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GLO_CWM_LVL_1 Chartered Wealth Manager (CWM) Global Examination Questions and Answers

Questions 4

Mr. Neeraj Gupta wants to withdraw Rs. 50,000 per quarter form an account after 3 years for 6 years. How much should he deposit in this account today if the ROI is 12% p.a. compounded quarterly.?

Options:

A.

846777

B.

593912

C.

693912

D.

774921

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Questions 5

Ramesh aged 50 could not save for his retirement till date but now decides to save Rs. 50000 per month till his retirement age of 65. He anticipates that the return in the first 5 years would be 13% p.a. next 5 years 10% and in the last 5 years 8% p.a. He wants to accumulate a corpus of Rs. 1.50 Crores till his retirement. Calculate the surplus or shortfall he would have on his retirement.

Options:

A.

Surplus 40 Lacs

B.

Shortfall 40 Lacs

C.

Surplus 29 Lacs

D.

Shortfall 15 Lacs

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Questions 6

Alok a 28 years old person has joined SABH on 1/07/2006. His monthly salary (net salary) after deduction is payable Rs. 22500/. His monthly expenses details are as follows:

GLO_CWM_LVL_1 Question 6

Assume Alok takes a flat on rent from 01 /07/2006. On 01 /07/2006 he has cash in hand Rs. 1450/-. He starts paying insurance premium from October @ Rs. 2500/- pm. His investments in Mutual fund SIP are Rs. 3000/- pm for a 6 month period. What will be his cash in hand on 31/03/2007.?

Options:

A.

Rs.72150/-

B.

Rs.83150/

C.

Rs.69070/-

D.

None of the above

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Questions 7

Vinod is projecting an income stream providing Rs. 2,000/- for first 3 months, Rs. 3,200 for next 2 months, Rs. 4,500 for next 1 month, Rs. 3,700 for next 6months and Rs. 800 for 2 months thereafter. Please calculate the Present Value of this cash stream if rate of interest is 9%

Options:

A.

24465.92

B.

25817.12

C.

24,513.72

D.

23478.68

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Questions 8

A zero coupon bond of Rs 10,000 has a term to maturity of seven years and a market yield of 9 percent at the time of issue. What is the issue price? What is the duration of the bond? What is the modified duration of the bond?

Options:

A.

Rs. 5470/-, 7 years, 6.422

B.

Rs. 6380/- 6 years, 7.368

C.

Rs. 5470/-, 7 years, 5.364

D.

Rs. 6380/-, 6 years, 6.897

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Questions 9

The probability distribution of the rate of return on a stock is given below:

GLO_CWM_LVL_1 Question 9

What is the standard deviation of return?

Options:

A.

5.69

B.

5.46

C.

7.9

D.

9.4

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Questions 10

What is the present value of the following cash flows,if the Interest rate is 8%

GLO_CWM_LVL_1 Question 10

Options:

A.

2639

B.

2962

C.

3961

D.

3962

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Questions 11

Ram deposits Rs. 12,500 in an account that pays a ROI of 20% pea compounded annually on 5th. Of March 2010. Calculate the date on which the balance in his account would be Rs.35,338/-.

Options:

A.

15thOf November 2015

B.

15thOf August 2015

C.

25thOf November 2015

D.

15th. Of August 2016

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Questions 12

What is the portfolios standard deviation if you put 25% of your money into stock A which has a standard deviation of 15% and rest into stocks B which has a standard deviation of 10%. The correlation coefficient between the returns of the stocks is .75.?

Options:

A.

11.25%

B.

10.60%

C.

12.40%

D.

15.00%

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Questions 13

Mr. Raja Ram is working as a regional head in a Pharmaceutical Company. He has a annual income of Rs. 10,00,000. He will be retiring in next ten years. His current expenses are Rs. 5,00,000. The inflation rate for the foreseeable future is expected to be 5%. He assumes that his post retirement expenses will be 70% of his last year expenses of his service and they will increase at inflation rate and paid at the beginning of each year. On his retirement He plans to leave his current rented apartment and shift into a spacious and airy bungalow located on the suburbs of the city (his long cherished dream). The current price of the bungalow is Rs. 24 lakh which is estimated to increase in line with inflation rate. A ten year government security paper fetches 10% interest rate, which will remain constant for the forthcoming period. He is in good health and expects to live for twenty years after retirement.

As a CWM® you are required to calculate the amount he needs to save at the end of ten years on an annual basis so that he can pay his post retirement expenses as well as buy his dream house.

Options:

A.

4.67 lacs

B.

7.219 lacs

C.

7.56 lacs

D.

6.56 lacs

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Questions 14

The correlation coefficient between returns on stock of M/s X Ltd and the market returns is 0.3. The variance of returns on M/s X Ltd. is 225(%)2 and that for the market returns is 100(%)2 . The risk-free rate of return is 5% and the market return is 15%. The last paid dividend is Rs. 2 and the current purchase price is Rs. 30. The growth rate for the company is 10%. The required rate of return on the security as per the Capital Asset Pricing Model is:

Options:

A.

10%

B.

11.30%

C.

9.50%

D.

12.50%

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Questions 15

Consider the following information for three mutual funds:

GLO_CWM_LVL_1 Question 15

Market Return 10%

Risk free return is 6%.

Calculate the Risk Adjusted Return on the basis of Jensen measure (%)?

Options:

A.

3.45, 7.78, 4.38

B.

2.50, 8.50, 6.60

C.

3.60, 2.40, 6.20

D.

3.65, 8.88, 9.36

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Questions 16

Consider two stocks, A and B

GLO_CWM_LVL_1 Question 16

The returns on the stocks are perfectly negatively correlated.

What is the expected return of a portfolio comprising of stocks A and B when the portfolio is constructed to drive the standard deviation of portfolio return to zero?

Options:

A.

