Chartered Wealth Manager (CWM®)- 1st Internal Exam

Investing Rs. 100,000 in a Fixed deposit paying 8% p.a. quarterly compounded rate of interest will yield ____________ after 5 years.

Real estate investments generally take 6 to 8 months to convert to cash, and there can be significant difference between bid and ask price. This kind of investment can be called _____________

Which of the following is a SMART goal?

Solvency ratio is usually __________ in the case of young couples as compared to senior citizens.

Sanjay is going to purchase a bike which costs Rs. 75,000. He will pay Rs. 10,000 in cash and take a loan for the rest of the amount at 12.5% simple interest for 2 years. What amount he’ll pay every month?

As per rule 69 of doubling, what is the doubling period if rate of interest is 9%

Which of the following is a key difference between GDP and GNP?

What is the difference between real GDP and nominal GDP?

During inflationary periods, nominal interest rates are ________ than real interest rates.

__________ records net change in ownership of foreign assets.

Seigniorage is ____________.

How does the global economic environment, including international interest rates, impact interest rates within a country?

What is the relationship between the Bond price and its yields

“Contango” is

An inverted yield curve implies that:

Consider two bonds, X and Y. Both bonds presently are selling at their par value of Rs.1000. Each pays interest of Rs.150 annually. Bond X will mature in 6 years while bond Y will mature in 7 years. If the yields to maturity on the two bonds decrease from 15% to 12% then what will happen to their value?

Spread is defined as ___________________.

Company Deposits are regulated by

What is a significant limitation of using beta as a measure of risk?

What is Market Risk Premium?

Is it possible to reduce the risk by adding a security with a higher risk to a security with a lower risk that is already held?

As additional securities are added to a portfolio, total risk will generally ________ at a _________ rate.

Investment made in a stock 2 years ago is Rs.1250; the Final value is Rs.1300. The dividend received at the end of 2nd year is Rs.150. What is the CAGR?

All the following statements concerning unsystematic risk are correct EXCEPT:

In a life insurance contract, consideration refers to …

Which of the following statement is correct?

In ________, the values exchanged by the contracting parties may not necessarily be equal.

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

P Ltd. sets the target to produce 1000 tonnes of steel during the next six months to recover the cost, but there is a possibility that due to strikes and lockouts the targeted output may not be archived. What type of risk is associated with the production process?

In the context of Motor Insurance, what does ‘IDV’ stand for, and what is its significance?

An investor deposits Rs. 5,000 at the end of every six months into an account that earns 8% interest per year, compounded semi-annually. What will be the value of this annuity after 10 years?

An investment offers 5% interest for the first 2 years, then 6% for the next 3 years, compounded annually. If one invests Rs. 15,000, what will its value be at the end of 5 years?

An investor deposits Rs. 4,000 for the first 3 years and then Rs. 5,000 for the next 2 years into an account earning 7% p.a compunding annually. What is the total value of the investment after 5 years?

What are the main components of the Balance of Payments, and how do they contribute to either a surplus or deficit?

In a scenario where the central bank wants to decrease the Money Supply, what specific monetary policy tools can it use, and how do they work?

What role does the Repo Rate play in influencing inflation and economic growth?

In book building method if the floor price is set at 100, what can be the maximum price of the cap?

If a Rs. 100 par value preferred stock pays an annual dividend of Rs. 5 and comparable yields are 10 per cent, the price of this preferred stock will be______?

Under the Sovereign Gold Bond (SGB) scheme, what tax benefit is provided on the capital gains arising at the time of redemption for individual investors?

According to Modern Portfolio Theory, the optimal portfolio for an investor is the one that offers:

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?

The portfolio manager adds new stock to a portfolio. The stock has the same standard deviation as the existing portfolio but a correlation coefficient with the existing portfolio that is less than +1.What effect will adding the new stock have on standard of the revised portfolio?

Sunil insured the building of his house for a sum of Rs.500,000 against fire insurance. One day the house is totally gutted in a devastating fire. The insurance surveyors certified that the building is a total loss with no salvage value and that the insurable value of the building just prior to the loss was Rs.10,00,000. The insurer will pay to Sunil:

Mr. Gupta has got his stock insured against fire for Rs5,00,000,during the year he lost the stock in his warehouse for Rs. 4,00,000. The surveyor from insurance company gave his report that at the time of fire the stock in the warehouse had value 6,00,000
Calculate what amount Mr. Gupta will receive from the insurance company.

What is the primary purpose of the ‘Errors & Omissions / Professional Liability’ insurance?

You plan to invest Rs. 7,000 per month for the first 8 years and then increase your monthly contribution to Rs. 10,000 per month for the next 12 years. If the investment plan offers a 12% annual interest rate compounded monthly, how much money will you have in the account after 20 years?

Mr. Mehta is forecasting a series of cash inflows from a small project. He expects to receive ₹1,500 at the beginning of each month for the first 2 months, ₹2,500 for the following month, and then ₹3,000 for the next 2 months. Each cash inflow starts from the beginning of the month. Calculate the Present Value of this cash inflow series if the rate of interest is 9.75%. p.a. compounded quarterly.

In a country, consumer spending (C) is $1,500 billion, private investments (I) are $800 billion, government spending (G) is $400 billion, exports (X) are $300 billion, and imports (M) are $250 billion. What is the GDP of the country?

How does fiscal policy impact an economy’s overall economic performance, and what are the potential drawbacks of using fiscal policy measures?

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 15 per cent will decline linearly over a five year period and then stabilize at 10 per cent. What is the intrinsic value of MAGADH ’s share if the investors’ required rate of return is 15 per cent?

Mr. Patel expect that stock of A to pay Rs. 4/- dividend and then sell for Rs. 70/- a year from now. If the stock’s correlation with the Market is –0.3, and the standard deviation of A is 40% and standard deviation of the Market is 20% and the risk-free rate of return is 5% and the market risk premium is 5%, what would be the price of stock A be now ?

Mr. Ram has invested Rs. 275,000 in equity share of Birla sun life ltd. The indicative return on share is 15% And the risk free return on the tresury bill is 7%.The market rate of return is 11%.Calculate the required rate of return to the investors.Market risk is given as 0.20.

A portfolio consists of 3 securities.
The proportion of these 3 securities are: W1 = .2, W2 = .4, W3 = .4
The standard deviation of return on these securities in terms of percentage is: S1 = 6, S2 = 9, S3 = 10
The correlations efficient among security returns are: P12 = 0.4, P13 = 0.6, P23 = 0.4
What is the standard deviation of the portfolio?

Azhar aged 40 years is married and is working in MNC. His most likely retirement age is 60 years. His present salary is Rs. 4,00,000/- pa. His self-maintenance expenses are Rs. 60,000/- per year. Life insurance premium paid is Rs. 20,000/-. Income tax & professional tax amount to Rs. 20,000/-. Rate of interest assumed for capitalization of future income is 12%. What should be the adequate life insurance cover for Sachin according to HLV method?

Sunil, aged 33 years, has a policy of Rs. 1 Lac sum assured and is paying the premium of Rs. 1,800/- for the last 10 years. The cash surrender value of this policy is at the end of the previous year was Rs. 20,000. It is estimated that by this year end, the cash surrender value of this policy would be Rs. 22,900 (including bonus).

There is another term insurance of sum assured of Rs. 80,000 costs Rs. 300/- per annum which is available to him. If the rate of interest is 6%, then first calculate the CPT of existing and new policy respectively and then advise Sunil if it is better to continue this policy or to discontinue it?