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Chartered Wealth Manager CWM_LEVEL_2 AAFM Study Notes

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Total 1259 questions

Chartered Wealth Manager (CWM) Certification Level II Examination Questions and Answers

Question 89

Section A (1 Mark)

If a certain stock has a beta greater than 1.0, it means that

Options:

A.

The stock's return is more volatile than that of the market portfolio.

B.

An investor can eliminate the risk by combining it with another stock that has a negative beta.

C.

An investor will earn a higher return on his stock than that on the market portfolio.

D.

The stock is less risky than the market portfolio.

Question 90

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

Options:

A.

-420 and 230

B.

-240 and 130

C.

220 and 145

D.

520 and 170

Question 91

Section B (2 Mark)

A project should be considered if the Profitability Index is

Options:

A.

Less than 1

B.

More than 1

C.

More than to 0.5

D.

None of the above

Question 92

Section B (2 Mark)

In a wealth management Platform which of the following is/are the functions of Middle/Back Office – Advisor

Options:

A.

I, II and III

B.

II and III

C.

I, II and IV

D.

All of the Above

Page: 23 / 47
Total 1259 questions