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GLO_CWM_LVL_1 Questions and Answers

Question # 6

In ULIP plans, the returns are dependent on in which the investments are done by the insurance company

A.

Shares

B.

Fixed Deposit

C.

Foreign exchange rates

D.

None of the above

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Question # 7

Minimum number of independent directors on the board of Asset Management Company is

A.

50%

B.

60%

C.

75%

D.

66.67%

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Question # 8

If the proposer does not disclose fully all the material facts at the time of Proposal the principle violated

A.

Caveat emptor

B.

Insurable interest

C.

Utmost good faith

D.

Sharing of risk

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Question # 9

General Insurance business was established in India in

A.

1818

B.

1938

C.

1912

D.

1850

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Question # 10

Wealth Erosion can happen due to _______

A.

Reduction in value of currency

B.

Fall in interest rates

C.

Inadequate insurance cover

D.

All of the above

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Question # 11

Which of the following statements in reference to REPO Rate is/are correct?

A.

I,II and III

B.

I and II

C.

I and III

D.

II and III

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Question # 12

Open Market Operations is an important tool for central banks in ___________.

A.

bullish equity market conditions

B.

bearish equity market conditions

C.

countries where debt market is developed

D.

countries where debt market is under-developed

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Question # 13

Which of the following is the third stage of the economic integration?

A.

Free Trade Areas

B.

Common Markets

C.

Custom Union

D.

Economic and Monetary Union

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Question # 14

Financial goals must be SMART. SMART stands for _________________

A.

Seek, Measure, Attainable, Realistic, Time bound

B.

Seek, Monitor, Attainable, Realistic, Time bound

C.

Specific, Measurable, Attainable, Realistic, Time bound

D.

Specific, Measurable, Attainable, Rewarding, Time bound

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Question # 15

Speculators

A.

Bet on future movements of price of asset

B.

Try to reduce/ eliminate an existing risk

C.

Take advantage of price differential between two markets

D.

None of the above

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Question # 16

Speculative risk can result in

A.

Gain

B.

Loss

C.

Status Quo

D.

All of the above

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Question # 17

Which of the following is not a characteristic of defined benefit plan?

A.

Benefit levels are guaranteed

B.

These plans are easy to design and explain to employees

C.

actuarial assumptions are necessary to determine actual contribution amounts

D.

Employer is subject to a recurring annual funding obligation

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Question # 18

HNWI stands for

A.

High Non Work Individuals

B.

High Net Worth Individuals

C.

High Net Worth Industries

D.

None of the above

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Question # 19

Residential status is to be determined for:

A.

Assessment year

B.

Accounting year

C.

Next coming year

D.

Previous year

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Question # 20

Which of the following is a self funded retirement security?

A.

Old age pension scheme

B.

Public provident fund

C.

Joint family system

D.

Provident Fund

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Question # 21

A borrower defaults on a secured loan of Rs. 50,000. The underlying security is worth Rs. 60,000. Which of the following is true? "

A.

"Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrower."

B.

Bank cannot sell the underlying security because its value is higher than loan.

C.

"Bank can retain the entire Rs. 60,000"

D.

"The excess of Rs. 10,000 has to be shared equally between the bank and the borrower."

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Question # 22

The beta of stock of Akhil Computers Ltd., is 1.5 and is currently in equilibrium. The required return on the stock is 19% and the expected return on the market is 15%. Suddenly due to a change in economic conditions, the expected return on the market increases to 17%. Other things remaining the same what would be new required rate of return on the stock?

A.

17.50%

B.

20.00%

C.

22.00%

D.

25.00%

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Question # 23

When cash flows occur at the beginning of each period, it is called as ___________

A.

Annuity in arrear

B.

Annuity due

C.

Ordinary annuity

D.

None of the above

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Question # 24

Which of the above statements is/are correct?

A.

(i) only

B.

(ii) only

C.

(i) and (ii) both are correct

D.

Both are incorrect

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Question # 25

Suppose X and Y are Father and Son respectively ,so when Y was a minor X advanced Rs 10,000 to him.

After Y becoming major X obtains a bond for Rs 20000 ,which is much larger than the original amount due from Y,by using his parental influence.The contract stands voidable because the consent is caused by:

A.

Duress

B.

Coercion

C.

Constructive Fraud

D.

Misrepresentation

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Question # 26

"A borrower who has been given notice of enforcement of security interest, replies with his objections. What is expected of the secured creditor? "

A.

Consider the objections fairly

B.

"If objections not acceptable, convey to borrower within 7 days"

C.

Both of the above

D.

None of the above

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Question # 27

A maximum of _____% of the issue would be allotted to one single QIB

A.

10

B.

25

C.

50

D.

75

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Question # 28

The share of a certain stock paid a dividend of Rs.10.00 last year. The dividend is expected to grow at a constant rate of 15 percent in the future. The required rate of return on this stock is considered to be 18 percent. How much should this stock sell for now? Assuming that the expected growth rate and required rate of return remain the same, at what price should the stock sell 4 years hence?

A.

Rs. 395.68, Rs. 690.25

B.

Rs. 383.33, Rs. 670.45

C.

Rs. 407.54, Rs. 712.38

D.

Rs. 435.85, Rs. 744.64

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Question # 29

Mr. Shivam Sharma expects to receive Rs 25000 in net receipts each year for five year and to sell the property for Rs 350,000 at the end of the five-year period, if Mr. Sharma expects a 15% return, what would be the value of the property?

A.

Rs. 3,25,000

B.

Rs. 2,57,818

C.

Rs. 2,60,000

D.

