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

When Government adjusts its economic policy through the Central Budget, it is exercising_________

Bond price is inversely related to yields

Hedging with commodity futures

Rapid accumulation stage suggests that the net worth is ________

In case of non-resident, who is carrying on shipping business, his Indian income shall be presumed to be:

Foreign currency borrowings raised by Indian corporate from outside India are called

Dividends received from investment would be classified as:

Wills which are not valid in India except in case of privileged wills or in case of Mahomadans are called as:

Which of the following term means joint venture in Islamic Banking terminology?

BIS handles each of the following, except ________.

At the beginning of 2006 you have invested Rs 2000 in 40 Shares of ABC Ltd. During the year you received dividends @ 7 per share. At the end of 2006 you expect to sell share for Rs. 59. Compute return?

The arbitrage pricing theory (APT) differs from the single-factor capital asset pricing model (CAPM) because the APT:

Surender the driver causes injuries to a pedestrian by rash driving of car. The injured victim had to spend Rs.1000 in treating his injuries. Surender ‘s act has created liabilities under

What is the minimum paid up capital needed to form a public limited company?

The following is capital receipt:

What do you mean by deceased to have died intestate?

A UHNW segment client has investible assets worth of

Banking Ombudsman Scheme is:

Money Laundering:

Income from which trust is added to the beneficiary’s taxable income?

Which of the following is not a characteristic of defined benefit plan?

Family Offices provide _____________

Risk can be

Which one of the following is correct?

According to the Gordon model, the discount rate used by the investors exhibits what type of relationship with the retention rate?

If any person has escaped assessment for any assessment year in respect of wealth tax no action shall be taken after the expiry of………

In marine insurance claims, insurable interest must shown to exist at the time of

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.

Savitri is 30 years old. She saves Rs. 14,000/- p.a. (year end) in FD 8.75% p.a. compounded annually until she retires at age 58. Her life expectancy is 80 years. What would be her corpus at the time of retirement? What is the fixed amount she can withdraw at the beginning of each year, until age 80, in case she wishes to exhaust the whole corpus? Inflation is 5%.

Mr. Ajay and Vijay both are 30 years old. And both are 30 years away from their retirements. Ajay saves Rs. 10,000/- p.a. for 8 years and stops. Vijay starts investing after Ajay stops and saves Rs. 10,000/- p.a. till he retires. Their savings earn 10% p.a. compounded yearly. At the retirement what is true?

Sudesh Haldia is employed at Delhi as Store Manager in one of the Retail Companies. The particulars of his salary for the previous year 2006-07 are as under:

The actual rent paid by him is Rs. 2,000 p.m. for an accommodation at Noida till 31-12-2006.From 1-1-2007 the rent was increased to Rs. 4000 p.m. Compute the taxable HRA?

Ram purchased a house in Mumbai in March 2000 for Rs.3,50,000. In April,2009 he entered into an agreement to sell the property to Shyam for a consideration of Rs.1975000 and received earnest money of Rs.500000. 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.500000 was forfeited by Ram. Subsequently Ram sold the house in June,2009 for Rs.2130000. He paid 2% brokerage on sale of the house. Calculate the capital gains chargeable to tax for the assessment year 2010-11. [CII-12-13: 852,11-12: 785,10-11:711,09-00:389]

You have a choice between 2 mutually exclusive investments. If you require a 15% return, which investment should you choose?

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:

Amit an industrialist wants to buy a flat in a housing society presently costing Rs. 35,00,000/- after 6 years. The cost of the house is expected to increase by 15% pea for the first 3 years and by 10% in the remaining years. Amit wants to start a SIP with monthly contributions in Birla Front Line Equity Mutual Fund to pay for the down payment of the house which would be 25% of the house value at that time. You as a CWM expect that the fund would give ROI of 14% p.a. compounded monthly in the next 10 years. Please advise Amit the monthly SIP amount starting at the beginning of every month for the next 6 years to fulfill his goal of buying the Flat he desires.

Which assets are totally except from wealth tax?

The following parameters are available for four mutual funds:

Mr.Rajesh ,35 years old sole business consultant of “Oriental Décor Import”California , USA. He arranges Indian Handicraft Products in India as per “Oriental Décor Import” orders. He earns 5% commission on goods purchased by “Oriental Décor Import”. The “Oriental Décor Import” has invited him in USA for inauguration of their 21 chain stores In USA and Europe and he has to expect to say long for providing Indian Handicraft Product Training to all staffs of the Company working in different chain stores. As a Chartered Wealth Manager he comes to you to plan his journey in such a manner so that he can get maximum tax benefits in the assessment Year 2010–11 from the residential status point of view. In the year 2008–09 was present in India only 80 days. What is the latest date when he can afford to leave India to get maximum tax benefits in the said assessment year?

