AAFM CWM LEVEL 2
Q: 1
Section A (1 Mark)
Comprehensive Wealth Management addresses
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Q: 2
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
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Q: 3
Section A (1 Mark)
A European call option allows the buyer to
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Q: 4
Section C (4 Mark)
Your broker recommends that you purchase XYZ Inc. at Rs.60. The stock pays a Rs.2.40 dividend
which (like its per share earnings) is expected to grow annually at 8 percent. If you want to earn 12
percent on your funds, is this a good buy?
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Q: 5
Section B (2 Mark)
Equity stock of X ltd. is currently selling at Rs. 35/- per share. The dividend expected next year is Rs.
2/- per share and the investor’s required return in this stock is 15 % per annum. If the constant
Growth Model applies to X ltd. then calculate the Growth Rate.
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Q: 6
Section A (1 Mark)
In US which group is unlikely to support tax limitations?
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Q: 7
Section B (2 Mark)
Calculate the total maturity amount payable in a policy of Rs. 4,00,000/-, if the term of the policy was
17 years and bonus was Rs. 52 per thousand per annum and a final bonus of Rs. 125/- per thousand
was payable.
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Q: 8
Section C (4 Mark)
An investor purchased on margin Alpha Computer for Rs. 30/- a share. The stock's price subsequently
rose to Rs. 50/- a share at which time the investor sold the stock. If the margin requirement is 60
percent and the interest rate on borrowed funds was 7 percent, what would be the percentage
earned on the investor's funds (excluding commissions)? What would have been the return if the
investor had not bought the stock on margin?
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Q: 9
Section B (2 Mark)
Conventional theories presume that investors ____________ and behavioral finance presumes that
they ____________.
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Q: 10
Section B (2 Mark)
Which of the following Biases are exhibited by Independent Individualist?
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Question 1 of 10