Rs. 2,60,000

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Question # 30

Under Motor Vehicles Insurance, liability only policy covers property damage up to Rs. _________, in case of private cars & commercial vehicles, and Rs. ________, in case of two wheelers, although Motor Vehicle Act requires a cover of only Rs. ________.

A.

Rs. 10,00,000 Rs. 5,00,000 Rs. 6,00,000

B.

Rs. 7,50,000 Rs. 1,00,000 Rs. 6,000

C.

Rs. 5,00,000 Rs. 2,00,000 Rs. 60,000

D.

Rs. 4,00,000 Rs. 3,00,000 Rs. 60,000

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Question # 31

Rajiv buys a growth oriented non dividend paying share for Rs. 200 and 4 years later sells it for Rs. 350. The CAGR is____

A.

10.30%

B.

18.80%

C.

75%

D.

15%

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Question # 32

Which of the following statement is not true?

A.

Correlation among the securities in the portfolio has nothing to do with the risk of portfolio

B.

Return on any financial assets consists of current yield and capital yield

C.

Risk of individual financial assets refers to variability of its returns around its mean returns

D.

Return of a portfolio is simply weighted average of returns on individual securities in the portfolio multiplied by their corresponding proportions/weights in the portfolio.

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Question # 33

Which of the following is not true in respect of the conditions essential for taxing income under the head income from House Property?

A.

The property must consist of buildings and land appurtenant there to

B.

The assessed may or may not be the owner of such house property

C.

The property may be used for any purpose, but it should not be used by the owner for the purpose of any business or profession carried on him, the profits of which are chargeable to tax.

D.

None of the above

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Question # 34

A UHNW segment client has investible assets worth of

A.

$20,000,000

B.

$50,000,000

C.

$75,000,000

D.

$100,000,000

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Question # 35

Income received in India in previous year is taxable in the hands of:

A.

Resident;

B.

Not-resident;

C.

Non ordinarily resident;

D.

All above.

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Question # 36

What is the most essential characteristic to be in existence at the stage of establishing client relationship?

A.

Collection of personal details

B.

Establishing trust and confidence

C.

Data gathering from the client

D.

Providing the client with an healthy atmosphere

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Question # 37

The risk measure used for calculating Treynor Index is:

A.

Alpha

B.

Variance

C.

Beta

D.

Standard Deviation

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Question # 38

The punishment of imprisonment for dishonour of cheques could extend up to:

A.

6 months

B.

9 months

C.

1 year

D.

2 years

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Question # 39

EBT stands for

A.

Electronic belated transfer

B.

Electronic beginners transfer

C.

Electronic benefit transfer

D.

Electronic beginning transfer

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Question # 40

What do you mean by UberrimaeFidei ?

A.

Null and Void

B.

Concealment of material facts

C.

Misrepresentation of facts

D.

Of utmost good faith

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Question # 41

Higher interest based on age is offered in which of the following accounts?

A.

Savings

B.

Term

C.

Current

D.

All of the above

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Question # 42

Joint account of two or more NRIs are permitted in case of:

A.

FCNR a/c

B.

NRE a/c

C.

NRO a/c

D.

All of the above

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Question # 43

If an investment has a correlation coefficient of 0.80 with the market, which of the following performance measures is the best measure of risks?

A.

Jensen.

B.

Sharpe & Jensen.

C.

Sharpe.

D.

Treynor.

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Question # 44

“Annuity certain” is

A.

When one amount is fixed for 5 years and another amount is paid for rest of the life span

B.

Designed to pay for an indefinite time period

C.

Designed to pay for a fixed time period

D.

None of the above

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Question # 45

Girish is 25 years old and plans to retire at 60. His life expectancy is 75 years. Mr. Binoy his CWM® estimates that his client will require Rs. 45,000 in the first month after retirement. Inflation rate is 5% p.a. and the rate of return is 7% p.a. How much she should save every year in order to achieve her post retirement needs?

A.

Rs. 61,193/-

B.

Rs. 65,384/-

C.

Rs. 50,932/-

D.

Rs. 62,359/-

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Question # 46

Purpose of budget is ____________

A.

Spend money wisely

B.

Reach financial goals

C.

Prepare for financial emergencies

D.

All of the above

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Question # 47

A Family consists of karta, his wife four sons and their wires and children and its income is Rs. 1000000 if by family arrangement income yield property is settled on karta his wife and sons & daughter in law than tax liability would be

A.

Nil

B.

100000

C.

Calculated as per income tax Act 1961

D.

None of the above

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Question # 48

In case of a defined benefit plan where the benefit payable is based on the terminal salary, an increase in of 10% of the wages of the employees would increase the contribution to be made by the employer for the benefit by

A.

10% of the earlier level of contribution

B.

More than 10% of the earlier level of contribution

C.

Less than 10% of the earlier level of contribution

D.

Can be any of the above

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Question # 49

The employer had purchased a car for Rs. 3,00,000 which was being used for official purposes. After 2 year 6 months of its use, the car is sold to R, the employee, for Rs. 1,20,000. The value of this perquisite shall be

A.

Rs. 72,000

B.

Rs. 60,000

C.

Nil

D.

Rs. 1,23,000

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Question # 50

Derive policy cost per thousand with following data:

A.

30

B.

22.75

C.

12.5

D.

29.85

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Question # 51

Mr. Bharat sees a stock with a beta of 1.2 selling for Rs. 25 and price will move up to Rs. 31 by the end of the year. The risk free rate is 6% and the expected market return is 15 %. In this scenario Mr. Bharat would like to know whether the stock is _____________ and so should ___________.

A.

Overpriced, buy it.

