail the Benefits provided under the golden hand shake scheme?

Options:

A.

21 years

B.

45 years

C.

55 years

D.

40 years

Question 5

Which one of the following is/are correct?

Options:

A.

(i) & (ii)

B.

(i) & (iii)

C.

All statement is are correct

D.

All statements are incorrect

Question 6

Mr. Hitesh Shah has a portfolio with 23 different equities. The portfolio increased by 20% and has a beta of 1.50. Utilizing the Capital Asset Pricing Model, compute by what percent the market changed (round to nearest 0.5%) (Assume risk free rate of 5%)?

Options:

A.

14%

B.

15%

C.

16.50%

D.

17%

Question 7

Which of the following statement is/are correct?

Options:

A.

(i) only

B.

(ii) only

C.

Both (i) & (ii) are correct

D.

Both (i) & (ii) are incorrect

Question 8

Actual Loss ratio is

Options:

A.

(Actual Loss + Loss Adjustment Expenses)/ Earned Premium

B.

(Actual Loss - Loss Adjustment Expenses)/ Earned Premium

C.

(Actual Loss + Loss Adjustment Expenses)/ Number of exposure units

D.

(Actual Loss - Loss Adjustment Expenses)/ Number of exposure units

Question 9

Which of the following statements in reference to REPO Rate is/are correct?

Options:

A.

I, II and III

B.

I and II

C.

I, III and IV

D.

II,III and IV

Question 10

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.

Options:

A.

Rs. 50,000/-

B.

Rs. 20,000/-

C.

Rs. 25,000/-

D.

Rs. 1,00,000/-

Question 11

Suresh a 30 years old person has joined ABHG on 1/07/2006. His monthly salary (net salary) after deduction is payable Rs. 20500.His monthly expenses details are as follows:

Assume that Suresh has taken his flat on rent from 01/07/2006. On 01 /07/2006 he has cash in hand Rs. 2450. What will be his cash in hand on 31/03/2007.

Options:

A.

Rs. 72150/-

B.

Rs. 83150/

C.

Rs. 94070/-

D.

Rs. None of the above

Question 12

How much should one deposit today in a bank account paying interest compounded quarterly if you wish to have Rs. 10000 at the end of 3 months, if the bank pays 5% annually?

Options:

A.

9524

B.

9877

C.

9788

D.

9867

Question 13

International credit cards can be used by Indians for _________.

Options:

A.

International travel

B.

International magazines

C.

International software

D.

Any of the above

Question 14

Which of the following statement is true?

Options:

A.

Statement I is true.

B.

Statement II is true.

C.

Statement III is true.

D.

Statement III is wrong.

Question 15

Under a Personal Accident policy Mr. Ajay has taken, what percentage of sum assured he can get if he losses his one eye and one limb in an accident and under which type of benefit?

Options:

A.

100% in PTD

B.

50% in PPD

C.

100% in TTD

D.

50% in PPD

Question 16

Negative amortization leads to ______________

Options:

A.

A decrease in loan amount

B.

A bullet repayment

C.

Increase in the loan amount

D.

None of the above

Question 17

Mr. M by a Gift deed transferred certain property to her daughter, with a direction that daughter should pay an annuity to Mr. M's brother, as had been done by Mr. M. On the same day, the daughter executed a deed in writing in favour of Mr. M's brother, agreeing to pay annuity. Afterwards, she declined to fulfil her promise saying that no consideration had moved from her uncle. Which of the following statements is correct'?

Options:

A.

The daughter is bound to pay annuity.

B.

There is no valid consideration in this contract.

C.

M's brother is a third party to the contract and cannot suc.

D.

The daughter is not bound to pay annuity.

Question 18

Mr. Sahil has two daughters and is in receipt of education allowance of Rs 200pm for each of them. What would be the taxable allowance in the hands of Mr. Sahil for the full FY.

Options:

A.

NIL

B.

Rs 1200

C.

Rs 2400

D.

Rs 4800

Question 19

Expenses are 10% of the gross (office) premium. Pure premium is Rs. 200. Calculate office premium.

Options:

A.

222

B.

220

C.

182

D.

180

Question 20

Ram born in 1950 has a life expectancy at birth of 65 years. Sita his wife born in 1955 has a life expectancy at birth of 70 years. Assuming that the life expectancies have not changed. Ram is planning to buy an annuity to be paid to him or his wife till anyone of them is alive. Assuming Ram will retire on attaining age 58 i.e. in 2008, what should be the time period of the annuity?

Options:

A.

10 years

B.

12 years

C.

7 years

D.

17 years

Question 21

Calculate the premium for a policy of Rs. 10 lacs, if on an average out of 50000 persons aged 39,572 people die every year

Options:

A.

1144

B.

11440

C.

1100

D.

1330

Question 22

A project should be considered if the Profitability Index is

Options:

A.

Less than 1

B.

More than 1

C.

More than to 0.5

D.

None of the above

Question 23

Compulsory audit of account is required u/s 44AB of IT, if the total sales/ turnover exceed _______

Options:

A.

Rs. 10,00,000

B.

Rs. 40,00,000

C.

Rs 60,00,000

D.

Rs. 1,00,00,000

Question 24

Yash pays health insurance premiums for himself, his wife and his two children aged 13 and 8. Premiums for which of these individuals will qualify as deductible from Yash’s taxable income?

Options:

A.

Yash only

B.

Yash and his wife only

C.

Yash, his wife and his oldest child

D.

Yash, his wife and both his children

Question 25

Purpose of budget is ____________

Options:

A.

Spend money wisely

B.

Reach financial goals

C.

Prepare for financial emergencies

D.

All of the above

Question 26

The first Mutual fund to offer Sarahia complaint fund IS

Options:

A.

HDFC Mutual Fund

B.

