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Section B (2 Mark)
The favorable difference received by buyer/holder on the exercise/expiry date, between the final settlement price as and the strike price, will be recognized as ___________
Section B (2 Mark)
On 1st January 2011, Mr. Dutt took a personal loan of Rs.1,00,000/- for a period of 3 years at an 21% rate of interest. The loan is to be on monthly EMI on monthly reducing balance method.
What about be interest and principal amount to be paid in October 2013?
Section C (4 Mark)
As a CWM you are required to calculate the tax liability of an individual whose taxable income is:
• $321500 in SGD and he is a Singapore citizen
• £ 35214p.a (only dividends) and he is a UK citizen
Section A (1 Mark)
If a female dies without leaving any issue them property inherited from her father or mother the property will devolve upon
Section B (2 Mark)
When the income of an individual includes Rs. 20000 as the income of his minor child in terms of section 64(1A), taxable income in this respect will be:
Section C (4 Mark)
A rate of interest of 10% semi-annual compounded quarterly would be equal to -------------------- % per annum compounded annually.
Section A (1 Mark)
Which of the following act is done by the most dissatisfied customers?
Section C (4 Mark)
Pizer Drugs, a large drugstore chain, had sales per share of Rs122 in 1993, on which it reported earnings per share of Rs2.45 and paid a dividend per share of Rs1.12. The company is expected to grow 6% in the long term, and has a beta of 0.90. The current Risk Free Rate is 7%.
Estimate the appropriate Price for Pizer Drug and what would the profit margin need to be to justify the price per share if the stock is currently trading for Rs34 per share, assuming the growth rate is estimated correctly,
Section A (1 Mark)
A business angel is best described in which one of the following statements?
Section C (4 Mark)
Mr. Chopra runs a Garment Factory, he is very concerned about his retirement and wants you to help him out in planning for it. His Current annual expenses are Rs. 12,00,000 which would be rising at an annual rate of 8% pre- retirement and 2% post retirement. His current age is 50 years and he wants to work till the age of 65. The expected life expectancy in his family is 75 years. Calculate the monthly contribution he must make till his retirement if the pre- retirement returns are 12% p.a. compounded monthly and post-retirement returns are 8% p.a compounded annually.
Section B (2 Mark)
All of the following are assumptions made by technical analysts except:
Section C (4 Mark)
The following parameters are available for four mutual funds:
Calculate Treynor’s performance index for each of the funds on the assumption that r=6% where r stands for the risk – free interest rate.
Section B (2 Mark)
____________ are good examples of the limits to arbitrage because they show that the law of one price is violated.
Section B (2 Mark)
The expected market return 16 percent. The risk-free rate of return is 7 percent, and AB Co. has a beta of 1.1. The risk premium is
Section A (1 Mark)
Under which of the categories of asset you would put Real Estate in:
Section A (1 Mark)
The long term use is 120% of long term source. This indicates the unit has
Section C (4 Mark)
A Portfolio manager is holding the following portfolio:
The risk free rate of return is 6% and the portfolio’s required rate of return is 12.5%. The manager would like to sell all of his holdings in stock A and use the proceeds to purchase more shares of stock D. What would be the portfolio’s required rate of return following this change?
Section C (4 Mark)
NCH Corporation, which markets cleaning chemicals, insecticides and other products, paid dividends of Rs2.00 per share in 1993 on earnings of Rs4.00 per share. The book value of equity per share was Rs40.00, and earnings are expected to grow 6% a year in the long term. The stock has a beta of 0.85, and sells for Rs60 per share. (The treasury bond rate is 7%.)
Based upon these inputs, estimate the price/book value ratio for NCH and How much would the return on equity have to increase to justify the price/book value ratio at which NCH sells for currently?
Section A (1 Mark)
The difference between the cash price and the futures price on the same asset or commodity is known as the
Section B (2 Mark)
Withholding Tax Rates for payments made to Non-Residents are determined by the Finance Act passed by the Parliament for various years. The current rates for Technical Services are:
Section B (2 Mark)
On 1st February 2009, Mr. Dutt took a personal loan of Rs. 1,00,000 for a period of 3 years at an 21% rate of interest .The loan is to be on monthly EMI on monthly reducing balance method.
