Sheet1S.NoQuestionCorrect Answer1Which of the following does not form part of remuneration for an employee?Award of recognition2Medical expense reimbursed by the employer is tax-exempt up to ________.Rs. 15,000 p.a.3Which of the following approach is not adopted by the employer for providing health benefit to the employees?Medical treatment at home4This is not a described category under FPSB Indias Financial Planner Competency Profile to discuss the competent performance of a CFP professionalFinancial Planner Code of Ethics and Professional Responsibility5In group insurance, the terms of insurance are negotiated by ___.Nodal agency6Gratuity is a ____ type of retirement plan?Defined Benefit7_______ can be accumulated by an employee year on year.Privileged Leave8Which of the following cannot change while agreeing on the implementation responsibilities?The responsibility itself of implementing the recommendations9Which of the following factor is not considered while calculating premium under Group Insurance?Health of group covered10_____ is considered for calculating amount of gratuity for piece rated employees?Preceding 3 months average salary11What is the minimum service required to avail the benefits provided under the golden hand shake scheme?10 years12Human mind frequently makes random judgmental errors. This trait may be dealt with by programming individual decision process. This Characteristic is used in ____.Systematic Investment Plan13Under which of the following situation the employer is not liable to pay compensation under the Workmen Compensation Act?Injury due to disregard for the safety measures prescribed14What is the rate of employee contribution under Contributory Provident Fund (CPF)?Minimum 1% of the salary and not more than full salary15Which of the following expenses are not covered under Leave Travel Allowance?Both A and B16Which of the following is not a fiscal policy measure?Reducing Cash Reserve Ratio17Concept of final pay is a feature of_______Defined Benefit Plan18Calculate the completed years of service for an employee who is covered under Payment of Gratuity Act, 1972 and has served for 16 years 6 months and 5 days.17 Years19Transport allowance is exempt upto ___________.Both A and B20Which of the following best describes the cost of foregone income that results from making an economic decision to use funds to purchase a piece of capital equipments?Opportunity Cost21According to Workmen Compensation Act, what is the compensation paid to a worker in case of permanent disability?Rs. 1, 40,00022According to Workmen Compensation Act compensation to a worker is not payable in which of the following circumstances?Disablement for two days23Under the Payment of Gratuity Act, 1972, any employee employed in a seasonal establishment is deemed to be in continuous service if he actually worked for not less than _____% of the number of days on which such establishment was in operation.7524The Foreign Exchange (Forex) market does all of the following except:It assists in curbing speculation in the value of currencies.25Which of the following employees are not covered under the definition of Government Employee" for Government Provident Fund?None of the above26How much does an employee contribute to avail benefit under EDLI Scheme?Nil27Which of the following criteria should be met for pension to be called as "Superannuation Pension" under the Employee Pension Scheme?Both A and C28Recession is defined as ____________.a rise in the general price level of goods and services in an economy over a period of time29What is the minimum number of employees required in an establishment to come under the purview of the Payment of Gratuity Act, 1972?1030As per Income Tax Act, 1961 what is the maximum limit of exemption under retrenchment compensation?Rs. 5, 00,00031Leave Travel Allowance can be carried forward and claimed in __________First year of next block32Money has time value. This fact derives its significance from several conditions. Choose the one from the following which does not correspond:Possibility of increase in tax rates over time.33The Internal Rate of Return (IRR) is ___________.The discount rate that reduces to zero the net present value of a stream of income inflows and outflows34As per EPF Act, 1952 Wage is defined as _________.Basic + DA + Cash Value of any food concession + retaining allowance35Which of the following is not taken into account while calculating wages for tax exempted retrenchment compensation?Bonus36______ administers the ESI Scheme.ESIC37Which of the following is an infringing use of CFP marks to describe an individual eligible to use them?FP Expert38Employers contribution to a superannuation fund is allowed as ________ in the computation of business incomeDeduction39Which of the following is true about Defined Benefit plans?The benefit is determined by certain working and has to be paid to an employee40In case of lesser earning for Defined Contribution schemes, which of the following will be true__The employee gets a lower