Birla Sun life Mutual Fund

C.

Taurus Mutual Fund

D.

Kotak Mutual Fund

Question 27

You bought a stock for Rs. 28.29 that paid the following dividends

After the third year, you sold the stock for Rs. 35. What was the annual rate of return?

Options:

A.

14%

B.

13%

C.

12%

D.

11%

Question 28

A central bank sale of ________ to purchase ________ in the foreign exchange market results in an equal rise in its international reserves and the monetary base.

Options:

A.

foreign assets; domestic currency

B.

foreign assets; foreign currency

C.

domestic currency; domestic assets

D.

domestic currency; foreign assets

Question 29

The government regulates financial markets for three main reasons:

Options:

A.

to ensure soundness of the financial system, to improve control of monetary policy, and to increase the information available to investors.

B.

to improve control of monetary policy, to ensure that financial intermediaries earn a normal rate of return, and to increase the information available to investors.

C.

to ensure that financial intermediaries do not earn more than the normal rate of return, to ensure soundness of the financial system, and to improve control of monetary policy.

D.

to ensure soundness of financial intermediaries, to increase the information available to investors, and to prevent financial intermediaries from earning less than the normal rate of return.

Question 30

Which one of the following statements is/are correct?

Options:

A.

(i) only

B.

(ii) only

C.

Both are wrong

D.

None of the above

Question 31

Retiring early will ____________ the accumulation phase while ____________ the retirement phase

Options:

A.

Longer, shorter

B.

Shorter, longer

C.

Longer, longer

D.

Shorter, shorter

Question 32

Which of the following statements are correct?

Options:

A.

I,III and IV

B.

I,II and III

C.

II and III

D.

All statements are true

Question 33

(CII for 1992-1993=223 and CII for 2011-2012 =785)

Calculate the LTCG in both cases?

Options:

A.

12,00,000 and 1,43,946

B.

10,80,000 and 1,45,850

C.

11,00,000 and 10,80,000

D.

10,00,000 and 10,12,946

Question 34

Mr. Patel has analyzed a stock for a one-year holding period. The stock is currently quoting at Rs 80/- and is paying no dividends. There is a 50-50 chance that the stock may quote Rs 90 or Rs 110 by year-end. What is the expected return on the stock?

Options:

A.

20%

B.

22.50%

C.

25%

D.

30%

Question 35

Mr Ram aged 53 years has put in 21 years of service in a PSU opts for a voluntary retirement under the company scheme. He has 5 years and 3 months of service left and his last drawn salary is Rs 18,000. He received Rs 10,00,000 as compensation. What would be the taxable part of this receipt?

Options:

A.

Rs 5,00,000

B.

Rs 6,00,000

C.

Rs 1,34,000

D.

NIL

Question 36

Given the following data, which one of the options will be monthly premium installment?

Rebate for large sum assured

Upto Rs. 24,999/- No rebate

From Rs. 25,000/- to 49,999/- @ Re 1 per thousand SA

From Rs. 50,000 and above @ Rs. 2 per thousand SA

Options:

A.

Rs. 6,524/-

B.

Rs. 6,512/-

C.

Rs. 6,485/-

D.

Rs. 6,501/-

Question 37

Concept of final pay is a feature of

Options:

A.

Defined benefit plan

B.

Defined contribution plan

C.

Hybrid plan

D.

None of the above

Question 38

A money back policy for SA of Rs. 100000/-. Matured after 25 years. Survival benefits of 15% each has been paid at the end of 5th , 10th, 15th, and 20th years. Bonus has accrued at Rs. 965/- per Rs. 1000 SA. Interim bonus @ Rs. 25/- per thousand SA is payable. What is the maturity claim amount?

Options:

A.

139000

B.

136500

C.

99000

D.

96500

Question 39

When cash flows occur at the beginning of each period, it is called as ___________

Options:

A.

Annuity in arrear

B.

Annuity due

C.

Ordinary annuity

D.

None of the above

Question 40

The beta of stock of Akhil Computers Ltd., is 1.5 and is currently in equilibrium. The required return on the stock is 19% and the expected return on the market is 15%. Suddenly due to a change in economic conditions, the expected return on the market increases to 17%. Other things remaining the same what would be new required rate of return on the stock?

Options:

A.

17.50%

B.

20.00%

C.

22.00%

D.

25.00%

Question 41

Dharampal has let out his house property at monthly rate of Rs. 12000. He has paid Rs.3500 as annual municipal tax. He wants to know the Net Annual value of his house at Bhuj for AY 2011-12. The Municipal value of the house is Rs. 90,000, Fair rent Rs. 1,40,000, Standard rent Rs. 1,20,000. The house was vacant for one month during the previous year 2010-11 and the rent has not changed since then.

Options:

A.

Rs. 1,40,500

B.

Rs. 1,36,500

C.

Rs. 1,28,500

D.

Rs. 1,32,000

Question 42

Rahul and Priyanka went to a wealth manager. Both of them have just got married. Their funds are limited and their needs are many.

Some of their needs are:

Kindly suggest the order in which they should start providing for their above needs:

Options:

A.

B,D,A,C,E

B.

A,E,B,C,D

C.

B,A,D,E,C

D.

C,E,A,C,D

Question 43

Which of the following are investment intermediaries?

Options:

A.

Finance companies

B.

Mutual funds

C.

Pension funds

D.

Only (A) and (B) of the above

Question 44

Case: The returns of 2 shares are as follows

Calculate the covariance of returns.

Options:

A.

220.32

B.

–420.11

C.

162.08

D.

270.36

Question 45

Ramesh has invested Rs. 70,000, 30% of which is invested in Company A, which has an expected rate of return of 15%, and 70% of which is invested in Company B, with an expected return of 12%. What is the expected percentage rate of return?

Options:

A.

