Pass AAFM CWM_LEVEL_2 Exam With Practice Test Questions Dumps Bundle
2021 Valid CWM_LEVEL_2 test answers & AAFM Exam PDF
NEW QUESTION 733
Section B (2 Mark)
A bank recently loaned you Rs15,000 to buy a car. The loan is for five years (60 months) and is fully amortized. The nominal rate on the loan is 12 percent, and payments are made at the end of each month. What will be the remaining balance on the loan after you make the 30th payment?
- A. Rs 8,637.38
- B. Rs 8,363.62
- C. Rs 8,611.17
- D. Rs14,515.50
Answer: C
NEW QUESTION 734
Section A (1 Mark)
_________________ is a method to evaluate a large volume of consumer loans quickly with minimum labor.
This method is a statistical model which predicts whether the consumer will repay the loan or not.
- A. Credit Scoring
- B. Credit Process
- C. Debt consolidation
- D. Debt Scoring
Answer: A
NEW QUESTION 735
Section B (2 Mark)
Suppose you are working with two factor portfolios, Portfolio 1 and Portfolio 2. The portfolios have expected returns of 15% and 6%, respectively. Based on this information, what would be the expected return on well-diversified portfolio A, if A has a beta of 0.80 on the first factor and 0.50 on the second factor? The risk-free rate is 3%.
- A. 14.10%
- B. 13.30%
- C. 15.20%
- D. 10.70%
Answer: A
NEW QUESTION 736
Section B (2 Mark)
You may need to file your Returns in India under the following circumstances:
- A. I, II and III
- B. All of the above
- C. II and III
- D. III and IV
Answer: B
NEW QUESTION 737
Section C (4 Mark)
Your company had the following balance sheet and income statement information for 2003:
The industry average inventory turnover is 5. You think you can change your inventory control system so as to cause your turnover to equal the industry average, and this change is expected to have no effect on either sales or cost of goods sold. The cash generated from reducing inventories will be used to buy tax-exempt securities which have a 7 percent rate of return. What will your profit margin be after the change in inventories is reflected in the income statement?
- A. 2.40%
- B. 2.10%
- C. 5.30%
- D. 4.50%
Answer: D
NEW QUESTION 738
Section B (2 Mark)
You purchased one XYZ March 50 call and sold one XYZ March 55 call. Your strategy is known as
- A. A long straddle.
- B. A horizontal spread.
- C. A short straddle.
- D. A vertical spread.
Answer: D
NEW QUESTION 739
Section C (4 Mark)
Dinex Ltd, a leader in the development and manufacture of electronic devices, reported earnings per share of Rs 2.02 in 2003, and paid no dividends. These earnings are expected to grow 14% a year for five years (2004 to 2008) and 7% a year after that. The firm reported depreciation of Rs 2 million in 2003 and capital spending of Rs 4.20 million, and had 7 million shares outstanding. The working capital is expected to remain at 50% of revenues, which were Rs 106 million in 2003, and are expected to grow 6% a year from 2004 to 2008 and 4% a year after that. The firm is expected to finance 10% of its capital expenditures and working capital needs with debt. Dinex Ltd had a beta of 1.20 in 2003, and this beta is expected to drop to 1.10 after 2008. The current risk free rate is 7%.
Estimate the value per share today, based upon the FCFE model.
- A. 40.5
- B. 35.05
- C. 37.5
- D. 36.5
Answer: B
NEW QUESTION 740
Section A (1 Mark)
Which of the following can be the underlying for a commodity derivative contract?
- A. Interest Rate
- B. Gold
- C. NIFTY
- D. Euro-Indian Rupee
Answer: B
NEW QUESTION 741
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?
- A. On 12-10-2007
- B. On 01-10-2007
- C. On 28-09-2007
- D. On 22-09-2007
Answer: C
NEW QUESTION 742
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?
- A. $0.10 and $0.10
- B. $0.20 and $0.15
- C. $0.25 and $0.10
- D. $0.15 and $0.25
Answer: B
NEW QUESTION 743
Section A (1 Mark)
The concept of indemnity is based on the key principle that policyholders should be prevented from
- A. Insuring existing losses
- B. Making false insurance claims
- C. Profiting from insurance
- D. Paying excessively for insurance cover
Answer: C
NEW QUESTION 744
Section C (4 Mark)
Suppose you have a two-security portfolio containing Bonds A and B. The market value of Bond A is Rs.
