Investment advisor Certification Exam Sample Question Paper

c. Solvency Ratio

d. Net Worth

1. Current cost is translated into a cost in future using which of the following formulae?

a. P X (1 + i)n

b. P ÷ (1 + i)n

c. P X (1 – i)n

d. P ÷ (1 – i)n

1. Read the following caselet and answer the questions that follow:

Mr. P earns a gross salary of Rs 50,000, including company’s contribution to PF of Rs 5,000; an equal contribution is made by Mr. P. Deductions are made towards loan repayments of Rs 4,000 and investments of Rs 1,000. Mr. P receives Rs 3,000 towards income from past

investments. He spends Rs 7,000 on rent, Rs 11,000 on grocery and Rs 15,000 on other

expenses.

a. What is the net take home salary of Mr. P?

i. Rs 40,000

ii. Rs 35,000

iii. Rs 45,000

iv. Rs 5,000

b. What is the monthly surplus of Mr. P?

i. Rs 5,000

ii. Rs 10,000

iii. Rs 15,000

iv. Rs 16,000

c. What is the monthly savings of Mr. P?

i. Rs 5,000

ii. Rs 10,000

iii. Rs 15,000

iv. Rs 16,000

d. What is the savings ratio of Mr. P?

i. 42.1%

ii. 11.3%

iii. 30.2%

iv. 20.8%

Chapter:4

1. EMI for a loan can be worked out using the _____ function in MS Excel.

a. PV

b. NPV

c. EMI

d. PMT

1. Which of the following depends on the market?

a. Strategic asset allocation

b. Tactical asset allocation

c. Investor risk profile

d. None of the above

1. Read the following caselet and answer the questions that follow:

Ms. T invests Rs 60,000 in a 10% yielding asset, using leverage of 1.4 times. Borrowing was at

9% p.a.

a. How much own funds did Ms. T invest?

i. Rs 35,000

ii. Rs 25,000

iii. Rs 42,857

iv. Rs 17,143

b. How much interest did Ms. T need to pay?

i. Rs 2,250

ii. Rs 5,400

iii. Rs 3,150

iv. Rs 3,500

c. What was Ms. T’s net return?

i. Rs 6,000

ii. Rs 2,850

iii. Rs 3,750

iv. Rs 2,500

d. What was Ms. T’s return on equity?

i. 1%

ii. 10.4%

iii. 10.9%

iv. 11.4%

Chapter:5

1. Which of the following is NOT considered in the calculation of RoI?

a. Realized capital appreciation

b. Periodic interest

c. Expected dividend

d. Unrealized capital appreciation

1. Which of these investments is most likely to be affected by inflation?

a. Real estate

b. Equity shares

c. Bank deposits

d. Gold

1. Which of these investments is seen as riskiest?

a. Investment with low standard deviation

b. Investment with high credit rating

c. Investment with low market volatility

d. Investment with high beta

1. The benefits of diversification in a portfolio is seen in the form of

a. Eliminating risk

b. Maximising returns

c. Guaranteeing returns

d. Enhancing risk adjusted returns

1. Read the following caselet and answer the questions that follow:

Mr. C is a 45 year single earning member of his family with a good income. He is saving for

different financial goals, some of which are due for funding now. He has a home loan and car

loan that he is servicing.

a. How would you best categorize Mr. C’s risk profile?

i. Conservative

ii. Moderate

iii. Liquidity seeker

iv. Aggressive

b. What are the assets that will be most suitable for Mr. C given his situation?

i. Primarily growth with some income-oriented assets

ii. Primarily liquid assets

iii. Primarily growth assets

iv. Combination of liquid and income-oriented assets

c. Mr C. has to park the funds from fixed deposits that have matured for a short period

till it will be used for his daughter’s education. What will you suggest as a suitable

investment option?

i. Large-cap equity, to capture growth but with lower risk

ii. Current account, to enable liquidity

iii. Alternative investments, to increase the corpus

iv. Short-term fixed deposit, to ensure liquidity and some returns

1. Which of the following will define the risk and return features of a mutual fund scheme?

a. Market cycles and portfolio selection

b. Asset class performance and investment style adopted

c. Investment objective and asset class chosen

d. Economic cycle and fund manager expertise