Chartered Wealth Manager (CWM) Certification CWM_LEVEL_2 Exam Questions

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Only candidates who have complete the CWM_LEVEL_1 and CWM_LEVEL_2 exams can use the CWM Certification to meet the academic requirements of SEBI RIA Regulations 2013 under NISM Approved Certifications for SEBI RIA REGULATIONS. Chartered Wealth Manager (CWM) Certification CWM_LEVEL_2 needs to be registered at Pearson VUE. To help you prepare for CWM certification CWM_LEVEL_2 exam well, ITExamShop has released new CWM_LEVEL_2 exam questions as the preparation materials. Choosing the ideal and valid CWM Certification CWM_LEVEL_2 exam guide help you learning all the questions and answers with pdf file easily. We ensure that you can pass CWM_LEVEL_2 Chartered Wealth Manager (CWM) Certification Level II Examination successfully.

You also can check CWM Certification CWM_LEVEL_2 free questions Before getting the real exam questions.

Page 1 of 4

1. Section A (1 Mark)

Which one of the following statements is incorrect?

Most hedge fund managers do not have to explain their investment decisions to investors

A hedge fund side pocket prevents the redemption of certain investments which might be difficult to value

Lock-ups in hedge funds prevent the manager from selling any of his investments without express permission from investors

Gates placed on hedge funds limit the amount that can be withdrawn from it in anyone year

2. Section A (1 Mark)

Rahul deposits Rs. 30,000/- per year, at the end of the year, into an account for 30 years.

What amount would be accumulated in that account at the end of 30 years if ROI is 9 % per annum?

3498723.56

4089226.15

2345226.34

4298712.9

3. Section A (1 Mark)

Which of the following statements is/are correct with respect to naïve diversification?

Only I

Only II

Both of the above

None of the Above

4. Section B (2 Mark)

You have been asked to estimate the market value of an apartment complex that is producing annual net operating income of Rs44,500. Four highly similar and competitive apartment properties within two blocks of the subject property have sold in the past three months. All four offer essentially the same amenities and services as the subject. All were open-market transactions with similar terms of sale. All were financed with 30-year fixed-rate mortgages using 70 percent debt and 30 percent equity.

The sale prices and estimated first-year net operating incomes were as follows:

What is the indicated value of the property using direct capitalization?

Rs 3,30,000

Rs 3,90,351

Rs3,75,000

Rs 3,57,000

5. Section A (1 Mark)

When markets are in equilibrium, the CML will be upward sloping

Because it shows the optimum combination of risky securities.

Because the price of risk must always be positive.

Because it contains all securities weighted by their market values.

Because the CML indicates the required return for each portfolio risk level.

6. Section A (1 Mark)

NSSO stands for ____________

National Security Space Office

National Shared Services Organization

National Sample Survey Organization

None of the above

7. Section A (1 Mark)

Which ONE of the following in not the requirement for managing customer?

Need and want of customers

Measurement of most or least profitability of customer or product

Measurement of least growth potential of product or customer

Knowing which customers will be advocates and supporters

8. Section A (1 Mark)

Mr. Rajesh was the owner of an uninsured property. But unfortunately the property caught fire because of which he suffered severe financial losses.

The reason Mr. Rajesh suffered losses as he did not cover:

The investment risk

The pure risk

The speculative risk

The dynamic risk

9. Section C (4 Mark)

Read the senario and answer to the question.

Jogen commuted his 40% of pension in April, 2008 with Rs. 2,15,000.

What would be the taxable amount on commuted pension received by Jogen, if he would retire from a private organization?

Rs. 1,07,500

Rs. 35,833

Rs. 1,70,167

Rs. Nil

10. Section C (4 Mark)

Read the senario and answer to the question.

If Mrs. Deepika, a conservative investor, has Rs. 50, lakhs today that she could invest for the next three months in a three month bank CD or in a stock. The bank CD offers a guaranteed return 6 % over the three-month period. Alternatively she thinks the price of the stock will rise by 5% over the next months. She is confused in taking the decision.

Guide her in trade off between return and risk so that she makes a decision in choosing investments?

As the return on stock is higher in next 3 months she should decide to invest in stock.

The future price of the stock is uncertain, her return from investing in this stock is also uncertain. The return could be less than 5% and might be even negative. But in Bank CD return is guaranteed. So as a conservative investor she should decide of invest in the Bank C

For making a balance trade off between return and risk she should invest 50% in each investment

Option B and C

Page 2 of 4

11. Section A (1 Mark)

In a short call, profit is

Unlimited

Limited to premium

Premium Plus Market Price minus exercise price

Premium minus exercise price

12. Section A (1 Mark)

Which of the following is not true in respect of CIBIL?

Pulling up CIBIL report is mandatory for all loans.

Mandate for pulling up the report and sharing of information from customer is mandatory.

Report is to be pulled up at the front end.

None of the above.

13. Section C (4 Mark)

Read the senario and answer to the question.

What would be the taxable amount on gratuity received by Jogen, if he would retired from an organization where employees are not covered under Gratuity Act?

Rs. 75,000

Rs. 3,50,000

Rs. Nil

Rs. 69,300

14. Section C (4 Mark)

Nifty is at 3200. Mr. XYZ expects very little movement in Nifty. He sells 2 ATM Nifty Call Options with a strike price of Rs. 3200 at a premium of Rs. 97.90 each, buys 1 ITM Nifty Call Option with a strike price of Rs. 3100 at a premium of Rs. 141.55 and buys 1 OTM Nifty Call Option with a strike price of Rs. 3300 at a premium of Rs. 64.