Rs. 13.87%

B.

Rs. 12.90%

C.

Rs. 13.40%

D.

Rs. 13.17%

Question 46

A Family consists of karta, his wife four sons and their wires and children and its income is Rs. 1000000 if by family arrangement income yield property is settled on karta his wife and sons & daughter in law than tax liability would be

Options:

A.

Nil

B.

100000

C.

Calculated as per income tax Act 1961

D.

None of the above

Question 47

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 Basic Salary 2000 / DA 1000/ HRA 500. How much gratuity is payable to him?

Options:

A.

Rs 11308

B.

Rs 9692

C.

Rs 8885

D.

Rs 20769

Question 48

Mahesh has invested Rs. 72,000/- @ 5% p.a. in a bank deposit. After 7 years ROI changes 5% p.a. computed half yearly. After further period of 3 years rate again changes to 6% p.a. compounded quarterly. What will he get after 15 years of commencement?

Options:

A.

Rs. 1,48,251/-

B.

Rs. 1,58,240/-

C.

Rs. 1,40,000/-

D.

Rs. 1,55,000/-

Question 49

As a CWM® you recommended Mr. Raj Malhotra to put his money in Asset A offering 15% annual return with a standard deviation of 10%, and balance funds in asset B offering a 9% annual return with a standard deviation of 8%. Assume the coefficient of correlation between the returns on assets A and B is 0.50. Calculate the expected return after 1 year and standard deviation of Mr. Raj Malhotra’s portfolio

Options:

A.

12.60% and 0.809%

B.

11.67% and 8.75%

C.

12.60% and 8.09%

D.

8.09% and 12.60%

Question 50

Which one of the following statements is/are correct?

Options:

A.

(i) only

B.

(ii) only

C.

Both are correct

D.

Both are incorrect

Question 51

Saptarshi acquired shares of G Ltd. on 15.12.98 for Rs. 5 lacs which were sold on 14.6.11 for Rs. 19 lacs.

Expenses on transfer of shares Rs. 40,000. He invests ` 8 lacs in the bonds of Rural Electrification. Corporation Ltd. on 16.10.2011. Compute capital gain for the assessment year 2012-13.

Options:

A.

Rs 7,41,766

B.

Nil

C.

Rs 11,18,234

D.

Rs 12,45,745

Question 52

Sunil submits you the following particulars:

Options:

A.

Sunil deposited a sum of Rs. 3, 50,000/- on 25-06-2010 in the capital gain scheme as he intends to buy an agricultural land later. Out of the sale proceeds of gold, he has invested Rs. 1, 60,000/- on the purchase of residential house property on 13-05-2010. The shares were sold through a recognized stock exchange.

Compute taxable gain for the Assessment Year 2012-13. [CII- 12-13: 852, 11-12: 785, 10-11:711, 83-84: 116]

B.

LTCG-23520/-,STCG:NIL

C.

LTCG-NIL,STCG:20000/-

D.

LTCG-12586/-,STCG:20000/-

E.

LTCG-5520/-,STCG:NIL

Question 53

What is the minimum number of persons who must subscribe to the memorandum of association?

Options:

A.

2 in case of public co and 7 in case of private.

B.

2 in case of private co and 7 in case of public ltd.

C.

1 in case of both private and public ltd.

D.

7 in case of both public ltd and in case of private.

Question 54

Economists group commercial banks, savings and loan associations, credit unions, mutual funds, mutual savings banks, insurance companies, pension funds, and finance companies together under the heading financial intermediaries. Financial intermediaries

Options:

A.

act as middlemen, borrowing funds from those who have saved and lending these funds to others.

B.

play an important role in determining the quantity of money in the economy.

C.

help promote a more efficient and dynamic economy.

D.

do all of the above.

Question 55

A trust is created by a son, the Settlor, for the survival expenses of his retired parents each having equal beneficial interest. Both husband and wife have separate fixed pension of Rs.35,000 per month and Rs. 20,000 per month, respectively. The trust property has generated a net annual value of Rs. 5.12 lakh in the previous year 2012-13. The trustee as well as the Settlor is in the 30% tax bracket. Find the tax payable by the trustee as representative assessee.

Options:

A.

Rs. 79,100/-

B.

Rs. 33,370/-

C.

Rs. 1,58,210/-

D.

Rs. 70,860/-

Question 56

Choose the amount of final tax liability of R for the assessment year 2007-08:

Options:

A.

17100

B.

17442

C.

15700

D.

16014

Question 57

The coverage under a Product Liability policy includes:

Options:

A.

All of the above are true

B.

All of the above are false

C.

Only i and ii of the above are true

D.

Only i and iv of the above are true

Question 58

Which of the above statements is/are correct?

Options:

A.

(i) only

B.

(ii) only

C.

(i) and (ii) both are correct

D.

Both are incorrect

Question 59

Mr. Bharat sees a stock with a beta of 1.2 selling for Rs. 25 and price will move up to Rs. 31 by the end of the year. The risk free rate is 6% and the expected market return is 15 %. In this scenario Mr. Bharat would like to know whether the stock is _____________ and so should ___________.

Options:

A.

Overpriced, buy it.

B.

Overpriced, sell it.

C.

Under priced, buy it.

D.

Under priced, sell it.

Question 60

Once the child reaches the vesting age, i.e. the age when the life assurance commences, he or she can claim cash option i.e. he can opt to receive the premium amount paid so far under the policy in case the policy is discontinued. This is possible under:

Options:

A.

Childrens term-life assurance

B.

Childrens forward assurance

C.

Childrens Whole Life assurance

D.

Childrens deferred assurance

Question 61

The holding period return on a stock was 30%. Its ending price was Rs.26 and its cash dividend was Rs.1.50. Its beginning price must have been __________.

Options:

A.