6,000, and the market value of Bond B is Rs4,000. The duration of Bond A is 8.5, and the duration of Bond B is 4.0. Calculate the duration of the portfolio.
- A. 6.7
- B. 8.2
- C. 3.56
- D. 5.3
Answer: A
NEW QUESTION 745
Section A (1 Mark)
How can complaints provide the firm with great value?
- A. Resolving those ties up important resources
- B. They offer an opportunity to shed bad customers
- C. They can be a source of information for a company
- D. They provide a chance to prove the company is right
Answer: C
NEW QUESTION 746
Section A (1 Mark)
The Markowitz model identifies the efficient set of portfolios, which offers the
- A. Risk-free alternative for risk-averse investors.
- B. Least-risk portfolio for a conservative, middle-aged investor.
- C. Long-run approach to wealth accumulation for a young investor.
- D. Highest return for any given level of risk or the lowest risk for any given level of return.
Answer: D
NEW QUESTION 747
Section C (4 Mark)
Suppose that an investor makes an investment in Stock ABC and that over the next 12 months ABC appreciates by 10 percent. He then thinks of selling ABC for normal portfolio rebalancing purposes, but then come across an item in the, The Economic Times that sparks new optimism: Could ABC climb even higher?
Which answer describes the likeliest response from an investor with regard to exhibiting Regret Aversion Bias, given ABC's recent performance and this new information?
- A. I and II
- B. All of the Above
- C. II and III
- D. I or II
Answer: D
NEW QUESTION 748
Section B (2 Mark)
Information processing errors consist of
- A. I and II
- B. I, II and III
- C. I and III
- D. III and IV
Answer: B
NEW QUESTION 749
Section C (4 Mark)
Read the senario and answer to the question.
You have reviewed the investments of Nimita for the purview of retirement. You advise that a balance be restored from risk perspective and accordingly Rs. 15 lakh be shifted to a Debt MF scheme. You advise to further start SIPs immediately in the ratio of 60:40 in the newly started debt MF scheme and the existing Equity MF scheme for the next 21 years to accumulate a corpus so that the same sustains for the next 25 years if invested in an investment instrument yielding 7.50%. What approximate amount of SIPs should be made in Debt and Equity MF schemes?
- A. Rs. 55,400 in Debt MF scheme & Rs. 37,000 in Equity MF scheme
- B. Rs. 42,000 in Debt MF scheme & Rs. 28,000 in Equity MF scheme
- C. Rs. 60,000 in Debt MF scheme & Rs. 40,000 in Equity MF scheme
- D. Rs. 58,000 in Debt MF scheme & Rs. 39,000 in Equity MF scheme
Answer: C
NEW QUESTION 750
Section A (1 Mark)
An administrator is appointed if there is no nominated:
- A. Testator
- B. Donor of power of Attorney
- C. Executor
- D. Beneficiary
Answer: C
NEW QUESTION 751
Section A (1 Mark)
________________ is the most important source of revenue for local governments in US
- A. Property Tax
- B. Income Tax
- C. None of the above.
- D. Sales Tax
Answer: A
NEW QUESTION 752
Section A (1 Mark)
When markets are in equilibrium, the CML will be upward sloping
- A. Because it shows the optimum combination of risky securities.
- B. Because it contains all securities weighted by their market values.
- C. Because the price of risk must always be positive.
- D. Because the CML indicates the required return for each portfolio risk level.
Answer: C
NEW QUESTION 753
Section B (2 Mark)
A hired a bicycle from B. The written contract contained a clause which read "Nothing in this agreement shall render the owner liable for any personal injuries to the rider of the machine hired". Owing to a defect in the brakes of the cycle, A met with an accident and got injured. Can A recover Damages?
- A. Any of the above
- B. No, since a disclaimer by the owner has already been intimated
- C. Yes, because he is under the duty to take care of the bicycle
- D. No, because it is the rider who has to take care of the brakes
Answer: C
NEW QUESTION 754
Section A (1 Mark)
You buy a investment plan by investing Rs. 5000/- per month for first 12years if the investment pays Rs. 5000 for the next 12 years and the rate of interest is 15% per annum compounded monthly. How much amount would you have after 24 years?
- A. 0
- B. 1
- C. 2
- D. 3
Answer: B
NEW QUESTION 755
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