22.24

B.

20.48

C.

19.57

D.

24.62

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Questions 17

Kapil is employed by SIDBI. He receives the following emoluments/facilities during 2006-07: Basic Salary Rs.1,40,000 DA (forming part of salary) Rs.9,000 Sale of computer to him by employer sale price Rs.20,000 (Cost of computer Rs. 2,00,000 used by employee for 3 years and 9 months) Rent free accommodation, the F.R.V. of which is Rs. 24,000 p.a. His taxable income for the assessment year 2007-08 shall be:

Options:

A.

211600

B.

183800

C.

178800

D.

174800

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Questions 18

The expected return and standard deviations of stock A & B are:

GLO_CWM_LVL_1 Question 18

Amit buys Rs.20,000 of Stock A and sells short Rs.10,000 of Stock B using all the Proceeds to buy more or Stock A. The correlation Between the two securities is .35. What are the expected return & standard deviation of Amit’s portfolio?

Options:

A.

3.5%, 15.5%

B.

8.8%, 7.03%

C.

20%, 14.5%

D.

9.8%, 15.6%

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Questions 19

Mr. Pradip completed construction of a residential house on 1.4.2011.

Interest paid on loans borrowed for purpose of construction during the 2 years prior to completion was Rs. 40,000. The house was let-out on a monthly rent of Rs. 4,000.

GLO_CWM_LVL_1 Question 19

Property was vacant for 3 months.

Compute the income under the head “Income from House Property” for the A.Y. 2012-13.

Options:

A.

Rs 1000

B.

1500

C.

5000

D.

3500

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Questions 20

An investor is considering the purchase of a small office building and, as part of his analysis, form the following given data calculate the Net Operating Income (NOI)?

GLO_CWM_LVL_1 Question 20

Options:

A.

Rs. 2,10,000

B.

Rs. 1,97,500

C.

Rs. 1,93,500

D.

Rs. 1,83,750

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Questions 21

Samantha celebrated her 21st birthday today, her father gave her Rs. 6,25,000/- which is deposited in a account that pays a ROI of 12.25% p.a. compounded monthly. If she wants to withdraw Rs. 7,50,000 on her 31st. Birthday and balance on her 41stBirthday. How much can she withdraw on her 41st. birthday.?

Options:

A.

2114431

B.

1364431

C.

4615995

D.

4333264

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Questions 22

Mr. John purchased a house in Mumbai in March 2010 for Rs.12,50,000. In April,2011 he entered into an agreement to sell the property to Mr. Akram for a consideration of Rs.19,75,000 and received earnest money of Rs. 50,000. As per the terms of the agreement, the balance payment was to be made within 30 days of the agreement. If the intending purchaser does not make the payment within 30 days, the earnest money would be forfeited. As Mr. Akram could not make the payment within the stipulated time the amount of Rs.50000 was forfeited by John. Subsequently John sold the house in June, 2011 for Rs.2130000. He paid 2% brokerage on sale of the house. Calculate the capital gains chargeable to tax for the assessment year 2012-13. [CII-12-13: 852,11-12: 785,10-11:711]

Options:

A.

659322

B.

887400

C.

689536

D.

692556

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Questions 23

Mr. D'suza is a operations manager in a private company college in Hyderabad. During the previous year 2011-12, he gets the following emoluments:

He gets Rs. 17,500 as reimbursement from his employer in respect of medical expenditure incurred on treatment of his wife in a private clinic. Besides, he gets Rs.12, 300 as reimbursement from the employer in respect of books and journals purchased by him in discharging his official work.

He contributes 11% of his salary to statutory provident fund to which a matching contribution is made by the employer. During the year, he spends Rs.17, 000 for maintaining a car for going to the college. Determine his net income under the head salaries.

Options:

A.

Rs 395300

B.

Rs 375700

C.

Rs 415300

D.

Rs 418900

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Questions 24

Mr. Kumar is a 40 year old NRI working abroad for past 5years. He invests Rs. 50, 000/- p.a. for past 5 years and wants to continue until his return to India. He plans to return to India after 10 years from now and enjoy his life back home. Inflation is expected to be 4% for next 30 years and his investment earns 6% interest. His expected life expectancy is 70 years. What would be his corpus at the time of return to India, and what amount he can with draw per month for his household expenses?

Options:

A.

Rs. 12,14,279/- and Rs. 6,358

B.

Rs. 11,63,798/- and Rs. 5,845

C.

Rs. 13,12,008/- and Rs. 7,008

D.

Rs. 12,14,279/- and Rs. 9,554

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Questions 25

X furnishes the following particulars for the compilation of his wealth-tax return for assessment year 2012-13.

GLO_CWM_LVL_1 Question 25

Options:

A.

Rs. 2 lakh

B.

Rs. 9.50 lakh

C.

Rs. 17 lakh

D.

Rs. 9 lakh

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Questions 26

Rhona has a daughter Zena five years old. She wants to plan for Zena’s education and has found out that she would be requiring 2,75,000 at her age 18 and another 4,50,000 on her age 25. She also wants to have Rs. 10,00,000 for Zena’s Marriage which she expects at the age of 28. She wants to deposit the entire amount for these expenses today in an account that pays a ROI of 15% per annum compounded annually. What would this amount be?

Options:

A.

40174

B.

27495

C.

144695

D.

112365

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Questions 27

Pankaj is an employee of a private company in Jabalpur. He draws an amount of Rs 36,000pm as basic salary. He also receives Rs 8000 as HRA. He has taken a house on rent from 1st October and pays Rs 10,000pm as rent for his house accomodation. What would be the taxable HRA?

Options:

A.

Rs. 96,000

B.

Rs 19,200

C.

Rs 76,800

D.