What would be interest and principal amount to be paid in November 2011?
Section B (2 Mark)
Rajiv's company was just surprised by a new competitor in their field. Rajiv wants to plan a way for his business to retake the lead. For this purpose, Rajiv offered a plan to compete in the market. Which one of the following parts of the strategic landscape has been described?
Section C (4 Mark)
Read the senario and answer to the question.
Mr. Saxena is planning to visit USA for the very first time in his carrier to promote software of his company and is expected to stay long. He wants to plan his journey in such a manner so that he can get maximum tax benefits in the FY 2007–08 from the residential status point of view. What is the latest date when he can afford to leave India & earn status of an NRI to get maximum tax benefits in assessment year 2008–09?
Section A (1 Mark)
Which of the following income is not exempt under section 10-IT Act 1961?
Section B (2 Mark)
Mr. Patel expects the stock of A to sell for Rs. 70/- a year from now and to pay Rs. 4/- dividend. 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 ?
Section B (2 Mark)
Portfolio A has expected return of 10% and standard deviation of 19%. Portfolio B has expected return of 12% and standard deviation of 17%. Rational investors will
Section A (1 Mark)
________ bias means that investors are too slow in updating their beliefs in response to evidence.
Section C (4 Mark)
An investor Mr. Dayal, executes a Long Strangle by buying a Rs. 4300 Nifty Put for a premium of Rs. 23 and a Rs 4700Nifty Call for Rs 43. The Nifty is at 4500
The Net Payoff of Long Strangle
• If Nifty closes at 4100
• If Nifty closes at 5300
Section B (2 Mark)
Consider a one-year maturity call option and a one-year put option on the same stock, both with striking price Rs100. If the risk-free rate is 5%, the stock price is Rs103, and the put sells for Rs7.50, what should be the price of the call?
Section A (1 Mark)
A bank is considering making a loan to Ram Kapoor. Ram has a gross salary per month of Rs40500 but has take-home pay of Rs27500 per month. What aspect of evaluating a consumer loan application is this fact most concerned with?
Section A (1 Mark)
Correlate, combine, cognize and __________ are the four C’s of CRM Process
Section B (2 Mark)
To pay for new equipment with a cash price of Rs7500, you need to borrow at 5.3% compounded monthly, then make monthly payments for 32 months. How many fewer months would it take to pay back the loan if you had also saved Rs600 to pay at the end?
Section B (2 Mark)
How much total interest is paid between the 5th and 11th payments inclusive on a loan that has monthly payments for 2 years and an original principal of Rs47 500? The loan rate is 6.6% compounded quarterly.
Section B (2 Mark)
The basic rate of income tax on non-savings incomein UK for tax year in 2011-12 is:
Section A (1 Mark)
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:
Section B (2 Mark)
Amount of liability of payment of gratuity is calculated at the rate of
Section A (1 Mark)
An option which gives the holder the right to sell a stock at a specified price at some time in the future is called a
Section C (4 Mark)
Suppose Nifty is at 4450 on 27th April. An investor, Mr. A, enters into a short straddle by selling a May Rs 4500 Nifty Put for Rs. 85 and a May Rs. 4500 Nifty Call for Rs. 122.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 4293
• If Nifty closes at 5158
Section B (2 Mark)
Which of the following is true with regard to wealth planner’s liability?
Section A (1 Mark)
Which of the following statements regarding inflation and investing are true?
Section B (2 Mark)
An analyst expects a firm’s earning per share to grow at 8% per year. If the firm now earns Rs. 3.50 a share, its earnings per share five years from now are expected to be:
Section C (4 Mark)
Mr. XYZ sells a Nifty Put option with a strike price of Rs. 4000 at a premium of Rs. 21.45 and buys a further OTM Nifty Put option with a strike price Rs. 3800 at a premium of Rs. 3.00 when the current Nifty is at 4191.10, with both options expiring on 31st July.
What would be the Net Payoff of the Strategy?
• If Nifty closes at 3980.55
• If Nifty closes at 4800
Section C (4 Mark)
Read the senario and answer to the question.