Rs.20.00

B.

Rs.21.15

C.

Rs.86.67

D.

Rs. 91.67

Question 62

Rishi wants to purchase a car 5 years from now. His investments are presently worth Rs. 48,000/-. He puts them into an account today at a ROI of 10% per annum and he would be contributing Rs. 5,000/- from end of this month, every month for 5 years. What would be his accumulated savings in this account after end of 5 years?

Options:

A.

465456.12

B.

466160.18

C.

464152.92

D.

467645.78

Question 63

Which of the following is true with regard to wealth planner’s liability?

Options:

A.

A disclaimer removes all liability

B.

A principal advisor is responsible for actions of representative

C.

Advice is distinguishable from a recommendation

D.

An advisor may not be held liable for failure to predict economic changes

Question 64

Mr.Tiwari is the sole income earner in the family. Mrs. Tiwari is a homemaker. They are aged 40 and 36 respectively. Life expectancy for both of them is another 40 years. They have no children. Other information you have is:

Current investment portfolio Rs. 20 lakh, Estimated final expenses – Rs. 1 lakh, present annual expenses- Rs 4 lakhs (including 1 lakh MrTiwari’s personal expenses), Mr. Tiwari’s post tax income in hand is Rs 3.5 lakhs. Assume a post tax; and post inflation rate, the discounting factor is 4%. Calculate the insurance requirement under the Needs Based Method.

Options:

A.

16.60 lakhs

B.

18.60 lakhs

C.

19.60 lakhs

D.

43.00 lakhs

Question 65

Vishal is working with Amex Ltd since October 1, 1997. He is entitled to a basic salary of Rs. 6,000 pm.Dearness Allowance is 40% of Basic Salary for retirement benefits. He retired from his job on December 1,2010 (4 months before the end of F.Y 2010-11) and shifted to his village. He is entitled to the following benefits at the time of retirement. Gratuity = Rs. 98,000. Pension from December 1, 2008 = Rs. 2,000 per month. Payment from recognized PF = Rs. 3,00,000. Encashment of earned leave for 150 days = Rs. 36,000. He was entitled to 40 days leave for every completed year of service. He got 50% of his pension commuted in lump sum w.e.f March 1, 2011 and received Rs. 1,20,000 as commuted pension. Vishal contributes Rs. 900 per month to RPF to which his employer contributes an equal amount. What will be the amount of un-commuted pension for Vishal that will form part of his total income for the A.Y. 2011-12?

Options:

A.

NIL

B.

Rs 1000

C.

Rs 4000

D.

Rs 7000

Question 66

The probability distribution of the rate of return on ABC stock is given below:

What is the standard deviation of return?

Options:

A.

11.40%

B.

12.90%

C.

10.50%

D.

13.50%

Question 67

"During the PY 2009-10 a Poonawala Charitable Trust earned an income of Rs. 7 lakh out of which Rs.5 lakh was received during the PY 2009-10 and the balance Rs. 2 lakh was received during the PY 2011-2012.In order to claim full exemption of Rs. 7 lakh in the PY 2009-10:

Options:

A.

Rs 1.05 lakh and Rs 4.95 lakh

B.

Rs 70,000 and Rs 3.95 lakh

C.

Rs 1.05 lakh and Rs 3.95 lakh

D.

Rs 70,000 and Rs 4.30 lakh

Question 68

Asit an industrialist wants to buy a car presently costing Rs. 10,00,000/- after 5 years. The cost of the car is expected to increase by 10% pea for the first 3 years and by 6% in the remaining years. Asit wants to start a SIP with monthly contributions in HDFC Top 200 Mutual Fund. You as a CWM expect that the fund would give an average CAGR of 12% in the next 5 years. Please advise Asit the monthly SIP amount starting at the beginning of every month for the next 5 years to fulfill his goal of buying the Car he desires.

Options:

A.

1495512

B.

18614.48

C.

20614.48

D.

18311.71

Question 69

Case: Read the data given below & answer the following questions:

Market sensitive index will be:

Options:

A.

1.50%

B.

0.80%

C.

10

D.

1

Question 70

The following information regarding the equity shares of M/s V Ltd. is given

Calculate the EPS of M/s V Ltd. according to the traditional approach

Options:

A.

Rs. 22.50

B.

Rs. 26.00

C.

Rs. 30.00

D.

Rs. 27.00

Question 71

Compute Gross Total income and amount of loss allowed to be carried forward to next year:

Options:

A.

Rs. 34,000, Rs. 10,000/-

B.

Rs. 40,000/- Rs. 10,000

C.

Rs. 40,000/-, Nil

D.

Rs. 40,000/- Rs. 10,000

Question 72

If a scheme has 45 cr units issued and has a Face Value of Rs. 10 and NAV is at 11.13, unit capital (Rs. Cr) would be equal to

Options:

A.

500.85

B.

50.85

C.

950.85

D.

450

Question 73

A stock caries the following returns over a five year period:

Options:

A.

Calculate the following:

B.

Arithmetic mean return,

C.

Cumulative wealth index &

D.

Geometric mean return.

E.

11.5%, 1.4557, 18.61%

F.

11.2%, 1.5557, 10.25%

G.

11.2%, 1.3457, 10.51%

Question 74

The information about 3 stocks is provided below:

Assuming that the required rate of return on investment is 14%, what maximum price an investor should be willing to pay and Which Stock should he buy?

Options:

A.

Rs. 23.15/-, Rs. 47.50/-, Rs.70.45/- , Share C

B.

Rs. 15.29, Rs. 43.71, Rs. 63.64, None

C.

Rs. 15.29, Rs. 22.50, Rs. 49.50, Share B and C

D.

