Chartered Wealth Manager® (CWM®) Certification Level II Examination
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93 questions in this view
Section C (4 Mark)
Suppose Nifty is at 4500 in May. An investor, Mr. Prasad, executes a Short Strangle by selling 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 3735
If Nifty closes at 5265
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Section C (4 Mark)
MFI Ltd., reported earnings per share of Rs. 2.40 in 2018, and paid dividends per share of Rs. 1.06. The earnings had grown 7.5% a year over the prior five years and were expected to grow 6% a year in the long term (starting in 2019). The stock had a beta of 1.05 and traded for ten times earnings. The risk-free rate is 7% and the market rate of return on the share is 12.5%. Estimate the P/E Ratio for MFI Ltd and the long-term growth rate that is implied in the company's current P/E ratio?
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Section C (4 Mark)
Mr. Shankar is your client having Rs. 50,00,000 portfolio in three asset classes as on 1st April, 2014. Comprised of Equity and Debt each in 40% allocation with the rest of the portfolio invested in GOLD ETF. Over the period up to 31st March, 2018. Equity and Debt have given a total return of 10% and 12% respectively. Whereas Gold has given a total return of 70%. As a Wealth Manager, you rebalance the portfolio today and change it's allocation to 50% in equity with the other two classes equally sharing the balance. What should be the transfer of money amongst asset classes?
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Section C (4 Mark)
You may need to file your returns in India under the following circumstances:
I. The India-sourced income exceeds the maximum amount chargeable to tax for the relevant previous year thus resulting in liability to pay taxes in India.
II. Claiming refund of taxes where taxes withheld are in excess of tax liability.
III. To enable you to claim DTAA benefits in the country of your residence i.e. the country in which your global income is consolidated and taxed.
IV. To become tax compliant under the IT Act.
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Section C (4 Mark)
Your broker recommends that you purchase XYZ Inc. at Rs. 60. The stock pays a dividend of Rs. 2.40 which (per share earnings) is expected to grow annually at 8 percent. If you want to earn 12 percent on your funds, is this a good buy?
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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
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