Raman is considering the purchase of a office building and, as part of his analysis, from the following given data calculate the appraised value of the property using the Income Approach?
Section B (2 Mark)
Mr. Dinesh is aged 35 years and has a wife aged 30 years old and two small children. His parents are also dependent on him and has a house against which he has taken a housing loan. What is the most important insurance cover required by him at this stage?
Section B (2 Mark)
A perspective on decision making based on the assumption that people typically show risk aversion; hence, when making decisions they view whatever losses may be involved as more painful than equivalent gains are desirable. We have an irrational tendency to be less willing to gamble with profits than with losses.
Section A (1 Mark)
An Agreement entered into between the Sellor and Buyer for transfer of the right / ownership of the property on an outright sale/purchase is known as __________.
Section C (4 Mark)
The Puri’s family includes a financially well-informed couple, both aged 34, and two children aged 4 and 6. They are financially sound, but were not in the market during the Indian Bull market of the 2003 to 2007 as many of their neighbors were. The couple’s total income, Rs. 12,00,000, which they do not expect to grow significantly in times to come
They have saved 15,00,000, which they hope will be the financial foundation from which they will send their children to college and retire comfortably.
Which of the following biases does the Puri Family suffer from:?
Section A (1 Mark)
At the time of renewal of working capital limits by a bank, the loan officer observed that M/s ABC’s utilisation of funds on a long term basis is 80% of the long term sources during the year. Which among the following would be the result of this kind of financial management?
Section B (2 Mark)
Compulsory maintenance of account is required u/s 44AA of IT, if the gross receipt/ total sales exceed _______
Section A (1 Mark)
As per ARTICLE 12 in DTTA with US , the maximum tax rate on the gross amount of the royalties or fees for included services in the Article is:
Section A (1 Mark)
All of the following are assumptions made by technical analysts except:
Section A (1 Mark)
In ________, the values exchanged by the contracting parties may not necessarily be equal
Section C (4 Mark)
Mr. Shyam has a portfolio consisting of two stocks A & B. Stock A has a standard deviation of 5 % while stock B has a standard deviation of 15%. Stock A comprises 40% of the portfolio and Stock B consists of 60%. If the correlation of returns of A & B is .5, the variance of return on the portfolio is _________.
Section B (2 Mark)
As per article 12 Double Taxation Avoidance Agreement with Singapore, Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that Contracting State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed__________ per cent.
Section B (2 Mark)
A bond has a market value of Rs100,000 and a duration of 9.42. What is the price value of a basis point?
Section A (1 Mark)
Aditya’s father has given him general power of attorney what does this mean?
Section C (4 Mark)
OHM Corporation, an environmental service provider, had revenues of Rs209 million in 1992 and reported losses of Rs3.1 million. It had earnings before interest and taxes of Rs12.5 million in 1992, and had debt outstanding of Rs109 million (in market value terms). There are 15.9 million shares outstanding, trading at Rs11 per share. The pre-tax interest rate on debt owed by the firm is 8.5%, and the stock has a beta of 1.15. The firm's EBIT is expected to increase 10% a year from 1993 to 1996, after which the growth rate is expected to drop to 4% in the long term. Capital expenditures will be offset by depreciation, and working capital needs are negligible. (The corporate tax rate is 40%, and the Risk free rate is 7%.)
Estimate the value of the firm.
Section B (2 Mark)
There are two parties to Power of Attorney, namely, Donor and Donee.
Section A (1 Mark)
__________ is the most important investment decision because it determines the risk-return characteristics of the portfolio.
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.
Section A (1 Mark)
_________________ is the most important source of revenue for states in US.
Section B (2 Mark)
What is the outstanding balance at the 23rd payment interval of a 16-year loan for Rs11 234 with semi-annual payments and an interest rate of 7.95% compounded quarterly?
Section B (2 Mark)
As per Double Taxation Avoidance Agreement, the Royalties in UK is charged at:
Section B (2 Mark)
A person is treated as being UK resident for a tax year if he or she is physically present in the UK for at least ___ days in the year or makes regular visits to the UK averaging at least ___ days per year. Fill in the blanks.
