Section C (4 Mark)
Read the senario and answer to the question.
Vinay has come across two projects, each with a 12% required rate of return and under given cash flows:



If the projects are independent, you being a CWM® would advise Vinay to:

A. Reject both projects

B. Accept Project A and Reject Project B

C. Reject Project A and Accept Project B

D. Accept both projects

Section A (1 Mark)
Short-term cash flow improvement may not be achieved by

A. Reducing inventories

B. Reducing trade payables

C. Reducing trade receivables

D. Increasing trade payables

Section B (2 Mark)
Fifteen Year ago, Sandeep set up his initial allocation in her defined contribution plan by placing an equal amount in each asset class and never changed it. Over time, he increased his contribution by 3 % per year until he reached maximum amount allowed by law. Which of the following biases that Sandeep suffers from?

A. Representativeness Bias

B. Status Quo Bias

C. Availability Bias

D. Confirmation Bias

Section A (1 Mark)
A dividend paid by a company which is a resident of India to a resident of the United Kingdom may also be taxed in India but the Indian tax so charged shall not exceed __________per cent of the gross amount of the dividend.

A. 10

B. 15

C. 12

D. 20

Section A (1 Mark)
The Base Year for BSE Realty index is____________

A. 2005

B. 2006

C. 2004

D. 2007

Section B (2 Mark)
Expenses are 10% of the gross (office) premium. Pure premium is Rs. 200. Calculate office premium.

A. 222

B. 220

C. 182

D. 180

Section A (1 Mark)
Vineet invests Rs. 5000/- per month at the beginning of the month for 10 years in Recurring Deposit account that pays 8.5% p.a interest compounded quarterly. What will be the accumulated amount in his account.

A. 944149.33

B. 939154.12

C. 899143.23

D. 99123.43

Section A (1 Mark)
Psychologists have found that people who make decisions that turn out badly blame themselves more when that decision was unconventional. The name for this phenomenon is

A. Regret avoidance

B. Framing

C. Mental accounting

D. Overconfidence

Section C (4 Mark)
Mr. XYZ buys a Nifty Call with a Strike price Rs. 4100 at a premium of Rs. 170.45 and he sells a Nifty Call option with a strike price Rs. 4400 at a premium of Rs. 35.40.
What would be the Net Payoff of the Strategy?

• if Nifty closes at 4200
• if Nifty closes at 5447

A. 145.95 and -75.05

B. -35.05 and 164.95

C. 145.85 and -65.50

D. 25.05 and 154.25

Section A (1 Mark)
An insured becomes entitled for getting No Claim Bonus only at the renewal of a policy after the expiry of the full duration of _________ months.

A. 6

B. 9

C. 3

D. 12

Section C (4 Mark)
Vinod has a investment portfolio of Rs. 100000, a floor of Rs. 75000, and a multiplier of 2. So the initial portfolio mix is 50000 in stocks and 50000 in bonds. If stock market falls by 20%, what should Vinod do assuming he is following a CPPI policy?

A. He should sell stocks and bonds equally

B. He should sell Rs.10000 of bonds and invest it into stocks

C. He should sell Rs.10000 of stocks and invest it into bonds

D. He should buy Rs.20000 of stocks to average

Section C (4 Mark)
A 14% semiannual-pay coupon bond has six years to maturity. The bond is currently trading at par. Using a 25 basis point change in yield, the effective duration of the bond is closest to:

A. 0.389

B. 3.889

C. 3.97

D. None of the above