Rs 57,600

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Questions 28

Puspinder Singh Ahluwalia took a housing loan on 1st. of June 2009 (EMI in arrear) of Rs. 50 lacs at a ROI of 10.75% p.a. compounded monthly for 12 years. He wants to know the deduction in taxable income he can claim u/s 24 of the IT act for the FY 2011 -12

Options:

A.

480178

B.

150000

C.

330178

D.

125000

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Questions 29

Ram purchased a house in Mumbai in March 2004 for Rs.12,50,000. In April, 2011 entered into an agreement to sell the property to Shyam for a consideration of Rs.19,75,000 and received earnest money of Rs.50,000. As per the terms of the agreement, the balance payment was to be made within 30 days of the agreement. If the intending purchaser does not make the payment within 30 days, the earnest money would be forfeited. As Shyam could not make the payment within the stipulated time the amount of Rs.50,000 was forfeited by Ram. Subsequently Ram sold the house in June,2012 for Rs. 21,30,000. He paid 2% brokerage on sale of the house. Calculate the capital gains chargeable to tax for the assessment year 2012-13. [CII-12-13: 852,11-12: 785,10-11:711,03-04:463]

Options:

A.

52,843

B.

659322

C.

253565

D.

659002

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Questions 30

The list of managing body needs for be fixed with Registrar of Joint Stock companies

GLO_CWM_LVL_1 Question 30

Options:

A.

Only (i)

B.

Only (ii)

C.

(i) & (iii)

D.

Only (iv)

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Questions 31

Your client, a businessman has a house worth Rs. 2.1 crore and a farm house worth Rs. 85 lakh. His business is worth Rs. 10 crore as per last balance sheet. He has two other partners in the business having stakes of 24% each. He has two cars purchased at Rs. 40 lakh and Rs. 20 lakh, the latter being in personal account. The cars have depreciated/market value at Rs. 30 lakh and Rs. 8 lakh, respectively. His joint Demat account, wife being primary holder, has stocks worth Rs. 1.65 crore. The business has taken Keyman‟s insurance on his life of value Rs. 1.5 crore. He has himself insured his life for an assured sum of Rs. 1.5 crore. You evaluate your client’s estate in case of any exigency with his life as _____.

Options:

A.

Rs. 8.20 crore

B.

Rs. 9.56 crore

C.

Rs. 10.51 crore

D.

Rs. 5.73 crore

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Questions 32

What is the surrender value, if the sum assured is Rs. 100,000/-, DOC is 01/01/1997, endowment with profit 25 years, due date of last premium paid 01/01/2010. Premium to be paid semi-annually. Accrued bonus is 500 per thousand of SA. Surrender value factor is 19% ?

Options:

A.

23750

B.

21565

C.

15010

D.

12825

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Questions 33

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?

Options:

A.

Income Protection Cover and Life Insurance Cover

B.

Life Insurance Cover and Mortgage Cover

C.

Accident policy Cover and Critical Illness cover

D.

Child education Cover

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Questions 34

Which of the following statement is true?

GLO_CWM_LVL_1 Question 34

Options:

A.

Statement I & II is false.

B.

Statement I is false & II is true.

C.

Statement II is true.

D.

Both statements are true.

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Questions 35

A maximum of _____% of the trade done by a fund house can be routed through a single broker

Options:

A.

5

B.

10

C.

25

D.

50

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Questions 36

"To be sure to receive same day credit on a Saturday, NEFT instruction has to be given by _______."

Options:

A.

11:30 AM

B.

11:00 AM

C.

12 Noon

D.

12:30 PM

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Questions 37

An investor investing Rs. 7,282.58 on March 1, 2012 and getting Rs. 10,000 back on February 28, 2017 would have a yield to maturity (YTM) of _____%.

Options:

A.

6.58

B.

6.55

C.

6.61

D.

6.64

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Questions 38

You are given the following set of data on security ABC:

GLO_CWM_LVL_1 Question 38

Calculate the expected return on security ABC?

Options:

A.

0.12

B.

0.15

C.

0.13

D.

0.14

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Questions 39

A person is on the verge of retirement. He has sufficient funds to meet his daily regular expenses and even he has sufficient insurance coverage. He owns a house property. His family consists of him and his wife only. As a Chartered Wealth manager, which insurance policy would you suggest him?

Options:

A.

Regular annuity policy.

B.

Householders policy.

C.

Med claim policy.

D.

Both B & C.

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Questions 40

Total income for assessment year 2007-08 of an individual including long-term capital gain of Rs. 60,000 is Rs. 1,40,000. The tax on total income shall be:

Options:

A.

Rs. 8,800

B.

Rs. 8,160

C.

Rs. 7,000

D.

Rs. 5,000

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Questions 41

Ram born in 1950 has a life expectancy at birth of 65 years. Sita his wife born in 1955 has a life expectancy at birth of 70 years. Assuming that the life expectancies have not changed. Ram is planning to buy an annuity to be paid to him or his wife till anyone of them is alive. Assuming Ram will retire on attaining age 58 i.e. in 2008, what should be the time period of the annuity?

Options:

A.

10 years

B.

12 years

C.

7 years

D.

17 years

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Questions 42

Purpose of budget is ____________

Options:

A.

Spend money wisely

B.

Reach financial goals

C.

Prepare for financial emergencies

D.

All of the above

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Questions 43

A 12 year annual annuity of Rs. 10000 will begin 8 years hence (the first payment occurs at the end of 8 years). What is the present value of this annuity if the discount rate is 14 percent?

Options:

A.

Rs. 22898.12

B.

Rs. 22620.63

C.

C.Rs. 23456.78

D.

D.Rs. 22124.95

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Questions 44

Spread is defined as ___________________.

Options:

A.

Difference in price between two futures contracts on different commodity for two different maturity dates

B.

Difference in price between two futures contracts on the same commodity for two different maturity dates

C.

