Q: 1
Section A (1 Mark)
Comprehensive Wealth Management addresses
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Free CWM_LEVEL_2 Practice Test Questions and Answers (2026) | Cert Empire Practice Questions
Free preview: 20 questions.
AAFM CWM LEVEL 2
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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Q: 11
Section A (1 Mark)
Which of the following services are related to the field of Real Estate?
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Q: 12
Section B (2 Mark)
According to the efficient markets view, value stocks earn higher expected return than growth stocks
because:
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Q: 13
Section B (2 Mark)
If after the partition of an HUF 2 members became partners in 3 firms on behalf of their respective
HUFs and they also become partners in a fourth firm. The funds were obtained by means of loans
from the other 3 firms. The share incomes of the members from the fourth firm were assessable as
their individual income only.
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Q: 14
Section A (1 Mark)
Debt investments in real estate, such as mortgages or deeds of trust, are called income property
investments.
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Q: 15
Section A (1 Mark)
The profits of a controlled foreign company which are apportioned to a UK company are charged to
corporation tax at the UK company's average rate of tax.
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Q: 16
Section A (1 Mark)
H Ltd, a UK resident company, owns 100% of the share capital of two other UK companies and 80% of
the share capital of T SA, a company resident in Italy.H Ltd has three associated companies.
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Q: 17
Section B (2 Mark)
In the year to 31 March 2012, a UK resident company made a UK trading profit of £800,000 and
received net overseas income of £26,000 (net of 20% withholding tax). These were the company's
only sources of income. The company also paid a qualifying charitable donation of £5,000.
For double tax relief purposes, the charitable donation will be allocated as a deduction from the
company's overseas income. True or False?
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Q: 18
Section A (1 Mark)
The inventory turnover ratio and days sales outstanding (DSO) are two ratios that can be used to
assess how effectively the firm is managing its assets in consideration of current and projected
operating levels.
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Q: 19
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?
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Q: 20
Section A (1 Mark)
The cost which the Wealth management firms would generally not be able to fully absorb the
revenue shock in the near future is known as Sticky Cost.
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Question 1 of 20
