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CWM_LEVEL_2 Exam Dumps - AAFM Chartered Wealth Manager Questions and Answers

Question # 64

Section A (1 Mark)

According to Michael Porter, there are five determinants of competition. An example of _____ is when new entrants to an industry our pressure on prices and profits.

Options:

A.

Threat of Entry

B.

Rivalry between Existing Competitors

C.

Pressure from Substitute Products

D.

Bargaining power of Buyers

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Question # 65

Section B (2 Mark)

From the following data in respect to the property price, calculate the value of the property for your client Mr. Nitin Sharma, as per the capitalization rate.

Options:

A.

Rs. 7,50,000

B.

Rs. 7,70,000

C.

Rs. 7,07,500

D.

Rs. 7,04,545

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Question # 66

Section A (1 Mark)

The eligibility Criteria for Self Employed Professionals & Businessman for minimum age of the applicant in case of personal loan is:

Options:

A.

21 Years

B.

18 Years

C.

25 Years

D.

None of These

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Question # 67

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.

Options:

A.

11.23%

B.

12.05%

C.

9.28%

D.

10.23%

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Question # 68

Section A (1 Mark)

During “Financial Independence” life stage, typical asset allocation should be

Options:

A.

25% equities, rest in fixed income instruments

B.

50% equities, rest in fixed income instruments

C.

75% equities, rest in fixed income instruments

D.

100% equities

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Question # 69

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?

Options:

A.

$0.25 and $0.10

B.

$0.20 and $0.15

C.

$0.15 and $0.25

D.

$0.10 and $0.10

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Question # 70

Section A (1 Mark)

Hybrid plans are

Options:

A.

Combination of DB & ESOP plan

B.

Combination of DB & DC plan

C.

Combination of ESOP and Money purchase plan

D.

None of the above

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Question # 71

Section B (2 Mark)

Which of the following Biases are exhibited by Independent Individualist?

Options:

A.

I and II

B.

III and IV

C.

I and III

D.

All of the Above

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Question # 72

Section A (1 Mark)

Trust banks are ____________

Options:

A.

UK equivalent of traditional American private bank

B.

US equivalent of traditional European private bank

C.

Japanese equivalent of traditional European private bank

D.

None of the above

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Question # 73

Section B (2 Mark)

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?

Options:

A.

She needs to insure her life for 12 years

B.

She does not need to insure her life

C.

She needs to insure her life for 30 years

D.

She needs to insure her son’s life for 30 years

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Question # 74

Section A (1 Mark)

A cognitive heuristic in which a decision-maker relies upon knowledge that is readily available rather than examining other alternatives or procedures. Which of the following is most likely consistent with this bias?

Options:

A.

Anchoring and Adjustment Bias

B.

Availability Bias

C.

Confirmation bias

D.

Overconfidence Bias

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Question # 75

Section A (1 Mark)

Which of the following could be classified as an emotional bias?

Options:

A.

The investor has the difficulty in interpreting complex new information

B.

The investor only partially adjusts forecasts when he receives new information.

C.

The investor has a tendency to value the same assets higher if he owns them than if he does not own them.

D.

None of these

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Question # 76

Section B (2 Mark)

The basic rate of income tax on non-savings incomein UK for tax year in 2011-12 is:

Options:

A.

20%

B.

10%

C.

40%

D.

50%

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Question # 77

Section A (1 Mark)

Which of the following is not true with respect to H model of equity valuation?

Options:

A.

This model is similar to the two-stage model except that a gradual change in the growth rate is assumed rather than a sudden change.

B.

The growth rate of earnings starts at a high initial rate and declines over the supernormal growth period linearly.

C.

Dividend pay-out is constant over a time period and not affected by the shifting growth rates.

D.

None of the above.

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Question # 78

Section A (1 Mark)

In US which of the following is classified as passive income?

Options:

A.

Bonus income

B.

Gain on the sale of real estate

C.

Interest income

D.

Income from a limited partnership

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Exam Code: CWM_LEVEL_2
Exam Name: Chartered Wealth Manager (CWM) Certification Level II Examination
Last Update: Jan 31, 2025
Questions: 1259
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