Difference in price between two futures contracts on different commodity for two same maturity dates

D.

None of the above

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Questions 45

Mr. Kishan owns a factory producing some small spare parts.Under which policy he can get cover against the claim for paying damages and legal costs arising from any bodily injury or damage in the premises of his property ?

Options:

A.

Key man Insurance policy

B.

The directors’ and officers liability policy

C.

Product Liability insurance

D.

Public Liability Insurance

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Questions 46

International credit cards can be used by Indians for _________.

Options:

A.

International travel

B.

International magazines

C.

International software

D.

Any of the above

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Questions 47

An assessee was allowed deduction of unrealized rent to the extent of Rs. 40,000 in the past although the total unrealized rent was Rs. 60,000. He is able to recover from the tenant Rs.45,000 during the previous year on account of such unrealized rent. He shall be liable to tax to the extent of:

Options:

A.

Rs. 45,000

B.

Nil

C.

Rs. 25,000

D.

Rs. 35,000

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Questions 48

Which one of the following is/are correct?

GLO_CWM_LVL_1 Question 48

Options:

A.

(i) only

B.

(iii) only

C.

(i), (ii), (iii)

D.

None is correct

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Questions 49

Akash has only compulsory third party policy for his car. He jumped a red light and collided with another car and then with the boundary wall of a nearby house. Damage to his car was of Rs. 17,000/-, damage to other car was of Rs. 15,000/- and damage to the boundary wall of house was of Rs. 15,000. The insurance policy of Akash will pay:

Options:

A.

Rs. 17,000

B.

Rs. 15,000

C.

Rs. 30,000

D.

Rs. 47,000

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Questions 50

The second pillar in the Basel framework seeks to help participants to assess which of the following information?

Options:

A.

Risk exposure

B.

Risk assessment process

C.

Both of the above

D.

None of the above

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Questions 51

Which of the following are the agency functions of a Commercial Bank?

GLO_CWM_LVL_1 Question 51

Options:

A.

I ,II and III

B.

I , III and IV

C.

I, II and IV

D.

All of these

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Questions 52

Which of the following statements are true?

GLO_CWM_LVL_1 Question 52

Options:

A.

Statements A & B are true

B.

Statements A & C are true

C.

Statements B & C are wrong

D.

Statements A, B and C are true.

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Questions 53

The minimum amount for secured lenders to take the benefit of SARFAESI is _______.

Options:

A.

Rs. 1 lakh

B.

Rs. 5 lakh

C.

Rs. 10 lakh

D.

Not specified

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Questions 54

GLO_CWM_LVL_1 Question 54

Which one of the above statements is/are incorrect?

Options:

A.

(i) only

B.

(ii) only

C.

Both

D.

None of the above

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Questions 55

Which of the following statements are true?

GLO_CWM_LVL_1 Question 55

Options:

A.

Only statement I is correct

B.

Only Statement II is correct

C.

Both statement, I and II are correct

D.

Both statement I and II are incorrect

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Questions 56

Calculate current liability from the following information.

Current ratio is 1.5 and current assets are worth Rs.250

Options:

A.

375

B.

600

C.

166.67

D.

200

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Questions 57

An investor buys 200 units of a Mutual Fund scheme having a reinvestment option at Rs.10.5 on Jan 6, 2011. On June 30, 2011 scheme declares a dividend @10%. The ex-dividend N.A.V. was Rs.10.25. On March12, 2012 the fund N.A.V was Rs.12.25. Calculate CAGR?

Options:

A.

23.45%

B.

27.11%

C.

23.29%

D.

23.99%

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Questions 58

Sunil insured the building of his house for a sum of Rs.500000 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.1000000. The insurer will pay to Sunil:

Options:

A.

Rs.1000000

B.

Rs.250000

C.

Rs.500000

D.

Nil

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Questions 59

Which of the following statement is false?

GLO_CWM_LVL_1 Question 59

Options:

A.

Statement I is wrong

B.

Statement II is wrong

C.

Statement III is wrong

D.

Statement IV is wrong

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Questions 60

Mr.Dinesh is transferred to Delhi and is paid a shifting allowance of Rs.20000 by his employers out of which he spends Rs.18000 for shifting his family and personal effects. Which of the following is true?

Options:

A.

The whole of Rs.20,000 is exempt as a casual receipt

B.

The whole of Rs.20,000 is exempt under section 10(14)

C.

Rs.18,000 is exempt from tax under Section 10(14)

D.

Rs.18,000 is exempt as a casual receipt

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Questions 61

Which of the following statement is/are correct?

GLO_CWM_LVL_1 Question 61

Options:

A.

(i) only

B.

(ii) only

C.

Both (i) & (ii) are correct

D.

Both (i) & (ii) are incorrect

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Questions 62

Investment made in a stock 2 years ago is Rs. 175; the current value is Rs. 250. The dividend received at the end of 2nd year is Rs. 40. What is the CAGR?

Options:

A.

28.72%

B.

40%

C.

118%

D.

140%

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Questions 63

Which of the items would affect the net worth of the client?

GLO_CWM_LVL_1 Question 63

Options:

A.

III & IV only

B.

II & III only

C.

I, II, III only

D.

All of the above

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Questions 64

The following parameters are available for two mutual funds:

GLO_CWM_LVL_1 Question 64

Calculate Sharpe measure?

Options:

A.

0.10, 0.33

B.

0.8, 0.33

C.

0.22, 0.17

D.

0.18, 0.25

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Questions 65

Which of the following is true of Reverse Repo rate?

Options:

A.

Determined by free market forces

B.

Lower than repo rate

C.

benchmark for long term rates

D.

Part of funding cost for commercial banks

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Questions 66

Minimum number of investors in a scheme should be

Options:

A.

10

B.

15

C.

20

D.

25

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Questions 67

Within how many days prospectus or statement in lieu of prospectus should file with ROC

Options:

A.