What would be the Net Payoff of the Strategy?

• If Nifty closes at 3200

• If Nifty closes at 4212

-87.75 and 57.50

-75.25 and -45.65

90.25 and -9.75

-15.45and 95.75

15. Section A (1 Mark)

A bank that wants to protect itself from higher credit costs due to a decrease in its credit rating might purchase _________________________.

A credit risk option

A standby letter of credit

A credit linked note

A credit swap

16. Section A (1 Mark)

Response of listening falls under which one of the following categories?

It can be verbal

It can be nonverbal

It can be verbal or nonverbal

It can neither be verbal nor nonverbal

17. Section C (4 Mark)

Consider the following information for three mutual funds:

Market Return 10%

Risk free return is 7%.

Calculate Jensen measure (%).

1.70, 5.30, 3.40

2.25, 3.78, 4.65

4.35, 3.78, 2.53

3.17, 4.58, 5.78

18. Section B (2 Mark)

Which of the following statements concerning index funds and actively managed funds is true?

Their performance is about equal.

They tend to have an inverse relationship.

Actively managed funds tend to outperform index funds.

Index funds tend to outperform actively managed funds.

19. Section A (1 Mark)

_____________allow investors to increase diversification in direct real estate holdings by investing in groups of real estate projects.

Lease / Tenancy Agreement

Aggregation Vehicles

High and Best Use of Property

Leveraged Equity Position

20. Section B (2 Mark)

Manish is thinking of acquiring some shares of ABC. Ltd.

The rate of returns is as follows:

Calculate the variance and the standard deviation

16, 8

8, 16

7.4, 54.3

35.04, 5.92

Page 3 of 4

21. Section A (1 Mark)

The __________ is NOT a market anomaly.

size effect

January effect

earnings announcement anomaly

accounting changes effect

22. Section B (2 Mark)

Eric, who has lived in the Netherlands for the whole of his life, arrives in the UK on 1 June 2011 and remains in the UK until 31 December 2011, when he returns permanently to the Netherlands.

His UK residence status for 2011-12 is:

Resident and ordinarily resident

Resident but not ordinarily resident

Ordinarily resident but not resident

Neither resident nor ordinarily resident

23. Section A (1 Mark)

The investors who buy the debt of troubled companies including subordinated debt, junk bonds, bank loans, and obligations to suppliers are called__________

Vulture Investors

Angel Investors

Seed Investors

None of the Above

24. Section B (2 Mark)

Mr. Jatin is a single forty nine year-old pharmaceutical executive earningRs25,00,000 per year. He lives extravagantly, occasionally spending more than his income, but has saved approximately Rs. 15,00,000. His primary investment goal is to donate Rs30,00,000 to his alma mater, but cannot obtain life insurance. Mr. Jatin exhibits the following biases:

I and II

I and III

III and IV

I, II and III

25. Section A (1 Mark)

A muslim gentleman can leave his will, bequeathing all his properties to someone often than his legal heirs to the extent of…………….

His wish

A small portion

One third

One half

26. Section A (1 Mark)

Which of the following is classified as passive income in US?

Bonus income

Gain on the sale of real estate

Interest income

Income from a limited partnership

27. Section B (2 Mark)

You write one XYZ February 50 put for a premium of Rs5. Ignoring transactions costs, what is the breakeven price of this position?

Rs. 50

Rs. 55

Rs. 45

Rs. 40

28. Section B (2 Mark)

Amount of liability of payment of gratuity is calculated at the rate of

One month’s wage for each completed year of service

20days wages for each completed year of service

Half a month’s wage for each completed year of service

15 day’s wage for each completed year of service

29. Section A (1 Mark)

Conclusions about technical analysis suggest that:

It is difficult to justify technical analysis

It has been found to be completely deficient

Stock price movements repeat themselves constantly

There is complete agreement about the interpretation of technical signals

30. Section A (1 Mark)

An example of a highly cyclical industry is ________.

The automobile industry

The tobacco industry

The food industry

A and B

Page 4 of 4

31. Section B (2 Mark)

Calculate the NOI for an office building with the following information:

Rs. 1,73,500

Rs. 1, 91,000

Rs. 1,93,500

Rs. 2,11,000

32. Section A (1 Mark)

A well-diversified portfolio is defined as

One that is diversified over a large enough number of securities that the nonsystematic variance is essentially zero.

One that contains securities from at least three different industry sectors.

A portfolio whose factor beta equals 1.0.

A portfolio that is equally weighted.

33. Section A (1 Mark)

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

an individual who is an author of a book

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

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

None of the Above

34. Section B (2 Mark)

As a CWM you are considering the following bond for inclusion in the fixed income portfolio of your client:

What will be the duration of this bond? and What will be the effect of the changes on the duration of the bond if the coupon rate is 6% rather than 9%?

8 years, Increase

7.33 years, Decrease

6.031 years, Increase

7.012 Years, Decrease

35. Section C (4 Mark)

To fulfil the Educational Qualification to be registered as an Investment Advisor under the SEBI Investment Advisor Regulations 2013.

The applicant must:

Both I and IV

Both II and III

Either of I or II and Either of III or IV

All I, II, III and IV

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Chartered Wealth Manager (CWM) Certification CWM_LEVEL_2 Exam Questions

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