Chartered Wealth Manager First Internal Exam

What exactly real rate of return takes into account?

Mutual fund is not

Non-marketable financial products includes

_________ is simply whatever an asset returned over a certain period and does not compare it to any other measure.

___________means “stepping into the shoes” of another person. In insurance it implies if the insured has any rights against third parties, the insurer on payment of the claim takes over these rights.

If rent is paid for a house situated in Delhi, the house rent allowance shall be exempt to the maximum extent of

Which of the following amount is not allowed for deduction from income from house property?

During these years we become completely self-supporting. These are the critical years where we establish the financial habits that will determine our financial future. This life stage is

A type of lease where there is no payment schedule and penalty for a set period of lines

A ____________ is designed to manage and protect assets for a child until they reach a specified age.

Which of the following is of no relevance in evaluating a fund’s performance?

Which of the following banks are not covered under banking ombudsman scheme

Assets transferred by the Settlor to a trust do not form part of the Settlor’s assets, provided that the Settlor is not the sole Trustee and does not control the Trustee’s actions. This is an explanation of

This kind of trust can be set up within a will or living trust. This trust is

Which of the following body does not perform quasi regulatory function

An investment has earned 5%, 10%, 12%, 14% and 6 % over a period of five years. What will be the cumulative wealth index at the end of five years?

A rupee received today is worth more than a rupee receivable in

A has invested Rs. 1,00,000 in a savings instrument maturing after 10 years. On its maturity, he receives a sum of Rs 75,000/- as interest. What rate of interest is realized in this transaction?

While calculating the NPV of an investment proposal, we use an estimate of the opportunity cost of capital as

Which means reduction in the value of an asset due to usage, passage of time, wear and tear, technological outdating or obsolescence, depletion or other such factors?

In recession, GDP

Under this the wealth manager executes or selects brokers to execute securities transactions on behalf of the client

In which markets, the instruments are sold to one or a few buyers under private contract?

Who has instructed banks to maintain adequate capital on a continuous basis?

Which one of the following is the field of economics that studies the behavior of the economy as a whole and not just on specific companies, but entire industries and economies?

What is the process by which the government, central bank, or monetary authority of a country controls to attain a set of objectives oriented towards the growth and stability of the economy?

What is the amount by which a government, private company, or individual’s spending exceeds income over a particular period of time?

Which one of the following is defined as the difference between current government spending on goods and services and total current revenue from all types of taxes net of transfer payments?

Which of the following is deducted from GNP at market price while calculating GNP at factor cost

In _____________value added is the difference between the gross margin and the cost of intermediate outputs

Which of the following items are not excluded while calculating national imcome through expenditure approach

______________is a world in which initial barriers to coordination and disagreement over effective risk management approaches are overcome in the context of rapidly shifting geo-economic power.

These are low growth low share products

These are relatively newer debt funds. Unlike other debt funds, credit opportunities funds do not invest as per the maturities of debt instruments.

____________take a call on the interest rates and invest predominantly in debt securities with extended maturities. This makes them more stable than dynamic bond funds

____________ is the prospect of loss resulting from inadequate or failed procedures, systems or policies such as employee errors, systems failures, fraud or other criminal activity, any event that disrupts business processes.

Which of the following can raise ECB through the approval route

NAV of a mutual fund is

Riskless rate in addition with risk premium is multiplied by standard deviation of portfolio for using to calculate expected return rate on

Type of premium asked by investors for bearing risk on average stock is classified as

Consider a stock which earns the following returns over a six year period: 0.14; -0.12; -0.08; 0.25; 0.08; 0.20. The cumulative wealth index at the end of the six year period, assuming a beginning index value of
one rupee, is:

When assessing the benefits and risks of Financial Integration, it is useful to identify which of the following types of financial integration
I)Integration of the public sector
II)Integration of the corporate sector
III)Institutional and Individual investors buy and sell the stocks and bonds of other countries’ firms
IV)The integration of the banking sector

Which of the following are the broad channels of contagion which have been identified in the literature:
I) Real links,
II) Financial links, and
III) Herding behavior or “unexplained high correlations.”

Which one of the following is an agreement made between countries, where the countries agree to trade freely among themselves, and also they agree to adopt common external barriers against any country attempting to import into the customs union?

Due to which of the following reasons India was not affected much by the 2008 financial crisis
I) Low dependence on global flows on capital and trade as external trade contributes only 20% to GDP
II) A very strong and effective market regulators -RBI, SEBI, and most importantly FMC
III) Foreign investments returned India in 2008-2009 with FDI inflows of over $27 billion showing their confidence in the India growth story
IV) India followed an Expansionary fiscal policy in the form of two fiscal stimulus by lowering interest rates, expanding credit and reducing excise duty, pumping money into the economy

The average inflation for last 3 years is 8.5% p.a You invested Rs. 1 lakh in a security 3 years ago which you have redeemed for Rs. 1.3 lakh. What real return you have received from the investment?