30

B.

40

C.

20

D.

50

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Questions 68

What is burn Arbun?

Options:

A.

Loan of a particular piece of property

B.

Credit sale

C.

Down payment

D.

Deposits in trust

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Questions 69

Which of the following is controlled under monetary policy?

Options:

A.

Interest Rates

B.

Money Supply

C.

Inflation

D.

All of the above

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Questions 70

The data gathering is done by which of the following instruments given below?

Options:

A.

Questionnaire

B.

Interview

C.

Client records

D.

All of the above

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Questions 71

When Government spends more than what it earns, the difference is called...............

Options:

A.

Monetary Deficit

B.

Revenue Deficit

C.

Budget Deficit

D.

Revenue Receipt

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Questions 72

In addition to the contribution employer has to pay ______________% of wages as administration charges.

Options:

A.

0.17%

B.

0.18%

C.

0.10%

D.

None of these

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Questions 73

Difference between coparceners & member is that coparcener can demand partition of an HUF

Options:

A.

TRUE

B.

FALSE

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Questions 74

Jensen measure of a portfolio reflects

Options:

A.

Excess return over market portfolio

B.

Excess return over fair return as per CAPM

C.

Excess return over fair return as per APT

D.

Excess return over risk free return

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Questions 75

The presence of _____ in financial markets leads to adverse selection and moral hazard problems that interfere with the efficient functioning of financial markets.

Options:

A.

non-collateralized risk

B.

free-riding

C.

asymmetric information

D.

costly state verification

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Questions 76

What is ‘Riba’?

Options:

A.

Bills of exchange

B.

Surplus value without counterpart

C.

Capital accumulation

D.

Promissory notes

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Questions 77

The client behavior is influenced by which of following motivators in order to regulate his needs and wants?

Options:

A.

Psychological needs

B.

Social Needs

C.

Self fulfillment needs

D.

All of the above

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Questions 78

Which of the following statement is true?

Options:

A.

Ordinary share capital is a high-risk high reward source of finance for investors

B.

Companies can freely price their share issues.

C.

Book building is a process to elicit demand for and price of, securities

D.

All of the above

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Questions 79

Hybrid deposit is a type of

Options:

A.

Demand Deposit

B.

Term Deposit

C.

Mutual Fund

D.

None of the above

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Questions 80

Customers with poor credit history due to defaulting payments is ………………

Options:

A.

Sub prime borrower

B.

Prime rate mortgage

C.

Reverse mortgage

D.

Balloon payment mortgage

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Questions 81

If any expenditure is incurred by an Indian company wholly and exclusively for the purpose of amalgamation or demerger, the said expenditure is

Options:

A.

Not allowable as a deduction in computing profits and gains of business or profession

B.

Allowed as a deduction spread over five successive previous year beginning with the previous year in which the amalgamation or demerger takes place

C.

Not deductible but is eligible to be treated as an intangible asset in respect of which depreciation can be claimed

D.

Fully deductible as revenue expenditure in the year in which it is incurred.

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Questions 82

Which of the following statement is true?

Options:

A.

The two key financial intermediaries is to convert money market and capital market

B.

Money market is a market for short-term funds having maturity of one year or less

C.

The capital market consists of new issue markets and the stock exchange

D.

All of the above

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Questions 83

Document required to open a bank account is/are

Options:

A.

Identity Proof

B.

Residence Proof

C.

Photographs

D.

All of the above

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Questions 84

Current ratio is

Options:

A.

Current Cash / Current liabilities

B.

Current Assets / Current liabilities

C.

Current Liabilities / Current assets

D.

None of the above

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Questions 85

Often burdened with loan and generally both of the spouses work to earn their living. Under which category this type of family falls?

Options:

A.

Mature family

B.

Young family

C.

Empty Nesters

D.

None of the above

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Questions 86

Deduction under section 80QQB is allowed in respect of royalty income to:

Options:

A.

an individual who is an author of a book

B.

an individual who is resident in India and who is an author of a book

C.

an individual who is resident in India who is either an author of a book or a joint author of the book

D.

None of These

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Questions 87

"Which of the following can benefit from SARFAESI, 2002?"

Options:

A.

Banks

B.

Financial Institutions

C.

Both of the above

D.

None of the above

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Questions 88

Long term interest rate is equal to .......

Options:

A.

Real rate of interest + expected average inflation rate.

B.

Annual return + expected inflation rate.

C.

Average Returns + expected inflation rate.

D.

None of the above

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Questions 89

Which of the following is not true?

GLO_CWM_LVL_1 Question 89

Options:

A.

Only II

B.

Only I and II

C.

Only III

D.

None of these

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Questions 90

Which principle apply to life insurance contracts?

Options:

A.

Principal of Indemnity

B.

Doctrine of subrogation

C.

Doctrine of contribution

D.

None of the above

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Questions 91

The provision of fraudulent transfer is given in-

Options:

A.

Section 49 of the Transfer of Property Act, 1882

B.

Section 50 of the Transfer of Property Act, 1882

C.

Section 51 of the Transfer of Property Act, 1882

D.

Section 53 of the Transfer of Property Act, 1882

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Questions 92

A bank normally does not have to deal with an issue related to

Options:

A.

Payments and settlement system

B.

Contractual rights of creditors

C.

Intellectual property rights

D.

Case of insolvency

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Questions 93

Where one can open an account under the Public Provident Fund Scheme, 1968?

Options:

A.

In any branch of the State Bank of India.

B.

In any branch of the State Bank of India, and its subsidiaries.

C.

In any branch of the State Bank of India, and its subsidiaries, or in any Head Post Office or any selected sub post office.

D.

In any branch of the State Bank Of India, and its subsidiaries, or in any Head Post Office or any selected sub post office or in any of the nationalized banks.