Section C (4 Mark)
Arvind Ltd. currently EPS is Rs.5. Its return on equity (ROE) is 25% and it retains 60% of its earning. Stocks of similar risk are priced to return 18%. What is the intrinsic value of Arvind Ltd’s Stock?
Section A (1 Mark)
Which of the following types of income is received by individuals without deduction of basic rate tax?
Section A (1 Mark)
Income which accrue or arise outside India but are received directly in India are taxable in case of:
Section C (4 Mark)
Read the senario and answer to the question.
Calculate the return on Jogen’s investments in SBI Ltd shares.
Section C (4 Mark)
Ms. Deepika is a famous Bollywood actress having a busy and successful professional business venture in the name of ‘Millennium Production House” with her childhood friend Navin. Initially she received few small assignments. But after a documentary film, which was welcomed by people of Mumbai, she becomes quite successful. She wants to set aside today a capital sum to be liquidated over the next 10 years for the care of her aged mother living alone in MADARUAI with her sisters. The desired income stream for her mother as per her status is Rs. 2,40,000 p.a. beginning after one year and rising 5% p.a. each year thereafter. Deepika belives that the investment earnings on the fund will be 8% p.a.
In the last 8 years, there was no looking back in the business with 22 employees and around Rs. 1.25 crore of annual income, net of all expenses. She leads a very comfortable life as a “modern successful single lady”. She has already constructed a house valuing Rs. 3.75 crore and has a portfolio of assets which include precious metals like gold, silver etc. worth Rs. 1.25 crore, direct and indirect investment in equities (mutual funds) Rs. 2.75 crores, bank deposits and small savings scheme investments Rs. 0.75 crore.
You as a CWM® has been approached by her, for advice on retirement planning. She expects to work for another 10 years and after that wants to pursue her hobbies of traveling and photography and want to be active in social work. She has expressed desire to leave half of her estate in equal proportion to her two nephews and donate other half to charitable trust “Mother Care”.
Section A (1 Mark)
The investors who buy the debt of troubled companies including subordinated debt, junk bonds, bank loans, and obligations to suppliers are called__________
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
Section A (1 Mark)
Quicker attention and resolution of complaints lead to ________
Section B (2 Mark)
Manav wishes to have a retirement corpus of Rs. 2,50,000/- in 30 years’ time. Assuming that he can earn a ROI of 12 % per annum, what amount he should invest yearly into a fund to reach his goal?
Section B (2 Mark)
Which of the following is closest to the forward price of a share price if
Dividend expected is 6%?
Section B (2 Mark)
NRIs are granted a special benefit by way of an option of being taxed at concessional tax rate of ________ as regards "investment income" and _______ as regards "long term capital gains" arising from "specified assets.
Section A (1 Mark)
______________are bonds issued by governments that pledge their "full faith and credit," including tax revenues, to repayment in US.
Section A (1 Mark)
Unabsorbed depreciation can be carried forward for ____________.
Section A (1 Mark)
Which of the following types of Beta has come into existence because of the growth of ETF market?
Section C (4 Mark)
Suppose ABC Ltd. is trading at Rs 4500 in June. An investor, Mr. A, shorts Rs 4300 Put by selling a July Put for Rs. 24 while shorting an ABC Ltd. stock. The net credit received by Mr. A is Rs. 4500 + Rs. 24 = Rs. 4524.
What would be the Net Payoff of the Strategy?
• If ABC Ltd closes at 4053
• If ABC Ltd closes at 5025
Section B (2 Mark)
The two aspects of Regret bias are_____________ and _____________.
Section C (4 Mark)
Sunil has an investment portfolio of Rs.100000; the initial portfolio mix is Rs.50000 in stocks, Rs.30000 bonds and Rs.20000 in bank. If market goes up by 10% and the value of bonds decreases by 10%, what should Sunil do under the constant mix policy?
Section A (1 Mark)
Select the CORRECT statement regarding basis risk associated with futures.
Section C (4 Mark)
Read the senario and answer to the question.