B.

Overpriced, sell it.

C.

Under priced, buy it.

D.

Under priced, sell it.

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Question # 52

Mukul purchased a flat on 1-4-1996 for Rs. 10,00,000/-. He sells the same flat on 1-10-2006 for Rs. 25,00,000/-. Please calculate the Indexed Cost of Acquisition on which capital gain would be calculated. (The CII of year 1995-96 is 281, for year 1996-97 is 305, for year 2005-06 is 497 and for year 2006-07 is 519).

A.

17,85,129

B.

17,26,175

C.

17,01,639

D.

17,45,508

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Question # 53

Dinesh has opened his PPF account on 19/11/1999, Calculate the amount he can avail as the first withdrawal facility from the details below?

A.

Rs 274555.

B.

Rs 120536

C.

Rs 125897

D.

Rs 115745

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Question # 54

Mr. Subhash Bansal, a marketing manager is employed with IMFB limited. He took an advance of Rs. 1,20,000 against the salary of Rs. 30,000 per month in the month of March 2007. The gross salary of Mr. Adhikari for the assessment year 2007-08 shall be:

A.

Rs. 3,60,000

B.

Rs. 4,80,000

C.

Rs. 2,40,000

D.

Rs. 3,80,000

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Question # 55

Case: The returns of 2 shares are as follows

Calculate the covariance of returns.

A.

220.32

B.

–420.11

C.

162.08

D.

270.36

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Question # 56

If, C=Rs.240 million, I = Rs.20 million, G = Rs.90 million, X = Rs.50 million M = Rs.80 million Calculate the value of GDP?

A.

Rs.280 million

B.

Rs.320 million

C.

Rs.300 million

D.

Rs.340 million

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Question # 57

The holding period return on a stock was 30%. Its ending price was Rs.26 and its cash dividend was Rs.1.50. Its beginning price must have been __________.

A.

Rs.20.00

B.

Rs.21.15

C.

Rs.86.67

D.

Rs. 91.67

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Question # 58

Ranbir deposits Rs. 80000 as a lump sum amount in a immediate annuity. He will receive annuity on a monthly basis for next one year. Determine the monthly amount he is entitled to receive. The rate of interest is 15%

A.

Rs 7221

B.

Rs 7122

C.

Rs 7321

D.

Rs 7425

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Question # 59

Calculate the Paid up Value ( PV) under a policy with the following particulars

A.

Rs. 8,000

B.

Rs. 17,750

C.

Rs. 20,000

D.

Rs. 25,000

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Question # 60

The shares of Alpha were bought on Jan 1 for Rs 110/-. During the year Alpha paid a dividend of Rs 2/- per share. At the end of the year, share of Alpha was sold for Rs 115/- What is the total return on Alpha?

A.

4.36%

B.

6.36%

C.

7%

D.

8.42%

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Question # 61

A ………………… mortgage is a mortgage which does not fully amortize over the term of the note thus leaving a balance due at ……………..

A.

Reverse, Maturity

B.

Simple, transfer

C.

Balloon payment, maturity

D.

Equitable, maturity

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Question # 62

Portfolio A had a return of 12% in the previous year, while the market had an average return of 10%. The standard deviation of the portfolio was calculated to be 20%, while the standard deviation of the market was 15% over the same time period. If the correlation between the portfolio and the market is 0.8, what is the Beta of the portfolio A?

A.

0.94

B.

1.07

C.

1.31

D.

1.91

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Question # 63

Spot Nifty is at 5000. One month Nifty call with strike price of Rs. 4800 is trading at Rs. 250 per call. An investor buys 100 Nifty calls. At expiry Nifty closes at 5500. Net profit / loss of the investor is Rs. ___.

A.

50000

B.

-50000

C.

45000

D.

-45000

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Question # 64

CAMELS framework was first used in _______.

A.

UK

B.

Canada

C.

India

D.

US

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Question # 65

A stock caries the following returns over a five year period:

A.

Calculate the following:

B.

Arithmetic mean return,

C.

Cumulative wealth index &

D.

Geometric mean return.

E.

11.5%, 1.4557, 18.61%

F.

11.2%, 1.5557, 10.25%

G.

11.2%, 1.3457, 10.51%

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Question # 66

What is the surrender value, if the sum assured is Rs. 100,000/-, DOC is 01/01/1997, endowment with profit 25 years, due date of last premium paid 01/01/2010. Premium to be paid semi-annually. Accrued bonus is 500 per thousand of SA. Surrender value factor is 19% ?

A.

23750

B.

21565

C.

15010

D.

12825

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Question # 67

Mr. Aakash Jain has invested Rs. 85,000/- @ 6% p.a. in a bank deposit on 15th May 2007. After 10 years of investment rate of interest changes to 8 % p.a. computed half yearly. Further after 5 years rate of interest again changes to 7% p.a. compounded quarterly. After further 3 years rate of interest again changes to Rs. 7% pa compounded monthly. What will Mr. Jain get after 23 years (14th May 2030) assuming the date of commencement is now?

A.

Rs. 4,05,421/-

B.

Rs. 3,77,476/-

C.

Rs. 3,93,355/-

D.

Rs. 3,85,324/-

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Question # 68

Mr.Rajesh ,35 years old sole business consultant of “Oriental Décor Import”California , USA. He arranges Indian Handicraft Products in India as per “Oriental Décor Import” orders. He earns 5% commission on goods purchased by “Oriental Décor Import”. The “Oriental Décor Import” has invited him in USA for inauguration of their 21 chain stores In USA and Europe and he has to expect to say long for providing Indian Handicraft Product Training to all staffs of the Company working in different chain stores. As a Chartered Wealth Manager he comes to you to plan his journey in such a manner so that he can get maximum tax benefits in the assessment Year 2010–11 from the residential status point of view. In the year 2008–09 was present in India only 80 days. What is the latest date when he can afford to leave India to get maximum tax benefits in the said assessment year?