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Questions 94

Preparation of budget of a client is like doing _______________ for a patient

Options:

A.

A Lipid Profile

B.

ECG

C.

X-Ray

D.

All of the above

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Questions 95

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

Options:

A.

Subrogation

B.

Contribution

C.

Co-insurance

D.

Indemnity

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Questions 96

What is Market Risk Premium?

Options:

A.

It is premium available in the market.

B.

It is the market risk measured by premium paid

C.

It is the difference between the average return on the portfolio and average risk free rate.

D.

Any of these

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Questions 97

The operatives Guidelines for Banks on Mobile Transactions in India were issued

Options:

A.

2008

B.

2009

C.

2010

D.

2011

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Questions 98

If an investment has a correlation coefficient of 0.80 with the market, which of the following performance measures is the best measure of risks?

Options:

A.

Jensen.

B.

Sharpe & Jensen.

C.

Sharpe.

D.

Treynor.

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Questions 99

Higher interest based on age is offered in which of the following accounts?

Options:

A.

Savings

B.

Term

C.

Current

D.

All of the above

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Questions 100

What is ‘Gharar’

Options:

A.

Ownership of goods

B.

Speculative transactions

C.

Consumer Needs

D.

Islamic banking

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Questions 101

A situation in which an owner of more than 50% of voting shares can elect the entire board of directors is known as

Options:

A.

Distributed voting

B.

Cumulative voting

C.

Straight voting

D.

Discretionary voting

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Questions 102

A testamentary trust is affected after the

Options:

A.

Death of the owner

B.

Death of the trustee

C.

Retirement of the owner

D.

Beneficiary attiring age of 18

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Questions 103

Which of the following is not true in respect of the conditions essential for taxing income under the head income from House Property?

Options:

A.

The property must consist of buildings and land appurtenant there to

B.

The assessed may or may not be the owner of such house property

C.

The property may be used for any purpose, but it should not be used by the owner for the purpose of any business or profession carried on him, the profits of which are chargeable to tax.

D.

None of the above

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Questions 104

Gift received is not taxable in hands of

Options:

A.

Individual

B.

HUF

C.

Society

D.

None of the above

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Questions 105

Share reflects a contribution in ownership of the company

Options:

A.

TRUE

B.

FALSE

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Questions 106

Employees Provident Fund is applicable to firms employing over _______________ employees

Options:

A.

20

B.

15

C.

10

D.

25

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Questions 107

An inverted yield curve implies that:

Options:

A.

Long-term interest rates are lower than short-term interest rates.

B.

Long-term interest rates are higher than short-term interest rates.

C.

Long-term interest rates are same as short-term interest rates.

D.

Intermediate term interest rates are higher than either short-or long-term interest rates.

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Questions 108

Deflation is__________

Options:

A.

Good for developed countries

B.

A Boon

C.

Good for developing economics

D.

A phenomenon which has a number of negative aspects.

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Questions 109

In case of self occupied property, higher deduction u/s24(b) for interest on loan for construction can be claimed if borrowing was made

Options:

A.

After 1/4/99

B.

on or after 1/4/99

C.

Before 1/4/99

D.

On or after 1/9/2004

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Questions 110

What would be the tax liability if tea and snacks are provided in the office after office hours?

Options:

A.

Nil

B.

Nil, if it is uptoRs. 50 per meal

C.

Actual amount spent by the employer

D.

Nil, if it is upto Rs. 75 per meal

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Questions 111

Deduction u/s 80U in case of permanent physical disability (including blindness) allowed to:

Options:

A.

an individual who is citizen of India

B.

an individual who is resident in India

C.

any individual assessed

D.

None of These

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Questions 112

Accumulation, preservation and distribution are stages of

Options:

A.

Financial Life cycle

B.

Human Life Cycle

C.

Human Life Value

D.

All of the above

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Questions 113

Minimum number of members in case of private company is

Options:

A.

1

B.

2

C.

3

D.

5

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Questions 114

Who would get the first preference when the property of a deceased person is to be distributed

Options:

A.

Government

B.

Charitable societies

C.

Agnates

D.

Cognates

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Questions 115

Family Offices provide _____________

Options:

A.

Specialist advice and planning

B.

Investment Management

C.

Administration

D.

All of the above

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Questions 116

Which of the following statement is not true?

Options:

A.

While the primary market deals in new securities, the stock market is a market for old securities

B.

The price of new issues are influenced, to a market extent, by the price movements in the stock market

C.

Organization, underwriting and distribution are three services provided by the new issue market.

D.

None of the above

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Questions 117

Performance measurement by benchmarking normally refers to comparing performance of a fund to

Options:

A.

The performance achieved by comparable investment funds

B.

The results of key economic factors

C.

The results achieved by key investment indexes

D.

The results achieved by recognized superannuation funds

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Questions 118

_______________ and _______________ mandates are two kinds of service level contracts

Options:

A.

Advisory, Discretionary

B.

Discretionary, Managed

C.

Advisory, Managed

D.

None of the above

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Questions 119

Which of the following is not a part of scheduled banking structure in India?

Options:

A.

Money Lenders

B.

Public Sector Banks

C.

Private Sector Banks

D.

Regional Rural Banks

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Questions 120

Investment in FCNR may be made through ________.

Options:

A.

Remittance from abroad

B.

Transfer from NRE

C.

Either of the above

D.

Both of the above

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Questions 121

A Bank is under a statutory obligations to honor its consumer’s Cheque vide

Options:

A.

Section 10 of banking regulation act 1949

B.

Section 3 of the RBI act 1934

C.

Section 31 in the Negotiable Instruments Act, 1881

D.

All of the above

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Questions 122

Which of the following definitions of forms of Money are correct?

GLO_CWM_LVL_1 Question 122

Options:

A.

(a) and (b)

B.

(b) and (c)

C.