Deepak arora invested Rs. 10,000/- in a scheme and got Rs. 13,700/- after 2 years. Please calculate the CAGR of this investment?

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 %, please calculate the Net present Value of these cash flows?

Jolly’s debt mutual fund portfolio has generated returns of 11% p.a over a period of 2 years. She wants to know the actual return on her portfolio, after tax and inflation if her income tax slab is 30% and inflation is 6%

Ranjan saves Rs. 5000 every year at the beginning for 5 years and Rs. 7000 p.a. at the begin for 10 years thereafter. What will be the total amount in his account after 15 years if ROI is 10% p.a.

Calculate the inflation rate if the interest rate and real rate are 10% and 8% respectively?

Using the following information calculate the HPR
Buying Price (2015) = Rs.230
Selling Price (2017) = Rs.250 Dividend received during the period of holding = Rs.100

Total return is defined as

Rs. 1000 par value bond makes two interest payments each year of Rs. 45 each. What is the bond’s coupon rate?

Suhani needs Rs. 24000 at the end of year 7. Suhani wants seven end of year payments, with the first payment occurring one year from today. You can treat this as an annuity and calculate PV today. Rate of interest 10%.

Mr. X joined in a company on 20th March 2017 and died in an accident on 30th November, 2017 The company pays gratuity as per the Payment of Gratuity Act. His terminal monthly wages was: Basic Pay is Rs. 9000 , DA Rs. 5000 , HRA Rs. 2000. What amount his nominee would get as Gratuity?

You bought 50 shares @Rs.145 per share. The company declared the dividend of Rs.4 per share for every year. You sold the shares @Rs. 165 per share. Calculate the CAGR on the investments after the period of 4 years.

Urfi had invested Rs. 3lakh (30,000 units) @ NAV 10 on 16 June 2014 in an equity MF. The dividend is declared to be given @1.5 per unit on 16th June 2015, 2016, 17 and 18. On 16th June 2019, she decided to redeem the units @NAV 14. She wants to know the actual return that she’s got on her investment?

Mr. A has bought 1000 shares at Rs. 100 and received the dividends Rs. 2000 and Rs. 1500.At the end his NAV is Rs. 150. Calculate the return.

Mr. dave is planning to buy a stock of XYZ Ltd. for Rs.800, and sell the same on a later date at Rs.900. He also thinks that during his holding period he will receive a dividend amounting to Rs.10 per share. Calculate the holding period return for the stock of XYZ Ltd.?

A risk which is classified as its contribution to risk of portfolio is classified as

Risk on a stock portfolio which cannot be eliminated or reduced by placing it in diversified portfolio is classified as

Rashi has deposited Rs. 7,00,000 in a bank today @ ROI of 10 % per annum compounded monthly. She wants to know that if she withdraws this money in monthly installments at the END of the month for 7 years, then how much will be each installment amount?

Mr. Jain is planning to invest in a security where he is considering the investment in 2 stocks A and B with stock A generating the returns of 15%, 20%, 25%, 30% and stock B generating the returns of 14%, 9%, 13% and 22%.According to you, in which security Mr. Jain should invest on the basis of geomeric mean ?

A money back policy for SA. of Rs.75,000/-. Matured after 25 years. Survival benefits of 20% each had been paid at the end of 5th, 10th, 15th and 20th years. Bonus had accrued at Rs.980/- per Rs.1000/- SA. Interim bonus @ Rs.20/- per thousand SA is payable. What is the maturity claim amount.

Rani requires a monthly income of Rs. 35000 by today’s value for her retirement 25 years away at the age of 60. She expects to live up to 80 years. What is the retirement corpus required if the bank deposit into which she will invest her retirement savings is likely to yield 8% and the rate of inflation is 6%. Currently she is 40 years old.

For piece rated employees, the amount of gratuity is on the basis of the daily wages to be computed on

Bhel Corporation has a relative systematic risk level that is 40% greater than the market as a whole. The expected return on the market is 16%, and the risk- free rate is 7%. Based on the CAPM, the required rate of return for bhel is

ABC Ltd., common stock has a beta of 0.90, while XYZ Ltd., Company common stock has a beta of 1.80. The expected return on the market is 10 percent, and the risk-free rate is 6 percent. According to the capital-asset pricing model (CAPM) and making use of the information above, the required return on ABC Ltd., common stock should be______ and the required return on XYZ Ltd., common stock should be__________

For monthly rated employees, the amount of gratuity is on the basis of

Suppose I want to be able to withdraw Rs. 5000 at the end of each year for five years and withdraw Rs. 6000 at the end of each year for 6 years, leaving a zero balance in the account after the last withdrawal. If I can earn 5% on my balances, how much must I deposit today to satisfy my withdrawal needs?