From the following information of assets assets and liabilities, the taxable wealth for:

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 _________.

Mentioned below is the information regarding three mutual funds - Reliance, TATA, SBI and the Market Index.

The Risk free return rate is 5%. Calculate the Jensen Measure of RELIANCE, TATA, & SBI Fund.

"During the PY 2009-10 a Poonawala Charitable Trust earned an income of Rs. 7 lakh out of which Rs.5 lakh was received during the PY 2009-10 and the balance Rs. 2 lakh was received during the PY 2011-2012.In order to claim full exemption of Rs. 7 lakh in the PY 2009-10:

Ankur Kalra is 33 years old finance professional. The house hold expenditure of Mr. Kalra is 20,000/- p.m. to maintain his current living standard. He assumes that his living standard will increase 1.5% annually until his retirement at 60. His life expectancy is 70 years. At retirement he needs 75% of his last year’s expenses. Inflation rate for the next 45 years is expected to be 4% p.a.

Calculate how much would Mr. Kalra require in the first year after his retirement, and how much he has to save at end of every year to accumulate this corpus, if the return on investment is 7% p.a.?

Vinod Khanna, aged 27 years, is having a policy of Rs. 15 Lac sum assured and is paying premium of Rs. 14,800/- . The cash surrender value of this policy is at the end of previous year was Rs. 35,000. It is estimated that by this year end, the cash surrender value of this policy would be Rs. 40,000/-. Bonus under this old policy is Rs. 10,000/-.

There is another term insurance policy of Rs. 15 Lac Sum Assured is available to Vinod at Rs. 4,200/- per annum. If rate of interest is 8 % then first calculate the CPT of existing and new policy respectively and then advise Vinod if it is better to continue this policy or to discontinue it?

Compute Gross Total income and amount of loss allowed to be carried forward to next year:

Mr. Amit Jain has bought a house today which cost him Rs. 50 lacs by taking a loan of 30lacs for 15 years at 11% per annum compounded monthly. He currently has 10 lacs of financial assets and plans to save Rs. 3.25 lacs every year at the beginning of the year for the next 5 years. All his investments are expected to grow at a ROI of 15%per annum compounded quarterly. What will be the net worth of Mr. Amit after 5 years if the value of the house after 5 years is expected to be 75 lacs.?

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.?

Given the following information what is the expected return on the portfolio of two securities where both are held in equal weights?

Find out the taxable value of perquisite from the following particulars in case of an employee to whom the following assets held by the company were sold on 1.8.2012.

The assets were put to use by the company from the day they were purchased.

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

The Portfolio consists of two securities, X and Y in the ratio of 70:30. Given that

and covariance between them is 16%, what is the portfolio risk?

Consider the following information for three mutual funds

Risk free return is 7%. Calculate Treynor measure?

Pushkar completed the construction of a house property on 14.8.2008 with borrowed capital of Rs.800000 @ 12%. The loan was taken on 1.4.2006 and is still outstanding. The house was used for his own residence during the entire FY 10-11. Deduction U/S 24(B) for interest on borrowed capital for FY shall be

Azhar aged 30 is a disciplined investor. He has started depositing Rs. 25,000 every year in an account that pays a return of 9% every year. He plans to increase his contribution by Rs. 5000 every year till his age 50. Calculate the amount he would be having in his account at this age.?

Mr. Reddy is 58 years old and has just retired from his company,and have a total retirement benefits of Rs. 29,37,500/-. His life expectancy is 75 years. He has a dream to take a world-trip after 2 years from now with an estimated current price of Rs. 4,00,000/-. He has finalized a flat of Rs. 15,00,000/- for immediate purchase. Calculate how long his corpus will run if his post retirement living expenses in the beginning of every year is Rs. 1,35,000/- considering inflation @ 4% and rate of return is 6% p.a.?

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% ?

Find the Human Life Value for a person who is 30 years old.He wishes to retire at age of 60. Interest rate is expected to be 12%. He spends Rs. 60000 on his personal clothing and Rs. 40,000 on his conveyance. He has paid Rs. 65000 as tax for the year. His gross annual income is Rs. 5 lakhs.