A.

On 06-10-2009

B.

On 01-10-2009

C.

On 28-09-2009

D.

On 25-09-2009 and return India before 25-03-2010

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Question # 69

Pushkar completed the construction of a house property on 14.8.2008 with borrowed capital of Rs.800000 @ 12%. The loan was taken on 1.4.2006 and is still outstanding. The house was used for his own residence during the entire FY 10-11. Deduction U/S 24(B) for interest on borrowed capital for FY shall be

A.

150000

B.

30000

C.

96000

D.

134400

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Question # 70

Shri Ganjarwala Charitable Trust (Regd.) submits the particulars of its income/outgoing for the previous year 2009-2010 as below:

The trust spends Rs 2,77,500 during the previous year 2009-2010 for charitable purposes. In respect of Rs 5,20,000, it has exercised its option to spend it within the permissible time-limit in the year of receipt or in the year, immediately following the year of receipt.

The trust spends Rs 2,00,000 during the previous year 2009-2010 and Rs 1,00,000 during the previous year 2010-2011.

Compute the tax payable on the income of the trust.

A.

2080

B.

2160

C.

2060

D.

2200

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Question # 71

The information about 3 stocks is provided below:

Assuming that the required rate of return on investment is 14%, what maximum price an investor should be willing to pay and Which Stock should he buy?

A.

Rs. 23.15/-, Rs. 47.50/-, Rs.70.45/- , Share C

B.

Rs. 15.29, Rs. 43.71, Rs. 63.64, None

C.

Rs. 15.29, Rs. 22.50, Rs. 49.50, Share B and C

D.

Rs. 16.36, Rs. 49.67, Rs. 69.75, Share B only

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Question # 72

Mr. Patel expects the stock of A to sell for Rs. 70/- a year from now and to pay Rs. 4/- dividend. If the stock’s correlation with the Market is –0.3, and the standard deviation of A is 40% and standard deviation of the Market is 20% and the risk free rate of return is 5% and the market risk premium is 5% , what would be the price of stock A be now ?

A.

74

B.

73.65

C.

72.55

D.

75.65

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Question # 73

Sunil, aged 33 years, is having a policy of Rs. 1 Lac sum assured and is paying premium of Rs. 1,800/- for the last 10 years. The cash surrender value of this policy is at the end of previous year was Rs. 20,000. It is estimated that by this year end, the cash surrender value of this policy would be Rs. 22,900.

There is another term insurance of sum assured of Rs. 80,000 costs Rs. 300/- per annum which is available to him . If rate of interest is 6%, then first calculate the CPT of existing and new policy respectively and then advise Sunil if it is better to continue this policy or to discontinue it?

A.

2.69 ,3.77.Continue this policy

B.

3.45,4.33.Continue this policy

C.

3.19 ,2.89.Discontinue this policy

D.

4.13 ,3.97.Disontinue this policy

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Question # 74

Saurabh contributes Rs. 10,000 every year starting from the end of the 5th year from today till the end of 12th year in the account that gives a ROI of 7.75% p.a. compounded half yearly. Calculate the Present Value of his contribution today.

A.

39441

B.

39800

C.

42557

D.

36500

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Question # 75

A stock earns the following returns over a five year period:

What is the standard deviation of returns for the stock?

A.

22.24

B.

21.38

C.

26.71

D.

24.62

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Question # 76

Mr. Munjal has got her daughters son admitted to a dental college today, where he has to pay a fee of Rs. 1.5 Lac today i.e. at the time of admission. Then Rs. 1.75 lacs after 1 year, Rs. 2.5 lacs after 2 years and Rs. 3.25 lacs after 3 years. He wants to set aside the amount required today itself in the form of a Bank FDR.So how much he needs to put aside today if ROI is 8% for 1 year, 8.5% for 2 years and 9% for 3 years, all compounded Quarterly?

A.

Rs. 7,71,807.05

B.

Rs. 7,81,911.05

C.

Rs. 8,93,541.07

D.

Rs. 8,51,657.10

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Question # 77

Mr. John purchased a house in Mumbai in March 2010 for Rs.12,50,000. In April,2011 he entered into an agreement to sell the property to Mr. Akram for a consideration of Rs.19,75,000 and received earnest money of Rs. 50,000. As per the terms of the agreement, the balance payment was to be made within 30 days of the agreement. If the intending purchaser does not make the payment within 30 days, the earnest money would be forfeited. As Mr. Akram could not make the payment within the stipulated time the amount of Rs.50000 was forfeited by John. Subsequently John sold the house in June, 2011 for Rs.2130000. He paid 2% brokerage on sale of the house. Calculate the capital gains chargeable to tax for the assessment year 2012-13. [CII-12-13: 852,11-12: 785,10-11:711]

A.

659322

B.

887400

C.

689536

D.

692556

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Question # 78

Your client, a businessman has a house worth Rs. 2.1 crore and a farm house worth Rs. 85 lakh. His business is worth Rs. 10 crore as per last balance sheet. He has two other partners in the business having stakes of 24% each. He has two cars purchased at Rs. 40 lakh and Rs. 20 lakh, the latter being in personal account. The cars have depreciated/market value at Rs. 30 lakh and Rs. 8 lakh, respectively. His joint Demat account, wife being primary holder, has stocks worth Rs. 1.65 crore. The business has taken Keyman‟s insurance on his life of value Rs. 1.5 crore. He has himself insured his life for an assured sum of Rs. 1.5 crore. You evaluate your client’s estate in case of any exigency with his life as _____.