benefit41Which of the following statement is true with regards to Central Government Employee Group Insurance Scheme (CGEGIS)? Statement I: Scheme is not applicable to persons recruited in the Central Government after attaining the age of 50 years. Statement II: When an employee is once admitted to a higher Group, he will continue to subscribe at the same rate as that of higher Group.Both statements are true42The following does not constitute as one of the criteria for a Voluntary Retirement Scheme (VRS) to to claim exemption under the Income-tax Act, 1961:The scheme to result in overall reduction in the existing strength of the employees of the organization,he CFP professional assists the client in clarifying and prioritizing short and long-term realistic financial goals with respect to the current situation43The following does not constitute as one of the criteria for a Voluntary Retirement Scheme (VRS) to to claim exemption under the Income-tax Act, 1961:The scheme to result in overall reduction in the existing strength of the employees of the organization,he CFP professional assists the client in clarifying and prioritizing short and long-term realistic financial goals with respect to the current situation44Which of the following statement is true with regards to Group Insurance? Statement I: The contract is between the insurer and organization that represents the group of individuals. Statement II: There is requirement of minimum size of the group as decided by the insured.Only Statement I45Which of the following is not true regarding Leave Travel Allowance?LTA exemption can only be claimed thrice in a block of 4 calendar years.46The term "employee benefits" includes contributions in which of the following categories of schemes__Group Insurance scheme47In case of a Defined Benefit plan where the benefit payable is based on the terminal salary, an increase of 10% of the wages of the employees would increase the contribution to be made by the employer for the benefit byMore than 10% of the amount of contribution being made earlier48Which of the following does not correspond to the principle of Professionalism under Financial Planner Code of Ethics and Professional Responsibility?Appearing in executive attire, using latest gadgets of communication, find dining skills, etc.49In a Defined Contribution retirement plan, any change in the rate of interest earned by the funds would affect__The benefits payable to the employees and not the employer50Gratuity received by the nominee in case of death of the employee while in service is___Totally exempt from tax51From the viewpoint of the employer, a Defined Contribution retirement benefit plan is easier to operate because__Since there is no need for valuation the employer's expense is less52Liability in leave encashment is of ______nature as it is linked with salary as well as leave positionIncreasing53Under Financial Planner Code of Ethics and Professional Responsibility, the principle of Fairness is most appropriately interpreted to mean that a CFP professional would _______.owe the client all due services meant to be fairly provided, without prejudices and with proper balance of interests54Calculate the value of the corpus created by Sanjay, presently aged 40 years, who invests Rs. 70,000 at the end of every year in an equity fund, for a period of 15 years. Assume his investments will generate an annual return of 12 % p.a. and the average inflation rate for the period would be 7.5% p.a.Rs. 26,09,58055An investor plans to save Rs. 2,00,000 per year, to build a corpus of Rs. 40,00,000 for a financial goal 10 years from now. Which option will help him achieve his goal? (A) Regular year end investments in an asset yielding average annual return of 14%. (B) Additional investments of Rs. 30,000, putting the net amount in a comparatively low risk product yielding 11 % annual return.Neither option will make him meet his goal56Amit and Sunil are 35 years old and both are 15 years away from their retirement. Amit invests Rs. 25,000 p.a. for 10 years and stops but remains invested. Sunil starts investing Rs. 1 lakh p.a. after Amit stops and does so till his retirement. What can be said about their corpus at the time of their retirement assuming their investments earn 10% p.a. compounded yearly? Assuming both are investing in ordinary annuity.Amit saves more than Sunil by Rs. 31,17557Krishna, aged 30 years, wants to know the real worth of his investments after 25 years. He is investing Rs. 2, 00,000 every year in an equity diversified fund generating 14% p.a. and the average inflation rate for the duration is 8% p.a.Rs. 1, 08, 90,08258Ramit wants to accumulate money to buy a car worth Rs. 5.6 lakhs after 4 years. He wishes to invest money at the beginning of every quarter for the first 3 years and he cannot save any more money after that. Calculate the amount of saving required every quarter if the rate of return on investments is 14.25% compounding quarterlyRs. 