Chartered Wealth Manager® (CWM®) Certification Level II Examination
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Case Study
Case Study: Wealth planning of Riya Thakur
Miss Riya Thakur, 26, single is working as a marketing executive with an MNC for the past 4 years. Her family includes her retired father (60), homemaker mother (58) and an elder brother aged 31.
Income and Assets
• Total annual income: Rs. 5 lakhs
• Annual household expenses: Rs. 2.42 lakhs
• Mutual fund investments through SIP: Rs 24000 annually
• Savings account balance: Rs. 2 lakhs
• Vehicle: Rs. 4.5 lakhs
She does not have any liability at present.
Goals and Aspirations
• Dream vacation to Europe within 2 years. Estimated today’s cost be Rs. 5 lakhs
• Purchase a home worth Rs. 70 lakhs (present cost) in 8 years.
• Her self-marriage after 3 years’ worth Rs. 15 lakhs (current cost)
Assumptions
• Inflation: 6% p.a.
• Equity returns: 12% p.a.
• Debt returns: 8% p.a.
• Riya’s expected life: 80
Riya’s mother expected life: 75
Section C (4 Mark)
You have suggested a strategy that aims to invest more when the share price falls and less when the share price rises. It is done by calculating predetermined amounts for the total value of the investment in future periods and then making an investment to match these amounts at each future period. You are indicating a technique known as?
©AAFM. 202ac6cb
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Case Study
Case Study: Wealth planning of Riya Thakur
Miss Riya Thakur, 26, single is working as a marketing executive with an MNC for the past 4 years. Her family includes her retired father (60), homemaker mother (58) and an elder brother aged 31.
Income and Assets
• Total annual income: Rs. 5 lakhs
• Annual household expenses: Rs. 2.42 lakhs
• Mutual fund investments through SIP: Rs 24000 annually
• Savings account balance: Rs. 2 lakhs
• Vehicle: Rs. 4.5 lakhs
She does not have any liability at present.
Goals and Aspirations
• Dream vacation to Europe within 2 years. Estimated today’s cost be Rs. 5 lakhs
• Purchase a home worth Rs. 70 lakhs (present cost) in 8 years.
• Her self-marriage after 3 years’ worth Rs. 15 lakhs (current cost)
Assumptions
• Inflation: 6% p.a.
• Equity returns: 12% p.a.
• Debt returns: 8% p.a.
• Riya’s expected life: 80
Riya’s mother expected life: 75
Section C (4 Mark)
Riya wants to know how much approximately she should be covered with life insurance, if she wants to provide her mother throughout her lifetime an amount equal to their present household/living monthly expenses inflation-linked. Assume that the proceeds of such claim would be invested in a debt investment by her. (Ignore charges and taxes if applicable)
©AAFM. 202ac6cb
Select an answer above, then submit your vote. Reading or practicing does not cast a vote.
Case Study
Case Study: Wealth planning of Riya Thakur
Miss Riya Thakur, 26, single is working as a marketing executive with an MNC for the past 4 years. Her family includes her retired father (60), homemaker mother (58) and an elder brother aged 31.
Income and Assets
• Total annual income: Rs. 5 lakhs
• Annual household expenses: Rs. 2.42 lakhs
• Mutual fund investments through SIP: Rs 24000 annually
• Savings account balance: Rs. 2 lakhs
• Vehicle: Rs. 4.5 lakhs
She does not have any liability at present.
Goals and Aspirations
• Dream vacation to Europe within 2 years. Estimated today’s cost be Rs. 5 lakhs
• Purchase a home worth Rs. 70 lakhs (present cost) in 8 years.
• Her self-marriage after 3 years’ worth Rs. 15 lakhs (current cost)
Assumptions
• Inflation: 6% p.a.
• Equity returns: 12% p.a.
• Debt returns: 8% p.a.
• Riya’s expected life: 80
Riya’s mother expected life: 75
Section C (4 Mark)
While explaining the basics of selecting a mutual fund scheme, you have asked Riya to analyze the mutual fund portfolio by five main indicators that apply, one of these is _____________ which is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.
©AAFM. 202ac6cb
Select an answer above, then submit your vote. Reading or practicing does not cast a vote.
Case Study
Case Study: Wealth planning of Riya Thakur
Miss Riya Thakur, 26, single is working as a marketing executive with an MNC for the past 4 years. Her family includes her retired father (60), homemaker mother (58) and an elder brother aged 31.
Income and Assets
• Total annual income: Rs. 5 lakhs
• Annual household expenses: Rs. 2.42 lakhs
• Mutual fund investments through SIP: Rs 24000 annually
• Savings account balance: Rs. 2 lakhs
• Vehicle: Rs. 4.5 lakhs
She does not have any liability at present.
Goals and Aspirations
• Dream vacation to Europe within 2 years. Estimated today’s cost be Rs. 5 lakhs
• Purchase a home worth Rs. 70 lakhs (present cost) in 8 years.
• Her self-marriage after 3 years’ worth Rs. 15 lakhs (current cost)
Assumptions
• Inflation: 6% p.a.
• Equity returns: 12% p.a.
• Debt returns: 8% p.a.
• Riya’s expected life: 80
Riya’s mother expected life: 75
Section C (4 Mark)
Assume, one of Riya’s friends Mr. Rajeev owes Rs. 15,00,000 to Riya. Before clearing her liability, Rajeev dies leaving behind an Estate worth Rs. 3,00,000. In this case, Rajeev’s legal representatives are liable for?
©AAFM. 202ac6cb
Select an answer above, then submit your vote. Reading or practicing does not cast a vote.
Case Study
Case Study: Wealth planning of Riya Thakur
Miss Riya Thakur, 26, single is working as a marketing executive with an MNC for the past 4 years. Her family includes her retired father (60), homemaker mother (58) and an elder brother aged 31.
Income and Assets
• Total annual income: Rs. 5 lakhs
• Annual household expenses: Rs. 2.42 lakhs
• Mutual fund investments through SIP: Rs 24000 annually
• Savings account balance: Rs. 2 lakhs
• Vehicle: Rs. 4.5 lakhs
She does not have any liability at present.
Goals and Aspirations
• Dream vacation to Europe within 2 years. Estimated today’s cost be Rs. 5 lakhs
• Purchase a home worth Rs. 70 lakhs (present cost) in 8 years.
• Her self-marriage after 3 years’ worth Rs. 15 lakhs (current cost)
Assumptions
• Inflation: 6% p.a.
• Equity returns: 12% p.a.
• Debt returns: 8% p.a.
• Riya’s expected life: 80
Riya’s mother expected life: 75
Section C (4 Mark)
Riya is willing to create a fund to ensure her wedding expenses requirement after 3 years. You suggest her to invest in an equity mutual fund scheme by way of monthly SIP starting from today and continuing till the last year. What monthly investment should be made to get this arrangement?
©AAFM. 202ac6cb
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Section C (4 Mark)
What is the portfolios standard deviation if you put 25% of your money into stock A which has a standard deviation of 15% and rest into stocks B which has a standard deviation of 10%. The correlation coefficient between the returns of the stocks is .75.
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