AAFM Related Exams
CWM_LEVEL_2 Exam

Section C (4 Mark)
Mr. A bought XYZ Ltd. For Rs. 3850 and simultaneously sells a call option at an strike price of Rs. 4000. Which means Mr. A does not think that the price of XYZ Ltd. will rise above Rs. 4000. However, incase it rises above Rs. 4000, Mr. A does not mind getting exercised at that price and exiting the stock at Rs. 4000 (Target Sell Price = 3.90% return on the stock purchase price). Mr. A receives a premium of Rs. 80 for selling the call. Thus net outflow to Mr. A is (Rs. 3850 – Rs. 80) = Rs. 3770. He reduces the cost of buying the stock by this strategy.
What would be the Net Payoff of the Strategy?
• If XYZ closes at 3350
• If XYZ closes at 4800
Section A (1 Mark)
__________ is a tangible company asset that can (and should) be inventoried and managed.
Section B (2 Mark)
Which of the following statements with respect to International Taxation Structure is/are correct?