Vikash owns a piece of land situated in Delhi ( Date of acquisition : March 1, 1983, Cost of acquisition Rs. 20,000/- value adopted by Stamp duty authority at the time of purchase Rs. 45,000/-) On March 30, 2012 the piece of land is transferred for 4 lakh. Find out the capital gains chargeable to tax if the value adopted by the Stamp duty authority is 5.60 lakh. And X does not challenges it under the Stamp Act. However, he claims before the Assessing Officer that Rs. 5.60 lakh is more than the fair market value of the land. The assessing Officer refers it to the valuation Officer who determines Rs. 5.25 lakh as fair market value. [CII-12-13: 852,11-12: 785,10-11:711]

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?

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

One should accept a project if NPV is

Once the child reaches the vesting age, i.e. the age when the life assurance commences, he or she can claim cash option i.e. he can opt to receive the premium amount paid so far under the policy in case the policy is discontinued. This is possible under:

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

Mrs. Sharma, a 40-year-old widow, has an 8-year-old son. Her current savings are not adequate to provide for her son’s post graduate studies, however she will be able to save for it by the time he finishes graduation i.e. when he is 20 years old. Mortality tables indicate that her life expectancy is another 30 years.

Which one of the following is true?

Spot Nifty is at 5000. One month Nifty call with strike price of Rs. 4800 is trading at Rs. 250 per call. An investor buys 100 Nifty calls. At expiry Nifty closes at 5500. Net profit / loss of the investor is Rs. ___.

If a preferred stock pays an annual Rs. 4.50 dividend, what should be the price of the stock if comparable yields are 10 percent? What would be the loss if yields rose to 12 percent?

You are considering investing Rs 1,500 at an interest rate of 5% compounded annually for 2 years or investing the Rs1,500 at 7% per year simple interest rate for 2 years. Which option is better?

Calculate the Paid up Value ( PV) under a policy with the following particulars

CAMELS framework was first used in _______.

Returns on a security held for 5 years by Praveen are:

Find the standard deviation of the security.

The beta of stock of Akhil Computers Ltd., is 1.5 and is currently in equilibrium. The required return on the stock is 19% and the expected return on the market is 15%. Suddenly due to a change in economic conditions, the expected return on the market increases to 17%. Other things remaining the same what would be new required rate of return on the stock?

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.

What is the minimum number of persons who must subscribe to the memorandum of association?

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

Fine in case of cheque bouncing can go up to _________.

If, C=Rs.240 million, I = Rs.20 million, G = Rs.90 million, X = Rs.50 million M = Rs.80 million Calculate the value of GDP?

Choose the amount of final tax liability of R for the assessment year 2007-08:

Contribution under a defined benefit plan

Suppose X and Y are Father and Son respectively ,so when Y was a minor X advanced Rs 10,000 to him.

After Y becoming major X obtains a bond for Rs 20000 ,which is much larger than the original amount due from Y,by using his parental influence.The contract stands voidable because the consent is caused by:

Any income chargeable under the based “Salaries” is exempt from tax under Section 10(6)(viii), if it is received by any non resident individual as remuneration for services rendered in connection with his employment in a foreign ship where his total stay in India does not exceed a period days in that previous year.

The share of a certain stock paid a dividend of Rs.10.00 last year. The dividend is expected to grow at a constant rate of 15 percent in the future. The required rate of return on this stock is considered to be 18 percent. How much should this stock sell for now? Assuming that the expected growth rate and required rate of return remain the same, at what price should the stock sell 4 years hence?

A maximum of _____% of the issue would be allotted to one single QIB

The returns on Stock A and Stock B have a correlation coefficient of –1. When the price of Stock A appreciates by 12%, how will Stock B’s price perform?

Which of the following are investment intermediaries?

Given the following data, which one of the options will be monthly premium installment?

Rebate for large sum assured

Upto Rs. 24,999/- No rebate

From Rs. 25,000/- to 49,999/- @ Re 1 per thousand SA

From Rs. 50,000 and above @ Rs. 2 per thousand SA

Vikrant Juneja gifted his house property to his wife in year 2007. Mrs. Juneja then lets out this house @ Rs. 5000 per month. The income from such house property will be taxable in the hands of:

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

Broker dealer model is more prevalent in

Rajiv buys a growth oriented non dividend paying share for Rs. 200 and 4 years later sells it for Rs. 350. The CAGR is____

Mahesh has invested Rs. 72,000/- @ 5% p.a. in a bank deposit. After 7 years ROI changes 5% p.a. computed half yearly. After further period of 3 years rate again changes to 6% p.a. compounded quarterly. What will he get after 15 years of commencement?

Rishi wants to purchase a car 5 years from now. His investments are presently worth Rs. 48,000/-. He puts them into an account today at a ROI of 10% per annum and he would be contributing Rs. 5,000/- from end of this month, every month for 5 years. What would be his accumulated savings in this account after end of 5 years?