A.

Rs. 8.20 crore

B.

Rs. 9.56 crore

C.

Rs. 10.51 crore

D.

Rs. 5.73 crore

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Question # 79

The probability distribution of the rate of return on ABC stock is given below:

What is the standard deviation of return?

A.

11.40%

B.

12.90%

C.

10.50%

D.

13.50%

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Question # 80

The expected return and standard deviations of stock A & B are:

Amit buys Rs.20,000 of Stock A and sells short Rs.10,000 of Stock B using all the Proceeds to buy more or Stock A. The correlation Between the two securities is .35. What are the expected return & standard deviation of Amit’s portfolio?

A.

3.5%, 15.5%

B.

8.8%, 7.03%

C.

20%, 14.5%

D.

9.8%, 15.6%

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Question # 81

You want to take a trip overseas which costs Rs. 10 lacs. The cost is expected to remain unchanged in nominal terms. You can save annually Rs. 50000 to fulfill the desire. How long will you have to wait if your savings earn an interest rate of 12%?

A.

10.79 years

B.

11.00 years

C.

11.23 years

D.

10.99 years

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Question # 82

The following information regarding the equity shares of M/s V Ltd. is given

Calculate the EPS of M/s V Ltd. according to the traditional approach

A.

Rs. 22.50

B.

Rs. 26.00

C.

Rs. 30.00

D.

Rs. 27.00

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Question # 83

From the following data on mutual funds, Calculate the Sharpe Ratio.

Risk free return is 8%.

A.

0.78,1.08,0.55

B.

0.78,1.05,0.59

C.

0.98,1.33,0.75

D.

0.71,1.11,0.55

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Question # 84

Sonia works at the post office. She deposits Rs. 1000 on every birthday into a retirement plan which paid an interest rate of 8% from the age of 20 years until she retired. If she had Rs. 260000 in her retirement plan when she retired, at what age did she retire?

A.

55

B.

60

C.

59

D.

57

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Question # 85

Ms. Sonali Briganza is 22 years old. She is currently earning a salary of Rs.5,00,000/- per annum and saves 20% of her salary every year. If her salary increases by 10% every year and she is able to get a return of 11% p.a. compounded annually throughout her investment horizon what would be the corpus of funds available at her age 58.?

A.

119056000

B.

117056000

C.

129056000

D.

139056000

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Question # 86

Risk free rate = 6%

Rank the funds based on Jenson Measure in order of best to worst.

A.

CBA

B.

ACB

C.

ABC

D.

BAC

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Question # 87

Which of the following statements is/are correct?

A.

Only (i)

B.

Only (i) & (ii)

C.

Only (i) & (iii)

D.

All of the above

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Question # 88

Akash owns a piece of land situated in Kolkata ( Date of acquisition : March 1, 1983, Cost of acquisition Rs. 20,000/- value adopted by Stamp duty authority at the time of purchase Rs. 45,000/-) On March 30, 2012 the piece of land is transferred for 4 lakh. Find out the capital gains chargeable to tax if the value adopted by the Stamp duty authority is 5.75 lakh. And X files an appeal under the Stamp Act and Stamp duty valuation has been reduced to Rs. 4.90 lakh by the Kolkata High Cout. [CII-12-13: 852,11-12: 785,10-11:711]

A.

Rs. 4,05,963/-

B.

Rs. 3,45,963/-

C.

Rs. 3,80,963/-

D.

Rs. 4,15,963/-

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Question # 89

Which of the following option illustrates an advantage of the probate process?

A.

(i) only

B.

(ii) and (iii)

C.

(ii), (iii) & (iv)

D.

(i), (ii), (iii) & (iv)

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Question # 90

What amount needs to be deposited today in an account that would pay Rs. 1,10,000 per year for the first 10 years and Rs. 2,25,000 for the next 5 years. If the ROI for the first 10 years if 10.75 % p.a. compounded annually and 13% p.a. compounded quarterly for the balance period.?

A.

779030

B.

912336

C.

935282

D.

995282

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Question # 91

Mr.Singhvi is a senior manager in a advertising firm in Mumbai. During the previous year 2011-12, he gets the following emoluments: Basic salary Rs.30, 000 per month, dearness allowance: 10% of basic salary, city compensatory allowance: Rs.300 per month, children education allowance:Rs.500 per month (for 3 children), house rent allowance: 20% of salary (rent paid Rs.2000 per month).

He gets Rs. 21,000 as a reimbursement from his employer in respect of medical expenditure incurred on treatment of his wife in a private clinic. Besides, he gets Rs.12, 400 as reimbursement from the employer in respect of books and journals purchased by him in discharging his official work. He contributes 11% of his salary to statutory provident fund to which a matching contribution is made by the employer. During the year, he spends Rs.15, 000 for maintaining a car for going to the college.

Determine his net income under the head of salaries.

A.

426600

B.

417600

C.

515600

D.

528600

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Question # 92

Dhruv contributes Rs. 25,000 every year starting from the beginning of the 4th year from today till the begning of 12th year in the account that gives a ROI of 11.40% p.a. compounded half yearly. Calculate the Present Value of his contribution today.

A.

96522

B.

107840

C.

97907.72

D.