Calculate the tax liability of Mr. Neeraj for the A.Y.08–09 assuming that he has avail full deduction under section 80C
Section A (1 Mark)
Garima deposits Rs. 2,000/- every month in an account and is getting interest @ 12 % per annum compounded monthly. How much will be her nest egg after 10 years ?
Section A (1 Mark)
__________ organization try to segment their customers based on what product the customer purchased.
Section B (2 Mark)
Mr. Subhash Bansal, a marketing manager is employed with IMFB limited. He took an advance of Rs. 1,20,000 against the salary of Rs. 30,000 per month in the month of March 2007. The gross salary of Mr Bansal for the assessment year 2007-08 shall be:
Section A (1 Mark)
________ bias means that investors are too slow in updating their beliefs in response to evidence.
Section A (1 Mark)
Every employer is obliged to ensure that his employees get a safe and secure workplace. In relation to the risks arising in the workplace which affects the employees, cover is provided through
Section B (2 Mark)
If an investor determines that next year’s earnings estimate is Rs2.00 per share and the company subsequently falters, the investor may not readjust the Rs2.00 figure enough to reflect the change because he or she is “anchored” to the Rs2.00 figure. This is not limited to downside adjustments—the same phenomenon occurs when companies have upside surprises
Which of the following Biases have been exhibited by the investor?
Section A (1 Mark)
An agreement entered into between the owner of the vacate land and the builder/ developer is known ____________.
Section A (1 Mark)
A rapidly growing GDP indicates a(n) ______ economy with ______ opportunity for a firm to increase sales.
Section A (1 Mark)
In whose total income, the income of a minor child is included –
Section A (1 Mark)
Which of the following statements regarding debit and credit card liability is correct?
Section A (1 Mark)
We divide phenomena into different departments and try to optimize each department rather than the whole. Which of the following is most likely consistent with this bias?
Section A (1 Mark)
With regard to hedge funds, ‘2 and 20’ is best explained as:
Section C (4 Mark)
Consider the multifactor APT. There are two independent economic factors, F1 and F2. The risk-free rate of return is 6%. The following information is available about two well-diversified portfolios:
Assuming no arbitrage opportunities exist, the risk premium on the factor F1 portfolio should be __________.
Section B (2 Mark)
Fiscal policy generally has a _______ direct impact than monetary policy on the economy, and the formulation and implementation of fiscal policy is ______ than that of monetary policy.
Section A (1 Mark)
Which of the following is true regarding the resistance level?
Section B (2 Mark)
In US, all states except _________________ require their state, via state constitutional or statutory requirements, to balance their budget.
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 _________.
Section A (1 Mark)
Psychologists have found that people who make decisions that turn out badly blame themselves more when that decision was unconventional. The name for this phenomenon is
Section C (4 Mark)
The following were P/E ratios for some Asian markets in February 1994, with relevant information on interest rates and economic growth:
Assuming the dividend payout ratio in each of these countries is 60%, estimate the P/E ratio in South Korea and Thailand, based upon stable growth. (Use a risk premium of 7.5% over the risk-free rate in each country.)
Section C (4 Mark)
Watts Industries, a manufacturer of valves for industrial and residential use, had the following projected free cash flows to equity per share for the next five years , in nominal terms.
The terminal price is based upon a stable nominal growth rate of 6% a year after year 5. The discount rate, based upon financial market rates, is 14%, and the expected inflation rate is 3%.
Estimate the value per share, using nominal cash flows and the nominal discount rate.
Section B (2 Mark)
Consider the multifactor model APT with two factors. Portfolio A has a beta of 0.75 on factor 1 and a beta of 1.25 on factor 2. The risk premiums on the factor 1 and factor 2 portfolios are 1% and 7%, respectively. The risk-free rate of return is 7%. The expected return on portfolio A is __________ if no arbitrage opportunities exist.
Section C (4 Mark)
Mr. Sushobhan Adhikari, 56 years old, employee of Mega India Ltd, receives the following salary and perquisites from his employer during the previous year 2007–08.
A rent-free furnished house in Patna (rent of unfurnished house paid by employer- Rs. 84,000, rent of furniture Rs. 18,000, free services of a gardener (salary-Rs. 4,000), free services of cook (salary-Rs. 3,600), free services of watchman (salary-Rs. 900). He owns a small house at Patna.