Suppose you wish to retire forty years from today. You determine that you need Rs. 50,000(in current terms) per year once you retire. You estimate that you will earn 8% per year on your retirement funds and that you will need funds up to and including your 25th birthday after retirement. How much must you deposit in an account today so that you have enough funds for retirement? Inflation 5%.

Your client starts investing in Rs. 72000 p.a. immediately for 25 years in the suggested ratio of 75:25 in equity and debt products for his retirement. You expect a return from equity and debt to be 12% p.a. and 8% p.a. during this period. To protect the wealth, he rebalances the portfolio in 25:75 ratio of equity and debt after 20 years and invests in the new ratio for the next 5 years. What would be the total accumulation at the end of the period?

Rajvir invested Rs. 1,00,000 in a Bank Deposit at 10% per annum compounded Quarterly, for 5 years. Calculate the effective and real rate of return Premchand is getting if inflation is at 6.5%?

Mr. X who is 40 years old spends annually Rs. 7 Lakhs towards his household expenses. He expects to retire at 60 years. Inflation is 6% p.a. He wants to cover 35 years of living expenses for self and spouse. Inflation in post-retirement is expected to be 4% p.a. and generate a return of 7% from his corpus. What corpus he should target for a comfortable retirement?

Suresh wants to achieve the goal of the marriage of his daughter after 20 years. The funds required would be Rs. 30 lakhs at then costs. He wants to invest monthly for the goal. You suggest an asset allocation strategy where he should invest monthly in equity for 18 years, and shift the entire accumulated amount in these funds to liquid fund at the end of 18 years. If the returns expected from equity and liquid funds in this period are 12% p.a. and 5% p.a. respectively. What approx. amount per month is required to be invested in equity schemes?

Ms. Vanya has a portfolio comprising securities A, B and C. The Standard Deviations are 0.1689, 0.0716 and 0.0345 respectively. The Correlations are: AB= 0.45, AC= 0.35, BC= 0.2 Weights are 25%, 50% and 25%respectively. Calculate Standard Deviation of Ms. vanya Portfolio.

A shopkeeper bought 75 air conditioners at a total cost of Rs.45 lakh for his offices on 1st June 2016. The cost of a similar new air conditioner declined to Rs.55000. The industry norm of the depreciation charged on the air conditioners is 38% on written down value basis. At what appropriate value he should insure the set up on next due date 1st June, 2017?

Suppose Ram is 30 years of age and gets 450000 as her salary p.a. Her salary increases by 10% every year and she saves 20% every year in a fund. How much will be accumulated at age 60 when rate of return is 12%?

Calculate the NPV of an investment project with an initial cost of Rs. 5 lakhs and positive cash flows of
Rs. 1.6 lakhs at the end of year1,
Rs. 2.4 lakhs at the end of year 2 and
Rs. 2.8 lakhs at the end of year 3. Use 12% as the discount rate.

If Mr. Jagdish’s current annual expense Rs.300000, how much should be saved in the beginning of every month to get inflation adjusted expenses during post retirement? Calculate By using the following information:
Current age 30 years, he will be retiring at the age 60 and his life expectancy is 85 years
Pre-Retirement ROI : 10% p.a.
Post-Retirement ROI: 14% p.a.
Inflation : 6% p.a.

Sushant aged 35 years is married and is working as a manager in M/s Zenith Ltd. His most likely retirement age is 60 years. His present salary is Rs. 3, 00,000/- pa and self-maintenance expenses are 30,000/- per year. He pays Life insurance premium of 15,000/- and Income tax & professional tax amount to Rs. 20000/-. Rate of interest assumed for capitalization of future income is 8%. Calculate prashant’s HLV to recommend adequate insurance cover

Shreyas started investing in Rs. 10,000 p.m. five years ago in an asset allocation of 50:50 in equity and debt to achieve a goal in 10 years from now for accumulating Rs. 30 lakhs. He has lost his job and has to cut down his monthly investment to Rs. 4000. He expects equity and debt to give a return of 11.75% and 8.25% p.a. respectively. He wants to know if he can achieve his accumulation goal?

Meenal is 31 years old and plans to retire at 53. Her life expectancy is 75 years. Her wealth planner , estimates that Meenal will require Rs. 60,000 in today’s terms at the end of first month after retirement. She wishes to leave behind an estate of Rs. 10,00,000 for her legal heirs. Inflation rate is 5% p.a. The ROI is 13% p.a. What amount she shall save at the end of every year till her retirement to accumulate the required corpus?

Mr. Avinash was working with a firm not covered under the Gratuity Act from 1/01/1980 to 31/03/2009. His Last drawn salary (inclusive of Basic, D.A. & Commission) is Rs. 19,500/- and ten months average salary amounting to Rs. 18,800/-. His firm pays him Rs. 2,80,000/- as gratuity on retirement. Calculate the taxable amount of gratuity.