Rs. 16.36, Rs. 49.67, Rs. 69.75, Share B only

Question 75

Jaya is the owner of two residential houses. She sold one house on 23-12-2011 for Rs.12,50,000 which was purchased by her on 25-4-1979 for Rs.80,000. The market value of the land as on 1-4-1981 was Rs.98,000. Expenses on transfer were 1.5% of the sale price. The entire sale proceeds was utilized to construct the first and second floor on her second house which she completed by 15-3-2010. Compute the capital gain for the assessment year 2012-13. [CII-12-13: 852,11-12: 785, 10-11:711, 83-84: 116]

Options:

A.

562506

B.

461950

C.

570360

D.

NIL

Question 76

Michael estimates opportunity cost of investment to be 10.5% compounded annually. Which of the following is the best proposal?

Options:

A.

Receive Rs. 5,500/- at beginning of each year for 15 years

B.

Receive Rs. 5,500/- at the end of each year for 19 years

C.

Receive Rs. 45,000/- today

D.

Receive Rs. 1,20,000/- at the end of 10 years

Question 77

Calculate the total return on the mutual fund investment with the below mentioned information:

Options:

A.

24.52%

B.

22.47%

C.

23.52%

D.

23.75%

Question 78

Which of the following are the rights of the beneficiaries?

Options:

A.

(i) & (ii)

B.

(ii) & (iii)

C.

(i) & (iii)

D.

All of the above

Question 79

Azhar aged 30 is a disciplined investor. He has started depositing Rs. 25,000 every year in an account that pays a return of 9% every year. He plans to increase his contribution by Rs. 5000 every year till his age 50. Calculate the amount he would be having in his account at this age.?

Options:

A.

1731111

B.

1279000

C.

30101111

D.

29101111

Question 80

Akash owns a piece of land situated in Kolkata ( Date of acquisition : March 1, 1983, Cost of acquisition Rs. 20,000/- value adopted by Stamp duty authority at the time of purchase Rs. 45,000/-) On March 30, 2012 the piece of land is transferred for 4 lakh. Find out the capital gains chargeable to tax if the value adopted by the Stamp duty authority is 5.75 lakh. And X files an appeal under the Stamp Act and Stamp duty valuation has been reduced to Rs. 4.90 lakh by the Kolkata High Cout. [CII-12-13: 852,11-12: 785,10-11:711]

Options:

A.

Rs. 4,05,963/-

B.

Rs. 3,45,963/-

C.

Rs. 3,80,963/-

D.

Rs. 4,15,963/-

Question 81

Consider two stocks, A and B

The returns on the stocks are perfectly negatively correlated.

What is the expected return of a portfolio comprising of stocks A and B when the portfolio is constructed to drive the standard deviation of portfolio return to zero?

Options:

A.

22.24

B.

20.48

C.

19.57

D.

24.62

Question 82

Mr. Munjal has got her daughters son admitted to a dental college today, where he has to pay a fee of Rs. 1.5 Lac today i.e. at the time of admission. Then Rs. 1.75 lacs after 1 year, Rs. 2.5 lacs after 2 years and Rs. 3.25 lacs after 3 years. He wants to set aside the amount required today itself in the form of a Bank FDR.So how much he needs to put aside today if ROI is 8% for 1 year, 8.5% for 2 years and 9% for 3 years, all compounded Quarterly?

Options:

A.

Rs. 7,71,807.05

B.

Rs. 7,81,911.05

C.

Rs. 8,93,541.07

D.

Rs. 8,51,657.10

Question 83

The current dividend on an equity share of MAGADH Limited is Rs.8.00 on earnings per share of Rs. 30.00. Assume that the growth rate of 20 percent will decline linearly over a five year period and then stabilize at 12 percent. What is the intrinsic value of MAGADH ’s share if the investors’ required rate of return is 15 percent?

Options:

A.

Rs. 352/-

B.

Rs. 383/-

C.

Rs. 416/-

D.

Rs. 469/-

Question 84

Consider the following information:

Which of the following statements is/are true?

Options:

A.

Only II

B.

Only III

C.

Only II

D.

None of the above

Question 85

Your client, a businessman has a house worth Rs. 2.1 crore and a farm house worth Rs. 85 lakh. His business is worth Rs. 10 crore as per last balance sheet. He has two other partners in the business having stakes of 24% each. He has two cars purchased at Rs. 40 lakh and Rs. 20 lakh, the latter being in personal account. The cars have depreciated/market value at Rs. 30 lakh and Rs. 8 lakh, respectively. His joint Demat account, wife being primary holder, has stocks worth Rs. 1.65 crore. The business has taken Keyman‟s insurance on his life of value Rs. 1.5 crore. He has himself insured his life for an assured sum of Rs. 1.5 crore. You evaluate your client’s estate in case of any exigency with his life as _____.

Options:

A.

Rs. 8.20 crore

B.

Rs. 9.56 crore

C.

Rs. 10.51 crore

D.

Rs. 5.73 crore

Question 86

Ms. Sonali Briganza is 22 years old. She is currently earning a salary of Rs.5,00,000/- per annum and saves 20% of her salary every year. If her salary increases by 10% every year and she is able to get a return of 11% p.a. compounded annually throughout her investment horizon what would be the corpus of funds available at her age 58.?

Options:

A.

119056000

B.

117056000

C.

129056000

D.

139056000

Question 87

Dinesh took a housing loan of Rs. 25,00,000/- for 15 years in 2010 at a ROI of 11.75% per annum compounded monthly. Calculate the total interest and principle paid by him in the 2014 and 2016.

A)

B)

C)

D)

Options:

A.

Option A

B.

Option B

C.

Option C

D.

Option D

Question 88

Puspinder Singh Ahluwalia took a housing loan on 1st. of June 2009 (EMI in arrear) of Rs. 50 lacs at a ROI of 10.75% p.a. compounded monthly for 12 years. He wants to know the deduction in taxable income he can claim u/s 24 of the IT act for the FY 2011 -12

Options:

A.

