Free Online AAFM CWM_LEVEL_2 Practice Test

Section B (2 Mark)

A stock with a Beta of 0.7 currently priced at Rs 50 is expected to increase in price to Rs 55 by year end and pay Rs 1 as dividend. The expected market return is 15% and the risk free rate is 8%. The stock is:

Section B (2 Mark)

Consider the multifactor model APT with two factors. Portfolio A has a beta of 0.75 on factor 1 and a beta of 1.25 on factor 2. The risk premiums on the factor 1 and factor 2 portfolios are 1% and 7%, respectively. The risk-free rate of return is 7%. The expected return on portfolio A is __________ if no arbitrage opportunities exist.

Section B (2 Mark)

Mr. X gives Rs. 200000 to Mrs. X as gift. She invests in a proprietary concern and incurs a loss of Rs. 40000

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.

Section C (4 Mark)

Read the senario and answer to the question.

Calculate the return on Jogen's investments in SBI Ltd shares.