Section C (4 Mark)
Ms. Nimita Shah, aged 34 years as on 2nd April 2010, is Vice President in a Mumbai-based firm. She has twin daughters Revati and Savitri of age 12 years and she is the sole guardian of her children pursuant to her recent divorce. She is currently residing in a rented house. Both her daughter are studying in the 6th Standard. She has approached you, a CWM®, for preparing her Wealth plan. She has shared the following financial information with you:
You, in consultation with Nimita have crystallized the following financial goals for her family and the preliminary roadmap to achieve them:
1.Send both daughters to a Boarding school – immediately – Outlay Rs. 1.80 lakh (present cost) per child p.a. – for 6 years – To be met on year to year basis by investing a suitable corpus.
2.Buy a house–in the next three years – Outlay of Rs. 80 lakh – Take a loan for 15 year term.
3.Invest suitably for the Higher Education of both children – Higher Education starts after 6 years – present cost Rs. 4.5 lakh p.a. for each child for a team of 5 year.
4.To invest monthly for Revati and Savtri’s wedding when they complete 24 years of age. The estimated present cost of one such marriage is Rs. 15 Lakh
5.Retirement Corpus for self – Corpus to be accumulated in 21 years – Corpus to sustain an annuity of Rs. 1.25 lakh p.m. (current cost) inflation linked for a post – retirement life of 25 years.
6.A world tour with both of her kids – After 11 years – outlay of Rs. 8 lakh at current prices.
7.A suitable Estate Planning to cover all her physical and financial assets.
Assumptions:
Section B (2 Mark)
Which of the following investment options would most likely be part of the portfolio of a Moderate investor?
Section A (1 Mark)
Which of the following act is done by the most dissatisfied customers?
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…………….
Section A (1 Mark)
Deduction u/s 80U in case of permanent physical disability (including blindness) allowed to:
Section B (2 Mark)
Which of the following statements is/are correct?
Section B (2 Mark)
As per article 12 Double Taxation Avoidance Agreement with Singapore, Royalties and fees for technical services arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.However, such royalties and fees for technical services may also be taxed in the Contracting State in which they arise and according to the laws of that Contracting State, but if the recipient is the beneficial owner of the royalties or fees for technical services, the tax so charged shall not exceed__________ per cent.
Section C (4 Mark)
Ms. Deepika is a famous Bollywood actress having a busy and successful professional business venture in the name of ‘Millennium Production House” with her childhood friend Navin. Initially she received few small assignments. But after a documentary film, which was welcomed by people of Mumbai, she becomes quite successful. She wants to set aside today a capital sum to be liquidated over the next 10 years for the care of her aged mother living alone in MADARUAI with her sisters. The desired income stream for her mother as per her status is Rs. 2,40,000 p.a. beginning after one year and rising 5% p.a. each year thereafter. Deepika belives that the investment earnings on the fund will be 8% p.a.
In the last 8 years, there was no looking back in the business with 22 employees and around Rs. 1.25 crore of annual income, net of all expenses. She leads a very comfortable life as a “modern successful single lady”. She has already constructed a house valuing Rs. 3.75 crore and has a portfolio of assets which include precious metals like gold, silver etc. worth Rs. 1.25 crore, direct and indirect investment in equities (mutual funds) Rs. 2.75 crores, bank deposits and small savings scheme investments Rs. 0.75 crore.
You as a CWM® has been approached by her, for advice on retirement planning. She expects to work for another 10 years and after that wants to pursue her hobbies of traveling and photography and want to be active in social work. She has expressed desire to leave half of her estate in equal proportion to her two nephews and donate other half to charitable trust “Mother Care”.
Section A (1 Mark)
___________CRM automates and improves customer-facing and customer supporting business processes
Section A (1 Mark)
Financial Gerontology tries to assess client needs based on __________
Section B (2 Mark)
The risk-free return is 9 percent and the expected return on a market portfolio is 12 percent. If the required return on a stock is 14 percent, what is its beta?
Section A (1 Mark)
The steps to establishing an investment policy are to state the
Section A (1 Mark)
If the proposer does not disclose fully all the material facts at the time of Proposal the principle violated
Section C (4 Mark)
Read the senario and answer to the question.
Assume Neeraj bought a second hand car in June 2007. Since the insurance premium was due, Neeraj paid it in the old owner’s name.Neeraj didn’t receive the original policy despite repeated requests. The car later met with an accident causing damages worth Rs. 10000. Neeraj had not transferred the car in his name, as Neeraj did not have the original documents. Can the insurer reject his claim?
Section A (1 Mark)
The most profitable credit card customers for a bank are those that:
Section A (1 Mark)
Technical Analysis of security valuation includes ………..
Section A (1 Mark)
The two major types of real estate are ____ and ___ .
Section A (1 Mark)
Hybrid plans are
Section B (2 Mark)
Lalit wants to sell a property for Rs.20 lakhs. He is earning rent from tenant Rs.2,15,000. He is spending following amounts annually on that property
The value of the property would be:
Section A (1 Mark)
Given below is the portfolio return; calculate the expected portfolio rate of return:
Section A (1 Mark)
Which of the following is an assumption of the CMT?