480178

B.

150000

C.

330178

D.

125000

Question 89

The list of managing body needs for be fixed with Registrar of Joint Stock companies

Options:

A.

Only (i)

B.

Only (ii)

C.

(i) & (iii)

D.

Only (iv)

Question 90

From the following data on mutual funds, Calculate the Sharpe Ratio.

Risk free return is 8%.

Options:

A.

0.78,1.08,0.55

B.

0.78,1.05,0.59

C.

0.98,1.33,0.75

D.

0.71,1.11,0.55

Question 91

Rs. 1.50 lakh settled on a trust for the benefit of Akash and Bina for life. They share the income in proportion of 3:2.Their ages on valuation date are 20 years and 16 years. The average annual income for the last three years on the valuation date is Rs. 15,000/-. Find out the value of life interest of Akash and Bina if the value of life interest of Re 1/- at the age of 20 years is 12.273 and at the age of 16 years is 12.534.

Options:

A.

Akash Rs. 1,10,457/- Bina Rs. 75,204/-

B.

Akash Rs. 89,241/- Bina Rs. 60,759/-

C.

Akash Rs. 1,10,457/- Bina Rs. 60,759/-

D.

Akash Rs. 60,759/- Bina Rs. 75,204/-

Question 92

Which of the following statements is/are correct?

Options:

A.

Only (i)

B.

Only (i) & (ii)

C.

Only (i) & (iii)

D.

All of the above

Question 93

R acquired a property by way of gift from his father in the previous year 1991-92 when its FMV was Rs. 3 lakh. The father had acquired the property in the previous year 1983-84 for Rs. 2 lakh. This property was introduced as capital contribution to a partnership firm in which R became a partner on 10/06/2011. The market value of the asset as on 10/06/2011 was 10 lakh, but it was recorded in the books of account of the firm at Rs. 8 lakh. Compute the capital gain chargeable in the hands of R.

Options:

A.

Rs. 11,055/-

B.

Rs. 7,040/-

C.

Nil

D.

Rs. 3,075/-

Question 94

Ramesh retired as General Manager of XYZ Co. Ltd. On 30.11.2012 after rendering service for 20 years and 10 months. He received Rs. 300000 as gratuity from the employer. (He is not covered by Gratuity Act, 1972).

His salary particulars are given below:

He resides in his own house interest on monies borrowed for the self occupied house is Rs. 24000 for the year ended 31.03.2013

Compute taxable income of Ramesh for the year ended 31.03.2013.

Options:

A.

258900

B.

272600

C.

265450

D.

285470

Question 95

Omar wants to make a gift of Rs. 10000 in today’s terms to his parents at the end of each of next 10 years. If the annual rate of return is 8% and inflation is 3%, what is the value of funds he must have in hand today to meet this need for the 10 year period?

Options:

A.

81541

B.

77766

C.

76251

D.

82713

Question 96

What is the surrender value, if the sum assured is Rs. 100,000/-, DOC is 01/01/1997, endowment with profit 25 years, due date of last premium paid 01/01/2010. Premium to be paid semi-annually. Accrued bonus is 500 per thousand of SA. Surrender value factor is 19% ?

Options:

A.

23750

B.

21565

C.

15010

D.

12825

Question 97

_______ is an Over the Counter market

Options:

A.

Equity

B.

Debt

C.

Forex

D.

None of the above

Question 98

NRE stands for

Options:

A.

Non recurring expenses account

B.

Non resident External account

C.

Non recoverable expense account

D.

None of the above

Question 99

At the beginning of 2006 you have invested Rs 2000 in 40 Shares of ABC Ltd. During the year you received dividends @ 7 per share. At the end of 2006 you expect to sell share for Rs. 59. Compute return?

Options:

A.

114.80%

B.

32%

C.

1.32%

D.

14.89%

Question 100

The principle of _____________ ensures that an insured does not profit by insuring with multiple insurers

Options:

A.

Subrogation

B.

Contribution

C.

Co-insurance

D.

Indemnity

Question 101

Retiring early will need

Options:

A.

Normal saving as planned earlier

B.

Accelerated savings to get the goal

C.

Delayed savings

D.

All of the above

Question 102

Government has changed certain industries related regulation in Parliament, it is an example of:

Options:

A.

Interest rate risk

B.

Political risk

C.

Market risk

D.

None of the above

Question 103

Transfer of shares in the partnership firm is

Options:

A.

Restricted

B.

Freely transferable

C.

Prohibited

D.

None of these

Question 104

A bond can be issued at premium if

Options:

A.

Coupon rate > Required returns

B.

Coupon rate < Required returns

C.

Coupon rate = Required returns

D.

None

Question 105

Bond price is inversely related to yields

Options:

A.

TRUE

B.

FALSE

Question 106

Within how many days prospectus or statement in lieu of prospectus should file with ROC

Options:

A.

30

B.

40

C.

20

D.

50

Question 107

If any expenditure is incurred by an Indian company wholly and exclusively for the purpose of amalgamation or demerger, the said expenditure is

Options:

A.

Not allowable as a deduction in computing profits and gains of business or profession

B.

Allowed as a deduction spread over five successive previous year beginning with the previous year in which the amalgamation or demerger takes place

C.

Not deductible but is eligible to be treated as an intangible asset in respect of which depreciation can be claimed

D.

Fully deductible as revenue expenditure in the year in which it is incurred.

Question 108

NSSO stands for ____________

Options:

A.

National Security Space Office

B.

National Shared Services Organization

C.

National Sample Survey Organization

D.

None of the above

Question 109

As per Hindu succession Act 1956 following person is not considered as a class I heir of the person who dies intestate

Options:

A.

