CWM_LEVEL_2 Exam Dumps : Chartered Wealth Manager (CWM) Certification Level II Examination

Section A (1 Mark)

Debt ratio is

Section C (4 Mark)

Today is 14th February 2008 Mr. Mehta is 29 years old and is salaried. His wife, Nisha is a housewife. He has started depositing Rs. 5,000 at the beginning of each year in an education fund for his new born child.

He is earning a monthly income of Rs. 53000. His expenses are Rs. 27000 p.m. He takes the help of a wealth manager to plan his investments. He has taken housing loan and outstanding amount is Rs. 1000000 and outstanding amount on car loan is Rs. 300000.He is paying an EMI of Rs. 9547 on housing loan and an EMI of Rs. 2600 on car loan at the end of each year.

His other investments are as follows:

Mr. Mehta has joined the services after completing his education five years back. But during the previous year he works for 230 days.

Assumptions

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