Mr. Adhikari makes the following payments and investments during the year:
Mr. Adhikari comes to Mr. Gupta, CWM®, in September-2008 for developing a wealth plan to fulfill his financial goals. Mr. Adhikari will retire on 31st December, 2008 after completing 28 years of service. He is expecting a growth of Rs. 1,500 in his basic pay in the last year of his employment. The company is expecting a 5% growth every year in its turnover. His daughter Pallavi has completed her education and his main liability is the amount he may have to spend for her marriage. On his retirement he is expected to receive following amount:
He also has also informed to the planner following his other assets and investments:
He has given his Kolkata Flat on 12,500 p.m. rent. Municipal value of the property is Rs. 1,45,000, fair rent is Rs. 1,60,000 and standard rent is 1,40,000. Municipal tax paid by him are as follows:
In July, 2008 rent is increased from Rs. 11,500 to Rs. 12,500 pm with effect from 01/04/2007. Due to some dispute rent was not received in 2007–08 but all arrears of rent till date are paid on July 1, 2008. Maximum eligible amount of PPF contribution deposited in March, 2008.
His actual expenses before retirement are Rs. 23,500 per month.
Main goals of Mr. Adhikari:
●To provide for his daughter’s marriage
●Ensuring that his family is protected financially in the event of any mishap
●Minimize tax burden
●Establish an investment portfolio that gives high returns over long term
Assumptions:
●Mr. Adhikari needs to provide for himself and his family till he is 75.
●Inflation rate after retirement to be 4%
●Monthly expenses after retirement will be 15% less than before retirement
After detailed discussion, Mr. Gupta, CWM®, has suggested a revision in the portfolio as below to be implemented from October, 2008.
Section B (2 Mark)
What is the expected percentage price change for a bond with an effective duration of nine in response to an increase in yield of 30 basis points?
Section B (2 Mark)
Which of the following are the objectives of National Housing Bank in Indian Real Estate Market?
Section A (1 Mark)
Notice of loss should be given to the insurer within ________days of the event of loss.
Section A (1 Mark)
Following is/ are the component(s) of Personal Financial Statements
Section B (2 Mark)
Which of the following activities is/are a part of “Building the CRM project foundation phase “in CRM implementation?
Section B (2 Mark)
The current market price of a share of MOD stock is Rs15. If a put option on this stock has a strike price of Rs20, the put
Section B (2 Mark)
Mr. X gives Rs. 200000 to Mrs. X as gift. She invests in a proprietary concern and incurs a loss of Rs. 40000
Section B (2 Mark)
You purchase one ILM 70 call option for a premium of Rs6. Ignoring transaction costs, the break-even price of the position is
Section A (1 Mark)
After the satisfaction of insured’s claim from the insurer, the insured should pursue in the recovering of rights from the 3rd party.
Section C (4 Mark)
Mr. Vivek Kalra deposits Rs.11,00,000 today in an investment that would pay after 6 years Rs. 1,00,000 per year for 5 years and Rs. 1,50,000 for the next 5 years. What would be the balance in the account after the last payment is made if the ROI is 18% per annum compounded annually?
Section B (2 Mark)
Conventional theories presume that investors ____________ and behavioral finance presumes that they ____________.
Section B (2 Mark)
You write one XYZ February 50 put for a premium of Rs5. Ignoring transactions costs, what is the breakeven price of this position?
Section C (4 Mark)
Shikha has an 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 goes up by 20%, what should Shikha do?
Section A (1 Mark)
If a testator makes a will ‘to induce another person to make him comply with his (testators) wish’ but does not have any testamentary operation or intention, then this will is called as
Section C (4 Mark)
Read the senario and answer to the question.
What is the monthly extra saving at beginning required to be done by Raman during his remaining working period to accumulate his required retirement corpus?
Section C (4 Mark)
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.
Section C (4 Mark)
Mr. Rajesh constructs a Long Straddle Strategy with one Nifty Call Option having a Strike price of Rs. 4500 available at a premium of Rs. 122 and one Nifty Put Option with a strike price Rs. 4500 at a premium of Rs. 85
What would be the Net Payoff of the Strategy?