Widow

B.

Mother

C.

Father

D.

Son/Daughter

Question 110

Which of the following is not a key issue in retirement planning?

Options:

A.

Normal Retirement

B.

Early Retirement and Delayed Retirement

C.

Taxation on Retirement benefit

D.

Last drawn salary

Question 111

In Money laundering, a transaction involving cash used to buy high value goods,property or business assets is an example of which stage?

Options:

A.

Layering

B.

Placement

C.

Integration

D.

Confirmation

Question 112

Which of the following is not correct in relation to ETFs?

Options:

A.

ETFs provide exposure to an Index or a basket of securities that trade on the exchange like a single stock

B.

ETFs can be bought and sold on the exchange at prices that are usually closer to the actual intra –day NAV of the scheme

C.

ETFs trade very close to their actual NAVs

D.

Intra Day trading of ETFs is very expensive

Question 113

Which of the following is true of mortgage?

Options:

A.

Lender is mortgager

B.

Typical of hypothecation

C.

Possession handed over when charge created

D.

Transfer of interest on specific immoveable property

Question 114

"Which of the following can benefit from SARFAESI, 2002?"

Options:

A.

Banks

B.

Financial Institutions

C.

Both of the above

D.

None of the above

Question 115

The presence of _____ in financial markets leads to adverse selection and moral hazard problems that interfere with the efficient functioning of financial markets.

Options:

A.

non-collateralized risk

B.

free-riding

C.

asymmetric information

D.

costly state verification

Question 116

Mathematically the Efficient Frontier is the intersection of the Set of Portfolios with ....…. Variance and the Set of Portfolios with ……. Return.

Options:

A.

Maximum, minimum

B.

Minimum, maximum

C.

Minimum, minimum

D.

None of the above

Question 117

If an assessed earns rent from a sub-tenant in respect to tenanted property let out as a residence, the said rent is:

Options:

A.

Exempt under Section 10.

B.

Taxable under the head income from house property.

C.

Taxable as business income, as the letting out is a commercial activity.

D.

Taxable as income from other sources, unless the assessed is in the business of subletting properties on a regular basis.

Question 118

Unabsorbed depreciation can be carried forward for ____________.

Options:

A.

8 Years

B.

4 Years

C.

Indefinite

D.

None

Question 119

"Between the four items - Deposits; Borrowings; Reserves & Surplus; and Capital, which would appear last in the balance sheet of a bank?"

Options:

A.

Borrowings

B.

Deposits

C.

Reserves & Surplus

D.

Capital

Question 120

__________ records net change in ownership of foreign assets

Options:

A.

Capital Account

B.

Current Account

C.

Official Reserve Account

D.

Balance of Payments

Question 121

BIS handles each of the following, except ________.

Options:

A.

Forum to promote discussion and policy analysis

B.

Centre for economic and monetary research

C.

Credit rating of global banks

D.

Prime counter-party for central banks

Question 122

Which of the following can be a scheduled bank?

Options:

A.

Public Sector Banks

B.

Private Sector Banks

C.

Co-operative Banks

D.

All of the above

Question 123

Which principle apply to life insurance contracts?

Options:

A.

Principal of Indemnity

B.

Doctrine of subrogation

C.

Doctrine of contribution

D.

None of the above

Question 124

SHG stands for:

Options:

A.

Society Housing Group

B.

Society Household Group

C.

Self House Group

D.

Self Help Group

Question 125

“Premium” is associated with

Options:

A.

Forward

B.

Futures

C.

Options

D.

All of the above

Question 126

Often burdened with loan and generally both of the spouses work to earn their living. Under which category this type of family falls?

Options:

A.

Mature family

B.

Young family

C.

Empty Nesters

D.

None of the above

Question 127

In a life insurance contract, offer refers to

Options:

A.

Proposer paying the first premium

B.

Proposer’s application form for insurance

C.

Original policy bond

D.

Company brochure duly authenticated

Question 128

The provision of fraudulent transfer is given in-

Options:

A.

Section 49 of the Transfer of Property Act, 1882

B.

Section 50 of the Transfer of Property Act, 1882

C.

Section 51 of the Transfer of Property Act, 1882

D.

Section 53 of the Transfer of Property Act, 1882

Question 129

The Basel Committee has defined gross income as net interest income and plus net non-interest income and has allowed each relevant national supervisor to define gross income in accordance with the prevailing accounting practices. Accordingly the Reserve Bank of India in the draft guidelines issued on 11.03.2005 for implementation of the new capital adequacy framework has modified the Gross Income definition slightly. The Net Interest Income has been replaced by

Options:

A.

Net Profit

B.

Operating Profit

C.

No Changes made

D.

Interest Expended

Question 130

Accumulation, preservation and distribution are stages of

Options:

A.

Financial Life cycle

B.

Human Life Cycle

C.

Human Life Value

D.

All of the above

Question 131

Under flexible exchange rates a small open economy should

Options:

A.

lose control of its monetary policy

B.

be insulated from its trading partners' inflation

C.

tend to experience the inflation of its trading partners

D.

find that changes in its interest rates match changes in its trading partner's interest rates

Question 132

If there is an expectation of large decline in interest rates, which of the following investments should you choose?

Options:

A.

Low-coupon short term bond

B.

High coupon short term bond

C.

Long term zero coupon bond

D.

Short term zero coupon bond

Question 133

The operatives Guidelines for Banks on Mobile Transactions in India were issued

Options:

A.

2008

B.

2009

C.

2010

D.

2011

Question 134

In ULIP plans, the returns are dependent on in which the investments are done by the insurance company

Options:

A.

Shares

B.

Fixed Deposit

C.

Foreign exchange rates

D.

None of the above

Question 135

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:

Options:

A.

Nuncupative will

B.

Holograph will

C.