101452

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Question # 93

Management has recently announced that expected dividends for the next three years will be as follows:

For the subsequent years, management expects the dividend to grow at 5% annually. If the risk-free rate is 4.30%, the return on the market is 10.30% and the firm’s beta is 1.40. What is the maximum price that you should pay for this stock?

A.

Rs. 167.25

B.

Rs. 41.38

C.

Rs. 165.45

D.

Rs. 168.86

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Question # 94

Given the following information:

What is the expected return and standard deviation of the portfolio if 50% of funds invested in each stock? What would be the impact if the correlation coefficient were 0.6 instead of 0.2?

A.

18%, 0.456, 0.312

B.

16%, 0.398, 0.296

C.

16%, 0.314, 0.273

D.

19%, 0.429, 0.316

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Question # 95

R purchased a house property for Rs. 26,000 on 10-5-1962. He gets the first floor of the house constructed in 1967-68 by spending Rs. 40,000. He died on 12-9-1978. The property is transferred to Mrs. R by his will. Mrs. R spends Rs. 30,000 and Rs. 26,700 during 1979-80 and 1985-86 respectively for renewals/reconstruction of the property. Mrs. R sells the house property for Rs. 11,50,000 on 15-3-2007, brokerage paid by Mrs. R is Rs. 11,500. The fair market value of the house on 1-4-1981 was Rs. 1,60,000. Find out the amount of capital gain chargeable to tax for the assessment year 2007-08.

A.

308100

B.

215410

C.

169527

D.

203910

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Question # 96

You are considering investing in following bond:

Your income tax rate is 34 percent and your capital gains tax is effectively 10 percent. Capital gains taxes are paid at the time of maturity on the difference between the purchase price and par value. What is your approximate post-tax yield to maturity on this bond?

A.

10.91%

B.

11.38%

C.

9.07%

D.

11.78%

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Question # 97

Which one of the following statements is/are correct?

A.

(i) only

B.

(ii) only

C.

Both are wrong

D.

None of the above

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Question # 98

Which of the following statement is true?

A.

Statement I & II is false.

B.

Statement I is false & II is true.

C.

Statement II is true.

D.

Both statements are true.

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Question # 99

Calculate the total maturity amount payable in a policy of Rs. 4,00,000/-, if the term of the policy was 17 years and bonus was Rs. 52 per thousand per annum and a final bonus of Rs. 125/- per thousand was payable?

A.

Rs. 745123

B.

Rs. 723231

C.

Rs. 698235

D.

Rs. 803600

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Question # 100

A country has an “absolute advantage” in two products with respect to another country. Can it gain by trading with the other country?

A.

No

B.

Yes, if the other country has comparative advantage in one particular product

C.

Yes, under all circumstances

D.

None of the above

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Question # 101

Rakesh owes Rs. 10000 to Haresh who transfers the debt amount to Chirag. Haresh then demands the same from Rakesh, who does not have a notice of the transfer as per section 131 but still pays to Haresh. This payment is invalid &Chirag can sue Rakesh for the debt

A.

TRUE

B.

FALSE

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Question # 102

PPF is a

A.

Mandatory program for every employee

B.

Mandatory for every Income Tax assessed

C.

Self directed retirement program

D.

None of the above

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Question # 103

What would be the taxable value added in Dr. Vijay Mohan’s income for Gratuity receipt of Rs. 8,00,000 at the time of retirement. He is covered under the Payment of Gratuity Act 1972. He retired after 28 years of service with monthly salary of Rs. 40000 p.m. Assume Income Tax provisions pertaining to AY 2011-12 would be applicable at the time of retirement?

A.

Rs. 3,50,000

B.

Rs. 2,40,000

C.

Rs. 5,60,000

D.

Rs. 1,53,146

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Question # 104

An employee benefit plan can generally help in accomplishing all of the following items except:

A.

Meet a need that cannot otherwise be met (such as providing for the cost of a serious illness)

B.

Provide unique tax benefits (such as funding a qualified retirement plan without current taxation of the plan contributions to the employee)

C.

Eliminate underwriting requirements on any personally purchased life insurance

D.

Encourage the employee to remain with the employer

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Question # 105

The income of any university or other educational institution existing solely for educational purposes and not for the purposes of profit is exempt under clause (iiiad) of Section 10(23C) if the aggregate annual receipts’ of such univer­sity or educational institution do not exceed.

A.

Rs.100 crores,

B.

Rs.1 crore,

C.

Rs. 10 crores,

D.

Rs. 10 lakhs

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Question # 106

If the reserve ratio is 5%, what is the size of credit multiplier?

A.

10

B.

15

C.

20

D.

25

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Question # 107

Purpose of budget is ____________

A.

Spend money wisely

B.

Reach financial goals

C.

Prepare for financial emergencies

D.

All of the above

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Question # 108

Ram is working in Rashid Enterprises, a proprietorship firm.During his working hours Ram was injured seriously. Due to this injury Ram was hospitalized for six months. Ram is the only bread winner of his family. Ms. Rashid, the proprietor of Rashid Enterprises is liable to pay damages to Ram. Under which of the following policy Rashid can protect himself from this liability?

A.

The Directors’ and officers liability policy

B.

Key Person Life Insurance Policy

C.

Product Liability Insurance

D.

Employer’s Liability Insurance Policy

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Question # 109

Sunil insured the building of his house for a sum of Rs.500000 against fire insurance. One day the house is totally gutted in a devastating fire. The insurance surveyors certified that the building is a total loss with no salvage value and that the insurable value of the building just prior to the loss was Rs.1000000. The insurer will pay to Sunil:

A.

Rs.1000000

B.

Rs.250000

C.

Rs.500000

D.