Section C (4 Mark)
A stock ABC Ltd. is trading at Rs. 450. Mr. XYZ is bullish on the stock. But does not want to invest Rs. 450. He does a Long Combo. He sells a Put option with a strike price Rs. 400 at a premium of Rs. 1.00 and buys a Call Option with a strike price of Rs. 500 at a premium of Rs. 2.
What would be the Net Payoff of the Strategy?
• If ABC Ltd closes at 625
• If ABC Ltd closes at 328
Section A (1 Mark)
Which is not the basic ingredient of a valid trust?
Section A (1 Mark)
How many states operate lotteries to generate revenue in US?
Section A (1 Mark)
Risk factors in the APT must possess all of the following the characteristics except:
Section B (2 Mark)
In the year to 31 March 2012, A Ltd (which is UK resident) made a UK trading profit of £100,000. The company's only other income consisted of rents received of £52,500 (net) from an investment property in Germany. These rents were received net of withholding tax of 25%. A Ltd has no associated companies.
The credit for double tax relief that will be given in the corporation tax computation for the year will be:
Section B (2 Mark)
You borrowed Rs8500, with the understanding that you are to make monthly payments over 36 months. Interest is charged at 7% compounded monthly. If you were to increase your payments by Rs20 per month, how much less time would it take you to pay back the loan?
Section A (1 Mark)
An arbitrage opportunity exists if an investor can construct a __________ investment portfolio that will yield a sure profit.
Section C (4 Mark)
Read the senario and answer to the question.
As a CWM® which option would you recommend from the following to Neeraj and Kapil so that their tax liability is minimum if they invest in the debt based scheme
Section A (1 Mark)
The tendency to seek and interpret information that confirms existing beliefs. Our conclusions are unduly biased by what we want to believe. Which of the following is most likely consistent with this bias?
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.
Section A (1 Mark)
Mr. X’s minor daughter earned Rs. 50000 from his special talent. This income will be clubbed with
Section A (1 Mark)
The eligibility Criteria for Self Employed Professionals & Businessman for minimum age of the applicant in case of personal loan is:
Section C (4 Mark)
Suppose you have a two-security portfolio containing Bonds A and B. The market value of Bond A is Rs. 6,000, and the market value of Bond B is Rs4,000. The duration of Bond A is 8.5, and the duration of Bond B is 4.0. Calculate the duration of the portfolio.
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?
Section A (1 Mark)
If a testator makes a will ‘to induce another person to make him comply with his (testators) wish’ but does not have any testamentary operation or intention, then this will is called as
Section A (1 Mark)
As per Hindu succession Act 1956 following person is not considered as a class I heir of the person who dies intestate
Section A (1 Mark)
In US which of the following is classified as passive income?
Section A (1 Mark)
The potential loss for a writer of a naked call option on a stock is
Section B (2 Mark)
To pay for new equipment with a cash price of Rs7500, you need to borrow at 5.3% compounded monthly, then make monthly payments for 32 months. How much less would your payments be if you were able to save Rs2100 as a down payment before you purchase the new equipment?
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?
Section C (4 Mark)
Read the senario and answer to the question.
Harish incurred Rs. 10 Lakh on the construction of his house five years ago which has depreciated today to Rs. 7 Lakh. The cost of construction over the period has gone up by 70%.The depreciated value of household items is Rs. 2.5 Lakh and their present cost of replacement is Rs. 4 Lakh. Harish wants to buy a Householders’ insurance policy in such a way that the house is insured on reinstatement basis and household goods on the basis of written down value. How much total insurance coverage should he take from the insurance company?
Section C (4 Mark)
Tapley Dental Supply Company has the following data:
If Tapley could streamline operations, cut operating costs, and raise net income to Rs300, without affecting sales or the balance sheet (the additional profits will be paid out as dividends), by how much would its ROE increase?
Section B (2 Mark)
Lucy purchased a rental house a few years ago for $100,000. Total depreciation to date is $35,000. In the current year, she sells the house for $155,000 and pays $10,000 selling expenses. Calculate Lucy's gain on the sale.
Section A (1 Mark)
All of the following are examples of capital expenditures except:
Section C (4 Mark)
Read the senario and answer to the question.
Assume the following additional facts:
The Shankers have purchased a homeowner’s policy (comprehensive) covering 100% of the replacement cost of their residence. This policy has a Rs. 500 deductible. Also, they have purchased a disability income policy with a 30-day elimination period and an any-occupation definition of disability.
What actions should the Shankers consider in order to improve the quality of the insurance program described above?
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
Section B (2 Mark)
As per Article 11 double Taxation Avoidance Agreement with US Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State.However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed:
(a) ____per cent of the gross amount of the interest if such interest is paid on a loan granted by a bank carrying on a bona fide banking business or by a similar financial institution (including an insurance company); and
(b) _____ per cent of the gross amount of the interest in all other cases.
Section B (2 Mark)
Which of the following statements is most correct?
Section B (2 Mark)
Dharampal has let out his house property at monthly rate of Rs. 12000. He has paid Rs.3500 as annual municipal tax. He wants to know the Net Annual value of his house at Bhuj for AY 2011-12. The Municipal value of the house is Rs. 90,000, Fair rent Rs. 1,40,000, Standard rent Rs. 1,20,000. The house was vacant for one month during the previous year 2010-11 and the rent has not changed since then.