Sham will

D.

Manuscript will

Question 136

Which of the following statement is true?

Options:

A.

A bond with a balloon payment cannot not have a sinking fund

B.

Calculation of the returns earned on a high-yield security should include the sale price of the bond as well as interest received.

C.

A firm may not repurchase bonds at a discount.

D.

A diversified portfolio of high-yield securities may be achieved with ten or fewer bonds.

Question 137

What is the most essential characteristic to be in existence at the stage of establishing client relationship?

Options:

A.

Collection of personal details

B.

Establishing trust and confidence

C.

Data gathering from the client

D.

Providing the client with an healthy atmosphere

Question 138

“Income rule” in Insurance advocates

Options:

A.

Cover of at least 8 - 10 times of one’s gross annual income

B.

Cover of at least 5- 6 times of one’s gross annual income

C.

Cover of at least 4-5 times of one’s gross annual income

D.

Cover of at least 10 - 12 times of one’s gross annual income

Question 139

A Foreign Bank is one

Options:

A.

Whose most of the branches is situated outside India

B.

In which at least 40 % shares are held by non resident Indians

C.

Which is incorporated outside India

D.

None of these

Question 140

To take care of the risks during the foreign travel, Overseas Travel Insurance policy cover provides various other covers, in addition to __________ insurance, such as baggage cover, loss of transport cover, personal accident cover, personal legal liability cover etc.

Options:

A.

Medical

B.

Health

C.

Life

D.

Property

Question 141

Deduction under section 80C to 80U is allowed from:

Options:

A.

gross total income

B.

gross total income exclusive of long-term capital gain

C.

gross total income exclusive of long-term capital gain as well as short-term capital gain

D.

gross total income exclusive of long-term capital gain from any asset and short-term capital from the transfer of shares and units through a recognized stock exchange

Question 142

Where a coparcener with only his widow as legal heir dies, Can a partition be deemed as between the surviving coparcener and the widow on his death?

Options:

A.

Yes it is a deemed as a partition u/s 6 of Hindu succession Act

B.

Where the deceased dies issueless leaving a widow there is no question of a deemed partition u/s 6 of Hindu succession Act.

C.

None of the above

D.

Either of the Two

Question 143

Inflation refers to ............

Options:

A.

Increase in price rise

B.

Decrease in price rise

C.

Fall in money value

D.

A and C

Question 144

One should accept a project if NPV is

Options:

A.

Positive

B.

0

C.

Negative

D.

None of the above

Question 145

Onshore wealth management involves ____________

Options:

A.

Suggesting products and services available across the globe

B.

Suggesting products and services available within the client’s country of residence

C.

Suggesting products and services available outside the client’s country of residence

D.

None of the above

Question 146

A review of portfolio should be done when

Options:

A.

One witnesses a change in micro level factors

B.

One witnesses a change in macro level factors

C.

One witnesses new products floating in the market

D.

All of the above

Question 147

All the following statements concerning unsystematic risk are correct EXCEPT:

Options:

A.

It cannot be reduced by diversification.

B.

It is that portion of total risk that is unique to the particular firm.

C.

It may be affected b changes in consumer preferences and the competence of the firm’s management.

D.

Such risk may be independent of factors affecting other industries

Question 148

Which of the following is not true in respect of the conditions essential for taxing income under the head income from House Property?

Options:

A.

The property must consist of buildings and land appurtenant there to

B.

The assessed may or may not be the owner of such house property

C.

The property may be used for any purpose, but it should not be used by the owner for the purpose of any business or profession carried on him, the profits of which are chargeable to tax.

D.

None of Above

Question 149

Financial goals must be SMART. SMART stands for _________________

Options:

A.

Seek, Measure, Attainable, Realistic, Time bound

B.

Seek, Monitor, Attainable, Realistic, Time bound

C.

Specific, Measurable, Attainable, Realistic, Time bound

D.

Specific, Measurable, Attainable, Rewarding, Time bound

Question 150

Which of the following statements in reference to REPO Rate is/are correct?

Options:

A.

I,II and III

B.

I and II

C.

I and III

D.

II and III

Question 151

In case of self occupied property, higher deduction u/s24(b) for interest on loan for construction can be claimed if borrowing was made

Options:

A.

After 1/4/99

B.

on or after 1/4/99

C.

Before 1/4/99

D.

On or after 1/9/2004

Question 152

According to the Gordon model, the discount rate used by the investors exhibits what type of relationship with the retention rate?

Options:

A.

A directly proportional

B.

An inversely proportional

C.

No relationship at all

D.

Option A & B both

Question 153

In case of public company memo must be signed by atleast ….… persons.

Options:

A.

One

B.

Two

C.

Seven

D.

Ten

Question 154

A security's beta coefficient will be negative if _____________.

Options:

A.

Its returns are negatively correlated with market index returns

B.

Its returns are positively correlated with market index returns

C.

Its stock price has historically been very stable

D.

Market demand for the firm's shares is very low

Question 155

EBT stands for

Options:

A.

Electronic belated transfer

B.

Electronic beginners transfer

C.

Electronic benefit transfer

D.

Electronic beginning transfer

Question 156

Which one of the following Sections of the Transfer of Property Act defines “Transfer of Property”?

Options:

A.

Section3

B.

Section4

C.

Section 5

D.

Section 6

Question 157

The length of the insurance industry’s business cycle is shortened because of

Options:

A.

Regulatory provisions

B.

High specialization

C.

Easy entry and exit conditions

D.

None of these

Question 158

For claiming exemption u/s 54G, the assessed shall acquire the new asset within:

Options:

A.

2 years from the date of transfer

B.

3 years from the date of transfer

C.

one year before or 2 years after the date of transfer

D.

one year before or 3 years from the date of transfer

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Total 1057 questions