(a) (b) and (c)

D.

none of the above

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Questions 123

A review of portfolio should be done when

Options:

A.

One witnesses a change in micro level factors

B.

One witnesses a change in macro level factors

C.

One witnesses new products floating in the market

D.

All of the above

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Questions 124

The holding period return on a stock is equal to __________.

Options:

A.

The capital gain yield over the period plus the inflation rate

B.

The capital gain yield over the period plus the dividend yield

C.

The current yield plus the dividend yield

D.

The dividend yield plus the risk premium

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Questions 125

Wealth Conservation is _____________

Options:

A.

Ways to maximize tax efficiency of current assets and cash flows while achieving capital growth and preservation goals

B.

Using insurance to ensure wealth is protected

C.

Legally structuring the future disposition of current assets to minimize the benefits to chosen beneficiaries

D.

None of the above

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Questions 126

A fraud is discovered with respect to an loan that has turned NPA. When is the earliest that it can be treated as a doubtful asset?

Options:

A.

Immediately

B.

Has remained sub-standard for upto 2 quarters

C.

Has remained NPA for upto 1 quarter

D.

Has remained NPA for upto 1 year

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Questions 127

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

Options:

A.

Aleatory contracts

B.

Conditional contract

C.

Personal contract

D.

Unilateral contract

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Questions 128

In case of yearly, half yearly or quarterly premium payments …………… days of grace.

Options:

A.

10 Days

B.

15 Days

C.

20 Days

D.

30 Days

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Questions 129

The holding period return on a stock was 30%. Its ending price was Rs.26 and its cash dividend was Rs.1.50. Its beginning price must have been __________.

Options:

A.

Rs.20.00

B.

Rs.21.15

C.

Rs.86.67

D.

Rs. 91.67

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Questions 130

What is the exemption criteria U/S 10(10) (ii) of the IT Act, 1961 for any gratuity received by a seasonal employee?

Options:

A.

Exemption limit is least of there:

(i) 7 day’s wages (calculated as 26 working days in a month) based on last drawn salary for every number of seasons worked,

(ii) Rs. 3,50,000/-,

(iii) Actual gratuity received

B.

Exemption limit is least of three:

(i) 7 day’s wages based on last drawn salary for every number of seasons worked,

(ii) Rs. 3,00,000/-,

(iii) Actual gratuity received

C.

Exemption limit is least of three:

(i) 15 day’s wages based on last drawn salary for every completed year

(ii) Rs. 3,50,000/-,

(iii) Actual gratuity received

D.

Exemption limit is least of three:

(i) 15 day’s wages based on last drawn salary for every completed year

(ii) Rs. 4,00,000/-,

(iii) Actual gratuity received

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Questions 131

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. Adhikari for the assessment year 2007-08 shall be:

Options:

A.

Rs. 3,60,000

B.

Rs. 4,80,000

C.

Rs. 2,40,000

D.

Rs. 3,80,000

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Questions 132

Which of the following is/are the necessary contents of a will?

GLO_CWM_LVL_1 Question 132

Options:

A.

I ,II and III

B.

I, III and IV

C.

I, II and IV

D.

All of these

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Questions 133

A Family consists of karta, his wife four sons and their wires and children and its income is Rs. 1000000 if by family arrangement income yield property is settled on karta his wife and sons & daughter in law than tax liability would be

Options:

A.

Nil

B.

100000

C.

Calculated as per income tax Act 1961

D.

None of the above

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Questions 134

Purpose of budget is ____________

Options:

A.

Spend money wisely

B.

Reach financial goals

C.

Prepare for financial emergencies

D.

All of the above

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Questions 135

Ranbir deposits Rs. 80000 as a lump sum amount in a immediate annuity. He will receive annuity on a monthly basis for next one year. Determine the monthly amount he is entitled to receive. The rate of interest is 15%

Options:

A.

Rs 7221

B.

Rs 7122

C.

Rs 7321

D.

Rs 7425

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Questions 136

Case: The returns of 2 shares are as follows

GLO_CWM_LVL_1 Question 136

Calculate the covariance of returns.

Options:

A.

220.32

B.

–420.11

C.

162.08

D.

270.36

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Questions 137

Sunil submits you the following particulars:

GLO_CWM_LVL_1 Question 137

Options:

A.

Sunil deposited a sum of Rs. 3, 50,000/- on 25-06-2010 in the capital gain scheme as he intends to buy an agricultural land later. Out of the sale proceeds of gold, he has invested Rs. 1, 60,000/- on the purchase of residential house property on 13-05-2010. The shares were sold through a recognized stock exchange.

Compute taxable gain for the Assessment Year 2012-13. [CII- 12-13: 852, 11-12: 785, 10-11:711, 83-84: 116]

B.

LTCG-23520/-,STCG:NIL

C.

LTCG-NIL,STCG:20000/-

D.

LTCG-12586/-,STCG:20000/-

E.

LTCG-5520/-,STCG:NIL

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Questions 138

Manish has two house properties. Both are self occupied. The annual value of:

Options:

A.

Both the house is NIL

B.

One house shall be NIL

C.

No house shall be NIL

D.

Option A with certain condition

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Questions 139

There are two parties to Power of Attorney, namely, Donor and Donee.

GLO_CWM_LVL_1 Question 139

Options:

A.

Both (i) & (ii) are correct

B.

Only i is correct

C.

Only ii is correct

D.

Both (i) & (ii) are incorrect

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Questions 140

Broadly, world over the minimum investable assets for MULTI FAMILY OFFICE SEGMENT is :

Options:

A.

USD 20,000,000

B.

USD 50,000,000

C.

USD 10,000,000

D.

