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Free CWM_LEVEL_2: Chartered Wealth Manager (CWM) Certification Level II Examination Exam Questions and Answers
Last updated: February 19, 2025
Examtopics CWM_LEVEL_2: Chartered Wealth Manager (CWM) Certification Level II Examination Prepaway Real Exam Questions and dumps free download
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401-CWM_LEVEL_2: Chartered Wealth Manager (CWM) Certification Level II Examination
#Question
In finance, what does liquidity risk refer to?
A.
Interest rate changes
B.
Business insolvency
C.
Difficulty in converting assets to cash
D.
Market fluctuations
Correct Answer:
C
Liquidity risk refers to the risk that an asset cannot be quickly converted to cash without a significant loss in value.
#Question
Which life event should trigger a review of an financial plan?
A.
All of the above
B.
Changing jobs
C.
Marriage
D.
Buying a new car
Correct Answer:
A
Major life events such as marriage, changing jobs, or purchasing significant assets (like a car) should prompt a review of a financial plan to ensure it aligns with new circumstances.
#Question
What does diversification primarily aim to minimize in an investment portfolio?
A.
Fees
B.
Returns
C.
Taxes
D.
Risk
Correct Answer:
D
Diversification aims to minimize risk in an investment portfolio by spreading investments across different assets or sectors, reducing exposure to any single investment's poor performance.
#Question
In debt management, what is a common risk of using personal loans?
A.
Fixed repayment terms
B.
Low fees
C.
High interest rates
D.
Guaranteed approval
Correct Answer:
C
Personal loans often come with high interest rates, leading to increased overall costs for the borrower and potentially leading to debt cycles.
#Question
What does it mean for a stock to be "liquid"?
A.
Priced significantly
B.
Highly volatile
C.
Guaranteed return
D.
Easy to sell
Correct Answer:
D
A liquid stock is one that can be easily bought or sold in the market without affecting its price significantly due to high trading volume.
#Question
How is an adjustable-rate mortgage (ARM) commonly structured?
A.
Rolling interest
B.
Fixed interest rate
C.
Short duration
D.
Initial fixed-rate period followed by variable rates
Correct Answer:
D
An adjustable-rate mortgage (ARM) typically offers an initial fixed interest rate for a set period, followed by variable rates that adjust based on market indices.
#Question
A client is concerned about increasing inflation eroding their purchasing power. What investment might you recommend?
A.
Fixed income bonds
B.
Real estate
C.
Inflation-protected securities (TIPS)
D.
Cash assets
Correct Answer:
C
Inflation-protected securities (TIPS) are designed to rise in value with inflation, preserving purchasing power for investors concerned about rising prices.
401-CWM_LEVEL_2: Chartered Wealth Manager (CWM) Certification Level II Examination
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FAQ
Q1: What are AAFM India Certification Exams? A: AAFM (American Academy of Financial Management) India Certification Exams are professional examinations that validate expertise in financial planning, wealth management, risk management, and related financial disciplines.
Q2: Why should I pursue AAFM India Certification? A: AAFM India Certification enhances your professional credibility, showcasing your skills and knowledge in financial management, which can lead to better job opportunities, higher salaries, and career advancement.
Q3: What are the benefits of AAFM India Certification? A: Benefits include recognition as a certified financial expert, improved job performance, access to exclusive resources, and the ability to stay current with the latest financial strategies and practices.
Q4: Who should take AAFM India Certification Exams? A: Financial professionals, wealth managers, risk managers, investment advisors, and anyone involved in financial planning or management should consider these certifications to validate their expertise and advance their careers.
Q5: What types of AAFM India Certification Exams are available? A: AAFM India offers various certification paths such as Chartered Wealth Manager (CWM), Chartered Financial Goal Planner (CFGP), and Chartered Risk Analyst (CRA), each tailored to specific roles and expertise levels.
Q6: How do I prepare for AAFM India Certification Exams? A: Preparation can include official AAFM India training programs, study guides, practice exams, and hands-on experience in financial management and planning.
Q7: Where can I take AAFM India Certification Exams? A: AAFM India Certification Exams can be taken at authorized testing centers across India, providing flexibility to fit your schedule and location.
Q8: How do AAFM India Certifications impact my career? A: AAFM India Certifications significantly boost your career by demonstrating your expertise to employers, making you a more competitive candidate for advanced roles and promotions in the financial industry.
Q9: Are there any prerequisites for AAFM India Certification Exams? A: Some exams may have prerequisites, such as foundational knowledge or prior certifications. Check the specific requirements for each certification path on the AAFM India website.
Q10: How often do I need to recertify for AAFM India Certifications? A: AAFM India Certifications typically require recertification every two to three years to ensure that certified professionals stay updated with the latest financial trends and practices.
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