Nil

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Question # 110

Financial markets have the basic function of

A.

bringing together people with funds to lend and people who want to borrow funds.

B.

assuring that the swings in the business cycle are less pronounced.

C.

assuring that governments need never resort to printing money.

D.

both (A) and (B) of the above.

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Question # 111

Overseas Medical Policy (OMP) covers medical expenses and repatriation expenses upto a maximum of _________ while under Overseas Travel Insurance the same is a maximum of __________.

A.

US$- 2,00,000 & US$- 5,00,000

B.

US$- 1,00,000 & US$-5,00,000

C.

US$- 1,00,000 & US$- 2,00,000

D.

US$- 1,00,000 & US$- 3,00,000

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Question # 112

Which of the following Mutual Funds was not set up within the Phase 2: 1987-1993 ?

A.

Canbank Mutual Fund

B.

Kothari Pioneer Mutual Fund

C.

SBI Mutual Fund

D.

LIC Mutual Fund

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Question # 113

Security A has a standard deviation of 23% and the market has a standard deviation of 18%. The correlation coefficient r between Security A and the market is 0.80. What is the % of the change in Security A can be explained by changes in the market?

A.

80%

B.

50%

C.

36%

D.

64%

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Question # 114

Which of the following is/are the neccessary contents of a will?

A.

I ,II and III

B.

I , III and IV

C.

I, II and IV

D.

All of these

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Question # 115

A client has a minor child she is concerned about what might happen if she was to die while the child was still young and unable to sensibly handle a sizeable in heritance one solution could be to draft her will so that the child receives the asset once reaching age 21 this is an example of

A.

A discretionary trust

B.

A testamentary trust

C.

An inter vivo trust

D.

A family trust

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Question # 116

Ramesh living in Kolkata is a trustee for Brijesh living in Mumbai, Ramesh remits trust funds to Brijesh by bills drawn by a person of high creditworthiness in favor of the trustee as such and payable at Mumbai. The bills later got dishonored. Is Ramesh bound to make good the loss?

A.

Yes

B.

No

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Question # 117

An assessee was allowed deduction of unrealized rent to the extent of Rs. 40,000 in the past although the total unrealized rent was Rs. 60,000. He is able to recover from the tenant Rs.45,000 during the previous year on account of such unrealized rent. He shall be liable to tax to the extent of:

A.

Rs. 45,000

B.

Nil

C.

Rs. 25,000

D.

Rs. 35,000

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Question # 118

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

A.

222

B.

220

C.

182

D.

180

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Question # 119

Which of the following statements is/ are correct?

A.

I II and III

B.

IIand IV

C.

I,III and IV

D.

All statements are true

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Question # 120

An investor investing Rs. 7,282.58 on March 1, 2012 and getting Rs. 10,000 back on February 28, 2017 would have a yield to maturity (YTM) of _____%.

A.

6.58

B.

6.55

C.

6.61

D.

6.64

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Question # 121

Which of the following is an aspect of the first principle underlying Supervisory Review Process in Basel framework?

A.

Banks should have a process for assessing their overall capital adequacy in relation to their risk profile.

B.

Banks should have a strategy to maintain their capital level.

C.

Both of the above.

D.

None of the above. The act does not define a banking company.

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Question # 122

What an employee should check in his retirement benefit plan offered by the employer?

A.

His vesting rights

B.

His retirement age

C.

His contributory obligations

D.

All of the above

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Question # 123

Profitability Index is

A.

Present value of future cash flows / present value of initial investment

B.

Present value of future cash flows / future value of initial investment

C.

Future value of cash flows / present value of initial investment

D.

None of the above

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Question # 124

Which of the following statements in reference to REPO Rate is/are correct?

A.

I, II and III

B.

I and II

C.

I, III and IV

D.

II,III and IV

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Question # 125

Which of the following statements is/are not true?

A.

Only (I) above

B.

Only (II) above

C.

Both (I) and (III) above

D.

Both (II) and (IV) above.

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Question # 126

Calculate Gross Annual Value where Gross Municipal Value is Rs.120, Fair Rent is Rs.105. Actual rent receivable is Rs.100& Standard Rent is Rs.125

A.

Rs.120

B.

Rs.100

C.

Rs.105

D.

Rs.125

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Question # 127

A project should be considered if the Profitability Index is

A.

Less than 1

B.

More than 1

C.

More than to 0.5

D.

None of the above

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Question # 128

During last five years, Mr. Saxena owned securities that gave the following annual rate of return:

Which is the preferable security as per Geometric mean annual rate of return?

A.

Security A

B.

Security B

C.

Both are equally preferable

D.

None of the above

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Question # 129

According to the capital asset pricing model, the expected rate of return on any security is equal to __________.

A.

[(the risk-free rate) + (beta of the security)] x (market risk premium)

B.

(the risk-free rate) + [(variance of the security's return) x (market risk premium)]

C.

(the risk-free rate) + [(security's beta) x (market risk premium)]

D.

(market rate of return) + (the risk-free rate)]

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Question # 130

Notice of loss should be given to the insurer within ________days of the event of loss.

A.

30

B.

15

C.

7

D.

21

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Question # 131

Mutual funds in India are required by SEBI to

A.

prohibit their employees from personal trading in secondary markets

B.

allow all employees to trade freely in secondary markets without restrictions

C.

establish a code of conduct and allow employees to do personal trading that conforms to SEBI guidelines

D.

allow employees to carry on personal trading as long as they abide by SEBI regulations

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Question # 132

If a female dies without leaving any issue them property inherited from her father or mother the property will devolve upon

A.

Heirs of her father

B.

Heirs of her mother

C.