USD 30,000,000

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Questions 141

Ms. Shweta wants to achieve the goal of higher education of her daughter after 15 years. She estimates that the funds required would be 30 lacs at then costs. She wants to invest monthly for this goal. You as a Wealth Manager suggest an asset allocation of 80% in Equity and 20% in Debt for 14 years and shifting the entire amount to liquid funds in the last year where the expected returns would be 6% p.a. If the returns in equity and debt funds are 14% and 8.50% respectively calculate the amount that needs to be invested in Equity and Debt Each Month.

Options:

A.

Rs. 1269 Equity & Rs. 5077 Debt

B.

Rs. 5077 Equity & Rs. 1269 Debt

C.

Rs. 6676 Equity & Rs. 1602 Debt

D.

Rs. 7500 Equity & Rs. 1800 Debt

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Questions 142

You bought a stock for Rs. 20 and sold it for Rs. 59.72 after six years. What was the annual rate of return?

Options:

A.

18%

B.

16%

C.

21%

D.

20%

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Questions 143

Movement through phases of the business cycle is initiated by shifts in aggregate demand which create fluctuations in GDP. Which combination of the following statement would be the most significant contributor to the upward shift in aggregate demand?

GLO_CWM_LVL_1 Question 143

Options:

A.

(1), (2), (3) Only

B.

(1) and (3) Only

C.

(3) and (4) Only

D.

(2) and (4) Only

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Questions 144

An employee joined in the year 2000 in a sugar mill. After working all the years as a seasonal employee up to the year 2011. He retires with the following monthly salary Basic Salary 2000 / DA 1000/ HRA 500. How much gratuity is payable to him?

Options:

A.

Rs 11308

B.

Rs 9692

C.

Rs 8885

D.

Rs 20769

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Questions 145

Mr Ram aged 53 years has put in 21 years of service in a PSU opts for a voluntary retirement under the company scheme. He has 5 years and 3 months of service left and his last drawn salary is Rs 18,000. He received Rs 10,00,000 as compensation. What would be the taxable part of this receipt?

Options:

A.

Rs 5,00,000

B.

Rs 6,00,000

C.

Rs 1,34,000

D.

NIL

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Questions 146

Vinod opened the PPF account on 19/11/2000, Calculate the amount he can avail as the first loan facility from the details below?

GLO_CWM_LVL_1 Question 146

Options:

A.

Rs 17967

B.

Rs 18103

C.

Rs 19800

D.

Rs 17500

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Questions 147

Dinesh has opened his PPF account on 19/11/1999, Calculate the amount he can avail as the first withdrawal facility from the details below?

GLO_CWM_LVL_1 Question 147

Options:

A.

Rs 274555.

B.

Rs 120536

C.

Rs 125897

D.

Rs 115745

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Questions 148

One should accept a project if NPV is

Options:

A.

Positive

B.

0

C.

Negative

D.

None of the above

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Questions 149

Calculate the Net worth of Mr. Surinder Nath with the following financial details as:

GLO_CWM_LVL_1 Question 149

Options:

A.

Rs 91.3 lakh

B.

Rs 90.7 lakh

C.

Rs 90.3 lakh

D.

Rs 92.5 lakh

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Questions 150

Which of the following is/are the desirable contents of a will?

GLO_CWM_LVL_1 Question 150

Options:

A.

I ,II and III

B.

II , III and IV

C.

I, III and IV

D.

All of these

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Questions 151

A borrower defaults on a secured loan of Rs. 50,000. The underlying security is worth Rs. 60,000. Which of the following is true? "

Options:

A.

"Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower."

B.

Bank cannot sell the underlying security because its value is higher than loan.

C.

"Bank can retain the entire Rs. 60,000"

D.

"The excess of Rs. 10,000 has to be shared equally between the bank and the borrower."

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Questions 152

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

Options:

A.

Rs. 100

B.

Rs. 75

C.

Rs. 50

D.

Rs. 25

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Questions 153

CAMELS framework was first used in _______.

Options:

A.

UK

B.

Canada

C.

India

D.

US

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Questions 154

Mukul purchased a flat on 1-4-1996 for Rs. 10,00,000/-. He sells the same flat on 1-10-2006 for Rs. 25,00,000/-. Please calculate the Indexed Cost of Acquisition on which capital gain would be calculated. (The CII of year 1995-96 is 281, for year 1996-97 is 305, for year 2005-06 is 497 and for year 2006-07 is 519).

Options:

A.

17,85,129

B.

17,26,175

C.

17,01,639

D.

17,45,508

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Questions 155

The shares of Alpha were bought on Jan 1 for Rs 110/-. During the year Alpha paid a dividend of Rs 2/- per share. At the end of the year, share of Alpha was sold for Rs 115/- What is the total return on Alpha?

Options:

A.

4.36%

B.

6.36%

C.

7%

D.

8.42%

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Questions 156

GLO_CWM_LVL_1 Question 156

(CII for 1992-1993=223 and CII for 2011-2012 =785)

Calculate the LTCG in both cases?

Options:

A.

12,00,000 and 1,43,946

B.

10,80,000 and 1,45,850

C.

11,00,000 and 10,80,000

D.

10,00,000 and 10,12,946

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Questions 157

A trustee commuting a breach of trust not table to pay interest except

GLO_CWM_LVL_1 Question 157

Options:

A.

(i) & (ii)

B.

(ii) & (iii)

C.

Only (ii)

D.

All of the above

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Questions 158

In case of a defined benefit plan where the benefit payable is based on the terminal salary, an increase in of 10% of the wages of the employees would increase the contribution to be made by the employer for the benefit by

Options:

A.

10% of the earlier level of contribution

B.

More than 10% of the earlier level of contribution

C.

Less than 10% of the earlier level of contribution

D.

Can be any of the above

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Exam Code: GLO_CWM_LVL_1
Exam Name: Chartered Wealth Manager (CWM) Global Examination
Last Update: Mar 29, 2024
Questions: 1057

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