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Chartered Wealth Manager (CWM) Certification Level II Examination

Last Update 21 hours ago Total Questions : 1259

The Chartered Wealth Manager (CWM) Certification Level II Examination content is now fully updated, with all current exam questions added 21 hours ago. Deciding to include CWM_LEVEL_2 practice exam questions in your study plan goes far beyond basic test preparation.

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Question # 4

Section A (1 Mark)

________ bias means that investors are too slow in updating their beliefs in response to evidence.

A.

Framing

B.

Regret avoidance

C.

Overconfidence

D.

Conservatism

Question # 5

Section B (2 Mark)

The minimum service required for entitlement to payment of gratuity under the Act, in case of an employee leaving service by death or incapacitation is

A.

2 years

B.

3 years

C.

5 years

D.

No minimum service required

Question # 6

Section A (1 Mark)

In terms of the risk/return relationship

A.

Only factor risk commands a risk premium in market equilibrium.

B.

Only systematic risk is related to expected returns.

C.

Only nonsystematic risk is related to expected returns.

D.

A and B.

Question # 7

Section C (4 Mark)

Read the senario and answer to the question.

Which types(s) of investment(s), would be consistent with their retirement goal?

A.

(I) only

B.

(I) and (IV) only

C.

(I) and (III) only

D.

(II) and (IV) only

Question # 8

Section A (1 Mark)

DINK stands for _______

A.

Direct in kind funding

B.

Double income no kids

C.

Deep interest no kids

D.

None of the above

Question # 9

Section B (2 Mark)

The term “permanent establishment” includes especially:

A.

I, II and III

B.

II and III

C.

III and IV

D.

All of the Above

Question # 10

Section C (4 Mark)

Suppose Nifty is at 4500 in May. An investor, Mr. A, executes a Long Strangle by buying a Rs. 4300 Nifty Put for a premium of Rs. 23 and a Rs 4700 Nifty Call for Rs 43.

What would be the Net Payoff of the Strategy?

• If Nifty closes at 4232

• If Nifty closes at 5241

A.

2 and 475

B.

120 and -431

C.

91 and 145

D.

45 and 51

Question # 11

Section B (2 Mark)

Last year, Owen Technologies reported negative net cash flow and negative free cash flow. However, its cash on the balance sheet increased. Which of the following could explain these changes in its cash position?

A.

The company had a sharp increase in its depreciation and amortization expenses.

B.

The company had a sharp increase in its inventories.

C.

The company issued new common stock.

D.

Statements a and b are correct.

Question # 12

Section B (2 Mark)

Total income of an individual including long-term capital gain of Rs. 50,000/- is Rs.1,60,000/-, the tax on total income for the assessment year 2012-13 shall be: CII-12-13: 852,11-12: 785,10-11:711]

A.

Rs. 1,030/-

B.

Rs. 2,060/-

C.

Rs. 2,266/-

D.

NIL

Question # 13

Section A (1 Mark)

Select the CORRECT statement regarding basis risk associated with futures.

A.

Basis risk can be completely eliminated.

B.

Although the basis fluctuates over time, it can be precisely predicted.

C.

The basis must be zero on the maturity date of the contract.

D.

A hedge will reduce risk as long as basis fluctuations are positive.

Question # 14

Section B (2 Mark)

If an investor strongly believes that the stock market is going to have a sharp decline shortly, he or she could maximize profit by

A.

Short selling stock-index futures contracts.

B.

Hedging current short positions.

C.

Using stock-index futures to straddle the market.

D.

Buying stock-index futures contracts.

Question # 15

Section B (2 Mark)

Consider a one-year maturity call option and a one-year put option on the same stock, both with striking price Rs45. If the risk-free rate is 4%, the stock price is Rs48, and the put sells for Rs1.50, what should be the price of the call?

A.

Rs. 4.38

B.

Rs. 5.60

C.

Rs. 6.23

D.

Rs. 12.26

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