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AAFM CWM_LEVEL_2 Exam Question & Answers
(Demo)

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Chartered Wealth Manager (CWM) Certification Level

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II Examination Exam

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Version: 4.0

Question: 1
Section A (1 Mark)

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According to the __________________ if irrational traders cause deviations from fundamental value,
rational traders will often be powerless to do anything about it.

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A. Theory of Limited Arbitrage
B. Equity premium puzzle

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C. Present-biased preferences

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D. Inter Temporal Consumption
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Answer: A
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Question: 2
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Section C (4 Mark)
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Suppose you have a two-security portfolio containing Bonds A and B. The market value of Bond A is
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Rs. 6,000, and the market value of Bond B is Rs4,000. The duration of Bond A is 8.5, and the duration
of Bond B is 4.0. Calculate the duration of the portfolio.
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A. 5.3
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B. 8.2
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C. 6.7
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D. 3.56
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Answer: C

Question: 3
Section B (2 Mark)

Which of the following statements is/are true?

Questions and Answers PDF 3/5

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A. I, II and III
B. I, II and IV

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C. I, III and IV

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D. II, III and IV
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Answer: B
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Question: 4
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Section A (1 Mark)
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The best way to maintain your credit rating is to:

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A. Use credit sparingly.

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B. Pay cash for your purchases.

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C. Repay your debts on time.

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D. Declare a bankruptcy.
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Answer: C
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Question: 5
Section B (2 Mark)

Mr.Neeraj has a portfolio consisting of two stocks A & B has a standard deviation of 5% while stock B
has a standard deviation of 15%. Stock A comprises 40% of the portfolio and stock B consists of 60%.
If the correlation of returns of A and B is 0.5, the variance of return on the portfolio is_______

A. 35
B. 85
C. 94
D. 103
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Questions and Answers PDF 5/5

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