• If Nifty closes at 4234
• If Nifty closes at 4766
Section C (4 Mark)
What amount needs to be deposited today in an account that would pay Rs. 1,10,000 per year for the first 10 years and Rs. 2,25,000 for the next 5 years. If the ROI for the first 10 years if 10.75 % p.a. compounded annually and 13% p.a. compounded quarterly for the balance period?
Section A (1 Mark)
____________ is defined as a dollar per thousand dollars of assessed value of property and is used to calculate a property owner's tax bill.
Section C (4 Mark)
Read the senario and answer to the question.
Mrs. Deepika’s brother is impressed with Manav Fashion Ltd. an online clothing firm that focuses on the 18–22 age bracket. Their prices are much lower than their competitors, and the quality is high. Reading about the firm on its web site and in various financial newspapers, her brother has learned that the company plans to expand its clothing lines. The prevailing price of its share is 70 per share. Manav Fashion Ltd. has had recent annual earnings of Rs. 5 per share. Only three other companies have very similar business to Manav Fashion Ltd. and have stock that is traded and there PE ratios are as follows:
Her brother asked Mrs. Deepika to guide him in investing the Manav Fashion Ltd. Getting the query from her brother Mrs. Deepika asks your advice on this matter. As a Chartered Wealth Manager what will be your advice?
Section A (1 Mark)
These people are so well balanced, they cannot be placed in any specific quadrant, so they fall near the center.
Section A (1 Mark)
The bank's real estate loan officer should consider which of the following aspects of the customer's loan application carefully when making a home mortgage?
Section A (1 Mark)
According to the __________________ if irrational traders cause deviations from fundamental value, rational traders will often be powerless to do anything about it.
Section A (1 Mark)
If a married couple (or civil partners) receive joint income, the amount of that income will normally be divided equally between them for tax purposes. True or False?
Section A (1 Mark)
The principle in real estate valuation which acknowledges limitation on growth in market value, not ably in the case of improvements is known as:
Section A (1 Mark)
Teena Dutta wants to buy a used car and wants a loan that she will pay off over the next three years with monthly payments. What type of loan does Teena want?
Section C (4 Mark)
Saurabh decided to invest Rs.1,00,000/- in a portfolio of equities and debt mutual funds. He invests Rs. 60,000/– in equities, and 40,000/– in debt mutual fund.
A year later, Saurabh’s portfolio worth reached to Rs. 1,35,000/– (90,000/– equity, 45,000/– debt mutual fund). During the year Rs. 2,500/– cash dividends was received on the equity and Rs. 1,000/– dividend was received on debt mutual fund. Find out Saurabh’s return on equity fund & debt mutual fund for the year?
Section B (2 Mark)
Mr. A purchased certain shares of a company during the financial year 1987-88 for a sum of Rs.1,50,000/-. A sold the shares during the financial year 2011-12 for Rs.8,10,000/- when the market is at all time high. Calculate the amount of capital gains. [CII-12-13: 852,11-12: 785,10-11:711]
Section A (1 Mark)
After buying two stocks, one rises by 25% an d the other drops by 25%. You congratulate yourself on your brilliance for the first stock and blame bad luck on the second. You are demonstrating which investor bias?
Section B (2 Mark)
The risk-free return is 9 percent and the expected return on a market portfolio is 12 percent. If the required return on a stock is 14 percent, what is its beta?
Section A (1 Mark)
Pure premium and Loss Ratio methods are two methods to determine
Section A (1 Mark)
A(n) _____________ is an assurance that investors will be repaid in the event of the default of the underlying loans in a securitization. These can be internal or external to the securitization process and lower the risk of the securities.
Section A (1 Mark)
The basic competitive factors facing industries include all of the following except:
Section B (2 Mark)
As Per Article 12 Double Taxation Avoidance Agreement with US, _____per cent of the gross amount of the royalties or fees for included services as defined in this Article, where the payer of the royalties or fees is the Government of that Contracting State, a political sub-division or a public sector company.
