CWM_LEVEL_2 Practice Online

Question 1

Section B (2 Mark)

If a portfolio manager has a good ability to select undervalued securities but a poor ability to forecast overall market, the following makes sense for him:

A : Concentrate holdings in selected undervalued stocks and shift beta below and above the desired long-term average based on market forecasts

B : Hold a broadly diversified portfolio of stocks and keep beta stable at the desired long-term average

C : Concentrate holdings in selected undervalued stocks and keep beta stable at the desired long-term average

D : Hold a diversified portfolio of stocks and shift beta above and below desired long-term average based on market forecasts

Answer: C

Question 2

Section B (2 Mark)

Asset allocation policy

A : I and II

B : I and III

C : II and III

D : None of the above

Answer: D

Question 3

Section B (2 Mark)

The price of Sunder Ltd. is currently Rs. 40. The dividend next year is expected to be Rs. 4. Required return on the stock is 12%. Find the expected growth rate under the constant growth model.

A : 3%

B : 4%

C : 2%

D : 5%

Answer: C

Question 4

Section A (1 Mark)

____________ may be responsible for the prevalence of active versus passive investments management.

A : Forecasting errors

B : Overconfidence

C : Mental accounting

D : Conservatism

Answer: B

Question 5

Section A (1 Mark)

A type of investor who is willing to risk his own capital and give up security to gain wealth is known as:

A : Active Accumulator

B : Independent Individualist

C : Friendly Follower

D : Passive Preserver

Answer: B

Name:	Chartered Wealth Manager (CWM) Certification Level II Examination
Exam Code:	CWM_LEVEL_2
Certification:	Chartered Wealth Manager
Vendor:	AAFM
Total Questions:	1265
Last Updated:	Feb 21, 2026

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