Nov-2021 AAFM CWM_LEVEL_2 Actual Questions and 100% Cover Real Exam Questions
CWM_LEVEL_2 Free Exam Questions & Answers PDF Updated on Nov-2021
NEW QUESTION 489
Section B (2 Mark)
Investors will choose investments that resonate with their own personality or that have characteristics that investors can relate to their own behavior. Taking the opposite view, investors ignore potentially good investments because they can't relate to or do not come in contact with characteristics of those investments.
For example, thrifty people may not relate to expensive stocks (high price/earnings multiples) and potentially miss out on the benefits of owning these stocks.
Which of the following Availability Bias have been exhibited in the case above?
- A. Retrievability.
- B. Categorization.
- C. Narrow range of experience.
- D. Resonance.
Answer: D
NEW QUESTION 490
Section B (2 Mark)
In the year to 31 March 2012, A Ltd (which is UK resident) made a UK trading profit of £100,000. The company's only other income consisted of rents received of £52,500 (net) from an investment property in Germany. These rents were received net of withholding tax of 25%. A Ltd has no associated companies.
The credit for double tax relief that will be given in the corporation tax computation for the year will be:
- A. £nil
- B. £13,125
- C. £17,500
- D. £14,000
Answer: D
NEW QUESTION 491
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 and sell the machine in the same financial year
- B. He should buy the new machinery first and sells the old machine in the next financial year
- 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 financial year 2011
Answer: B
NEW QUESTION 492
Section A (1 Mark)
Monitoring and rebalancing a portfolio over time involves all of the following costs EXCEPT
- A. Time involved in decision making.
- B. Possible impact on market price.
- C. Commissions.
- D. Holding a portfolio that is no longer adequately diversified.
Answer: D
NEW QUESTION 493
Section A (1 Mark)
The following is exempt income:
- A. Encashment of leave salary whilst in service
- B. Remuneration received for valuation of answer scripts
- C. Travel concession to employee
- D. Perquisites in India
Answer: C
NEW QUESTION 494
Section C (4 Mark)
Read the senario and answer to the question.
Vinay has come across two projects, each with a 12% required rate of return and under given cash flows:
If the projects are independent, you being a CWM would advise Vinay to:
- A. Accept both projects
- B. Reject both projects
- C. Accept Project A and Reject Project B
- D. Reject Project A and Accept Project B
Answer: A
NEW QUESTION 495
Section A (1 Mark)
A(n) __________________ guards against the losses in the value of a credit asset. It would pay off if the asset declines significantly in value or if it completely turns bad.
- A. credit option
- B. credit swap
- C. credit linked note
- D. standby letter of credit
Answer: A
NEW QUESTION 496
Section A (1 Mark)
Which of the following is true regarding the resistance level?
- A. It is the level at which a significant decrease in demand is expected.
- B. It is the level at which a significant increase in supply is expected.
- C. It tends to develop due to profit taking.
- D. It usually develops after a stock reaches a new low.
Answer: B
NEW QUESTION 497
Section A (1 Mark)
Nifty is a ..................
- A. Equal weighed index
- B. Value weighted index
- C. Price weighted index
- D. Hybrid index
Answer: B
NEW QUESTION 498
Section B (2 Mark)
From the following data calculate the covariance between stock A and stock B
- A. 0
- B. 1
- C. 2
- D. 3
Answer: A
NEW QUESTION 499
Section C (4 Mark)
Assume the following;
With this agreement, every 6 months, the transfer of funds takes place between fixed rate payer and floating rate payer.
What would Net Cash flows after 6-months from the initiation date?
- A. $11,25,000 from Fixed-Rate to Floating-Rate Payer
- B. $15,50,000 from Fixed-Rate to Floating-Rate Payer
- C. $12,75,000 from Fixed-Rate to Floating-Rate Payer
- D. $9,75,000 from Floating Rate Payer to Fixed Rate Payer
Answer: A
NEW QUESTION 500
Section B (2 Mark)
A bank has a limited geographic area. It would like to diversify its loan income with loans in other market areas but does not want to actually make loans in those areas because of their limited experience in those areas. Which type of credit derivative contract would you most recommend for this situation?
- A. Total return swap
- B. Credit swap
- C. Credit risk option
- D. Credit linked note
Answer: B
NEW QUESTION 501
Section B (2 Mark)
An employee who is not resident in the UK will be liable to UK income tax:
- A. On employment income arising only from duties performed in the UK (on the receipts basis)
- B. On all employment income arising both from duties performed in the UK and from duties performed overseas (on the remittance basis)
- C. On employment income arising from duties performed in the UK (on the receipts basis) and on employment income arising from duties performed overseas (on the remittance basis)
- D. On all employment income arising both from duties performed in the UK and from duties performed overseas (on the receipts basis)
Answer: A
NEW QUESTION 502
Section A (1 Mark)
Gift received is not taxable in hands of
- A. None of the above
- B. Society
- C. Individual
- D. HUF
Answer: B
NEW QUESTION 503
Section A (1 Mark)
During the past five years, the returns of a stock were as follows:
Calculate the expected rate of return
- A. 7.40%
- B. 9.23%
- C. 6.80%
- D. 8.50%
Answer: A
NEW QUESTION 504
Section A (1 Mark)
One aspect of the tax considerations in asset allocation is that
- A. Investors are exempt from taxes on capital gains once they reach age 65.
- B. Taxes on capital gains are deferred until the gain is realized.
- C. Capital gains are often taxed at a higher rate than income.
- D. Current income is seldom a significant consideration for an investor in the spending phase of the life cycle.
Answer: B
NEW QUESTION 505
Section A (1 Mark)
Amit has monthly net income of Rs10500. He has a house payment of Rs 4500 per month, a car loan with payments of Rs 2500 per month, a Visa card with payments of Rs 500 per month, and a credit card with a local department store with payments of Rs 1000 per month.
What is Amit's debt payments-to-income ratio?
- A. 1.24
- B. 0.38
- C. 2.63
- D. 0.81
Answer: B
NEW QUESTION 506
Section A (1 Mark)
Stock broker's human capital is _________ to stock market as compared to a school teacher
- A. Less sensitive
- B. More sensitive
- C. Sensitive at par
- D. No correlation
Answer: B
NEW QUESTION 507
Section B (2 Mark)
As per Double Taxation Avoidance Agreement, the Dividends in UAE is charged at:
- A. 0
- B. 1
- C. Nil
- D. 22.5
Answer: B
NEW QUESTION 508
Section B (2 Mark)
For calculation of liability of payment of gratuity to an employee on leaving service, the wage to be taken into account is
- A. None of the above
- B. Average wage earned during the entire service
- C. Average wage earned during the last 5 years
- D. Last drawn wage
Answer: D
NEW QUESTION 509
Section C (4 Mark)
Monika has a investment portfolio of Rs. 100000, a floor of Rs. 75000, and a multiplier of 2. So the initial portfolio mix is 50000 in stocks and 50000 in bonds. If stock market falls by 20%, what should Monika do?
- A. She should sell Rs.10000 of bonds and invest it into stocks
- B. She should buy Rs.20000 of stocks to average
- C. She should sell Rs.10000 of stocks and invest it into bonds
- D. She should sell stocks and bonds equally
Answer: C
NEW QUESTION 510
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