If a stock GHI ltd pays an annual dividend of Rs. 5 and plans to follow this policy for ever, then what would be the ate of return that investor would realize given the current market price of stock is 100

Sameer owns the following portfolio.

What is Portfolio Beta?

Calculate age nearer birthday, last birthday and next birthday in case where date of proposal was 28-03-2007 and date of birth was 30-09-1969.

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

Which of the following statements in reference to REPO Rate is/are correct?

Ramesh living in Kolkata is a trustee for Brijesh living in Mumbai, Ramesh remits trust funds to Brijesh by bills drawn by a person of high creditworthiness in favor of the trustee as such and payable at Mumbai. The bills later got dishonored. Is Ramesh bound to make good the loss?

Under the Payment of Gratuity Act, 1972, where the employee employed in a seasonal establishment is deemed to be in continuous service for such period if he actually worked for not less than __________% of the number of days on which the such establishment was in operation during such period.

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

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?

Which of the following statement is/are correct?

Identify the placement techniques in the following statements:

Expenses are 10% of the gross (office) premium. Pure premium is Rs. 200. Calculate office premium.

You bought a stock for Rs. 28.29 that paid the following dividends

After the third year, you sold the stock for Rs. 35. What was the annual rate of return?

Which of the following statement is/are correct?

Minimum net-worth of an AMC should be ______

Under the Workmen Compensation Policy, when the employment injury results in death, the insurance company pays 40 % of the monthly wages of the deceased multiplied by the relevant factor or Rs. _________ whichever is more.

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?

Which one of the following statements is/are correct?

Which of the following statement is true?

The Third Party Administrator’s role mainly involves

A contract is said to be caused by coercion when it is obtained by:

The Motor Vehicle Insurance Policy has inbuilt cover for death/disability of driver/owner caused by accident during the use of the insured motor vehicle up to Rs. __________ in case of car/commercial vehicle and Rs. _________ in case of two wheelers.

Which of the following statements is/are False

Which of the following is a secondary identifier _______.

Basic Idea of retirement benefit plan is

A portfolio consists of 50% of investment ‘R’ that earned 10%, 25% of investment ‘S’ that earned 6% and 25% of investment ‘T’ that earned 9%. Compute the weighted average return?

When bondholder pays more than par value to acquire bond, then

Which of the following statements is/are not true?

Which of the following statement is true?

Money kept in current account normally earns

Which portion of his property can a muslim normally be guest according to muslim personal law?

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

A firm’s earnings decline because of a strike, this is an example of:

Deduction under section 80C shall be allowed:

Duration of National Savings Certificate is

Wealth Enhancement is _____________

If there is a loss under the head Income from House property, can it be adjusted against other income under any other Head?

ln which of the following conditions the lease can be terminated

What is the most essential characteristic to be in existence at the stage of establishing client relationship?

For a “single income family” priority is on

An HUF consisted of a father who is a widower his three sons and a daughter upon death of the father, what will be the share of his daughter?

Which of the following is false with respect to internal rate of return?

Income received in India in previous year is taxable in the hands of:

An insured becomes entitled for getting No Claim Bonus only at the renewal of a policy after the expiry of the full duration of _________ months.

During “Teen age years” life stage, typical asset allocation should be

Financial goals must be SMART. SMART stands for _________________

The organization which was established in year 1956 to provide various forms of financing without soverign guarantees, primarily to the private sector is:

What is ‘Gharar’

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

X’s stock declined by the same percentage as the NIFTY on Mad Monday in October 2008. X was the victim of what type of risk?

Minimum number of investors in a scheme should be

Under the Provisions of Transfer, of Property Act, the unborn child acquires vested interest-

The trust is empty at creation during life and will transfer the property into the trust at death

Garnishee order is issued by:

In Money laundering, a transaction involving cash used to buy high value goods,property or business assets is an example of which stage?

Which of the following is allowed as deduction from net annual value of a property?

Urban land means land situated in area not being more than ………………from local list of local authority as notification in official Gazette

Identify the stage in the money laundering process where funds are being constantly moved or re-characterised to conceal their origins.

This stage is known as:

Which one of the following Provisions of the Transfer of Property Act relates to ’usufructuary mortgage’

Investments that are difficult to convert to cash are said to have _________

According to the capital asset pricing model, the expected rate of return on any security is equal to __________.

All the following statements concerning systematic risk are correct EXCEPT

Which one of the following sections of the Transfer of Property Act, defines ’Notice’

Joint account with a resident is permitted in case of