Heirs of her husband

D.

Heirs of her father in law

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Question # 133

Surender the driver causes injuries to a pedestrian by rash driving of car. The injured victim had to spend Rs.1000 in treating his injuries. Surender ‘s act has created liabilities under

A.

Common law

B.

Contract

C.

Statue and Common law

D.

Statute only

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Question # 134

Which school is prevalent all over India

A.

Dayabhaga

B.

Mitakshara

C.

Both

D.

None of the above

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Question # 135

Multi period hedging is ________

A.

A way to manage qualitative risk over time

B.

A way to manage market risk over time

C.

A way to manage sentimental risk over time

D.

None of the above

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Question # 136

What is codicil?

A.

Legal document used to transfer little of real property in the eyes of law

B.

Legal process of settling of disputes arising out of untimely death

C.

A situation where a person dies without a will

D.

Is a document that amends, rather than replaces, a preciously executed will

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Question # 137

A muslim gentleman can leave his will, bequeathing all his properties to someone often than his legal heirs to the extent of…………….

A.

His wish

B.

A small portion

C.

One third

D.

One half

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Question # 138

Which of the following is true of Reverse Repo rate?

A.

Determined by free market forces

B.

Lower than repo rate

C.

benchmark for long term rates

D.

Part of funding cost for commercial banks

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Question # 139

Which of the following assets not included in calculating wealth tax?

A.

Commercial buildings

B.

Residential

C.

A farm situated 40 km far from local limits of any municipality or a cantonment Board

D.

Any guest house

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Question # 140

Which one of the following sections of the Transfer of Property Act, defines ’Notice’

A.

Section 2

B.

Section3

C.

Section 5

D.

Explanation H of Section 3

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Question # 141

Compute Geometric mean return for an investment with the following per period return – 8.9%, 10%, 7.7%, 13%?

A.

7.75%

B.

8.59%

C.

9.88%

D.

9.50%

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Question # 142

If any expenditure is incurred by an Indian company wholly and exclusively for the purpose of amalgamation or demerger, the said expenditure is

A.

Not allowable as a deduction in computing profits and gains of business or profession.

B.

Fully deductible as revenue expenditure in the year in which it is incurred.

C.

Not deductible but is eligible to be treated as an intangible asset in respect of which depreciation can be claimed.

D.

Allowed as a deduction spread over five successive previous year beginning with the previous year in which the amalgamation or demerger takes place.

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Question # 143

What is ‘Takaful’

A.

Power Attorney

B.

Safe keeping

C.

Islamic insurance

D.

Leasing

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Question # 144

Which of the following is/are the challenges of Private Banking?

A.

I, II and III

B.

I,III and IV

C.

I, II and IV

D.

All of Them

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Question # 145

"When a customer deposits cheque with a bank for clearing, the customer becomes a _______."

A.

Debtor

B.

Principal

C.

Creditor

D.

Agent

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Question # 146

_______ is an Over the Counter market

A.

Equity

B.

Debt

C.

Forex

D.

None of the above

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Question # 147

When Government spends more than what it earns, the difference is called...............

A.

Monetary Deficit

B.

Revenue Deficit

C.

Budget Deficit

D.

Revenue Receipt

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Question # 148

The market risk premium is defined as ___________

A.

the difference between the return on an index fund and the return on Treasury bills

B.

the difference between the return on a small firm mutual fund and the return on the Standard and Poor's 500 index

C.

the difference between the return on the risky asset with the lowest returns and the return on Treasury bills

D.

the difference between the return on the highest yielding asset and the lowest yielding asset.

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Question # 149

NRIs can purchase KisanVikasPatra

A.

TRUE

B.

FALSE

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Question # 150

The provision of fraudulent transfer is given in-

A.

Section 49 of the Transfer of Property Act, 1882

B.

Section 50 of the Transfer of Property Act, 1882

C.

Section 51 of the Transfer of Property Act, 1882

D.

Section 53 of the Transfer of Property Act, 1882

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Question # 151

Any property inherited by a female Hindu from her husband or from her father in law, in the absence of any son or daughter of the deceased shall go to…..

A.

Heir of mother

B.

Heir of father

C.

Heir of Husband

D.

Heir of Sister

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Question # 152

A mortgage where the mortgagor delivers possession and binds himself to deliver possession of the mortgaged property to the mortgagee is called?

A.

English Mortgage

B.

Reverse Mortgage

C.

Usufructuary Mortgage

D.

Mortgage by conditional sale

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Question # 153

The following is not ‘plant’ u/s 43(3) of the Income-Tax Act, 1961

A.

Books

B.

Know-how

C.

Road in the factory building

D.

Electrical fittings

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Question # 154

A ____________ mortgage binds himself to repay the mortgage money on a certain data transfer the mortgaged property absolutely to the mortgager.

A.

Anomalous mortgage

B.

English mortgage

C.

Reverse mortgage

D.

Usufructuary mortgage

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Question # 155

What is not the basic ingredient of a valid trust?

A.

There must be a trustee

B.

There must be a beneficiary or beneficiaries

C.

There must be clearly delineated trust property

D.

The object of the trust must not be specific

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Question # 156

"Between the four items - Deposits; Borrowings; Reserves & Surplus; and Capital, which would appear last in the balance sheet of a bank?"

A.

Borrowings

B.

Deposits

C.

Reserves & Surplus

D.

Capital

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Question # 157

Bond price is inversely related to yields

A.

TRUE

B.

FALSE

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Question # 158

Garnishee order is issued by:

A.

Income Tax Authorities

B.

Court

C.

Bank

D.

SEBI

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