Free Practice AAFM CWM_LEVEL_2 Exam Questions 2025

Section C (4 Mark)

Tom dies in January of the current year and leaves his wife Jeanne a $50,000 insurance policy. Jeanne elects to receive the proceeds at $10,000 per year plus interest, for five years. In the current year, she receives $12,000 ($10,000 plus $2,000 interest).

How much must Jeanne include in her gross income?

Section A (1 Mark)

Convertible bond arbitrage is to event driven as _________ is to corporate restructuring.

Section B (2 Mark)

Reliance Ltd. has issued a preferred stock that pays Rs.10 per share. The dividend is fixed and the stock has no expiration date. What is the intrinsic value of Reliance Ltd. stock, assuming a discount rate of 14%?

Section B (2 Mark)

Ramesh living in Kolkata is a trustee for Brijesh living in Mumbai, Ramesh remits trust funds to Brijesh by bills drawn by a person of high creditworthiness in favor of the trustee as such and payable at Mumbai. The bills later got dishonored. Is Ramesh bound to make good the loss?

Section A (1 Mark)

Trading horizon is ______________