Section A (1 Mark)
We try to avoid actions that confirm that we have made mistakes. Which of the following is most likely consistent with this bias?
Section B (2 Mark)
Mr. Aggarwal is working in a reputed company and earning Rs. 4,50,000/- p.a. and is now 55 years old. He has invested Rs. 2,00,000/- in an annuity which will pay him after 5 years a certain amount p.a. at the beginning of every year for 10 years. Rate of interest is 8% p.a. Calculate how much he will receive at the beginning of every year after 5 years?
Section B (2 Mark)
An investor is considering the purchase of a small office building and, as part of his analysis, form the following given data calculate the appraised value of the property using the Income Approach.
Section A (1 Mark)
Mr. X’s minor daughter earned Rs. 50000 from his special talent. This income will be clubbed with
Section B (2 Mark)
A Resident is defined as not Ordinarily Resident provided such individual has been: a non- resident in 9 out of 10 Financial Years preceding the current year or his stay in India totals to _________days or less in ___________financial years preceding the current year.
Section B (2 Mark)
A property has 120 rooms and each room has a monthly rent of Rs.750. The occupancy rate throughout the year is 80% and maintenance expenses per year works out to be Rs.3,00,000. Capitalization rate is 12%. Calculate the value of the property.
Section A (1 Mark)
In case of Credit Assessment, if the lender accepts the application and takes it forward towards acceptance provided it passes through the risk assessment criterion, then the Credit Score Band of the borrower would be:
Section A (1 Mark)
A cognitive heuristic in which decisions are made based on an initial 'anchor__________
Section B (2 Mark)
The breakdown of commodity future returns over the past 30 days for 2 upcoming oil future contracts is given below:
What is the roll return for the period 15th September to 15th October for the contracts maturing in November and February?
Section A (1 Mark)
_______________ and _______________ mandates are two kinds of service level contracts
Section C (4 Mark)
Pacific Asia reported net income of Rs770 million in 1993, after interest expenses of Rs320 million. (The corporate tax rate was 36%.) It reported depreciation of Rs960 million in that year, and capital spending was Rs1.2 billion. The firm also had Rs4 billion in debt outstanding on the books, rated AA (carrying a yield to maturity of 8%), trading at par (up from Rs3.8 billion at the end of 1992). The beta of the stock is 1.05, and there were 200 million shares outstanding (trading at Rs60 per share), with a book value of Rs5 billion. Pacific Asia paid 40% of its earnings as dividends and working capital requirements are negligible. (The Risk Free rate is 7%.)
Estimate the free cash flow to the firm in 1993.
Section A (1 Mark)
Which of the following industry categories is said to be “bought to be sold?”
Section B (2 Mark)
Which of the following statements with respect to International Taxation Structure is/are correct?
Section A (1 Mark)
Response of listening falls under which one of the following categories?
Section A (1 Mark)
Where the return of income is filed after the due date specified u/s 139(1):
Section B (2 Mark)
Reliance Ltd. has issued a preferred stock that pays Rs.10 per share. The dividend is fixed and the stock has no expiration date. What is the intrinsic value of Reliance Ltd. stock, assuming a discount rate of 14%?
Section B (2 Mark)
___________ applies where there are multiple transactions which are inter-related and cannot be evaluated separately for the purpose of determining arm’s length price of any one transaction.
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?
Section C (4 Mark)
Omax Inc. one of the largest developer of residential projects, reported earnings per share of Rs 8.0 in 2003, and paid dividends per share of Rs 4.8 in that year. The firm is expected to report earnings growth of 25% in 2004, after which the growth rate is expected to decline linearly over the following six years to 7% in 2009. The stock is expected to have a beta of 0.85 and current risk free rate is 6.25%.
Estimate the value of the firm using the H Model.
Section B (2 Mark)
Which of the following two outcomes is an example of Status Quo Bias:
Section B (2 Mark)
In 2011-12, an individual receives a net dividend of £648. The equivalent gross income is:
Section B (2 Mark)
The modified duration of a bond is 7.87. The percentage change in price using duration for a yield decrease of 110 basis points is closest to:
TESTED 11 May 2024