32,67959A sum of Rs 50000 is invested every year end at a rate of 5% p.a. After 7 years the rate of interest was changed to 5% p.a. compounded half yearly. After a further period of 3 years, the rate was again changed to 6% p.a. compounded quarterly. Find the accumulated amount at the end of 15 years from commencement?Rs. 1, 09,88960An individual has recently purchased a house worth Rs. 40 lakh for self-occupation by availing housing loan of Rs. 28 lakh at 9.25% p.a. rate of interest. The tenure of loan is 18 years. He has Rs. 12 lakh financial assets at present. He is expected to save annually Rs. 2 lakhs which he invests on a quarterly basis beginning a quarter from now in an instrument which is expected to provide return of 9% p.a. What would be his net worth five years from now? The value of the house which is for consumption purposes is not considered in the net worth so arrived.s 6.68 lakhs61Sita and Tia, start investing every month end for their retirement (scheduled at age 60). Sita starts investing Rs. 2000 from age of 30 years and Tia starts investing Rs. 4,000 from 40 years of age. Which of the following is correct if annual rate of return on investment to be 12%?Sita saves Rs. 24, 59,183 more than Tia62Mr. Naresh has been saving Rs. 2 lakhs every year for the last 10 years. This money has been invested in a diversified equity scheme which gives an average return of 14.25% p.a. He has stopped saving in this account and has started saving total Rs. 15,000 per month through 3 SIP's (systematic investment plans) for 3 years. The average return on these 3 investments is 12.75% per annum, compounded monthly. How much will be accumulated from both the investments after 3 years?Rs.73,30,78663Deepak, aged 35 years, is planning to retire at 55. His present monthly expenses are Rs. 75,000. Assuming inflation as 8% p.a. and life expectancy of 75 years, calculate the difference in retirement corpus if he delays his retirement by 5 years and retires at 60.Rs. 1,20,67,22864Rakhi, aged 30 years, wishes to retire at 50. She starts an investment of Rs. 2,50,000 every year end for building her retirement corpus. Assume an average annual return of 12% for her on these investments during the accumulation period (20 years). On retirement she plans to withdraw her entire corpus and invest in a fixed deposit yielding 4% p.a post inflation. In case her life expectancy is 75 years, calculate the allowable monthly withdrawals by Rakhi from this corpus.Rs. 94,06265Saloni, aged 40, is a working professional. Her present household expenses are Rs. 50, 000 per month. How much amount will she be requiring every month at her age of 60 years if inflation is 7.25% p.a for this entire period? Assume she is investing all her savings in bank deposit yielding 8.75% p.aRs. 2, 02,72966Azim, aged 30 years, wishes to retire at 55. If his present monthly expenses are Rs. 50,000 and life expectancy is 75 years, calculate the additional corpus required in case he lives longer by 5 years than his life expectancy. Assume inflation to be 7.5% p.a.Rs. 36,25,05167The average inflation over the last three years is 8.5 % p.a. You invested Rs. 1 lakh in a security 3 years ago which you have redeemed for Rs. 1.3 lakh. What real return have you obtained from investment?0.59%68Ravi, 40-year old man, spends Rs. 6 lakhs p.a., almost the amount he earns, to maintain his family. He expects his expenses to rise by 7% p.a. He has not saved for retirement. He has a second house which he wants to rent at Rs. 18,000 p.m. immediately, the rent expected to increase by 7 % p.a. You advise him to create a corpus by his age of 60 by investing the rent received in an instrument yielding 10% p.a. at the end of every year. The accumulated corpus would last ____ number of years taking the received rents post-retirement into account.17.15 years69Rajesh, aged 35 years, wishes to retire at 60. If his present monthly expenses are Rs. 50,000 and life expectancy is 75 years, calculate the additional corpus required in case he lives longer by 10 years than his life expectancy. Assume inflation to be 7.5% p.a.Rs. 88,29,27970A 45-year old man spends Rs. 7.5 lakh p.a., almost the amount he earns, to maintain his family. He expects his expenses to rise by 7% p.a. He has not saved for retirement. He has a second house which he wants to rent at Rs. 20,000 p.m. immediately, the rent expected to increase by 7 % p.a. You advise him to create a corpus by his age of 60 by investing the rent received in an instrument yielding 9% p.a. at the end of every year. The accumulated corpus would last ____ number of years taking the received rents post-retirement into account.8 years71Alok, aged 40 years, works with ABC Ltd and spends Rs. 2.5 lakhs p.a. plans to retire at age 60 and expects to live till 75 years. The basic inflation at 7% p.a. and lifestyle inflation at 1.5% p.a. are expected in the pre-retirement period. He starts investing for retirement at Rs. 50,000 p.a. in a 10% p.a. return instrument with immediate effect, and increases the contribution by 15% every year of the prior year investment amount. If the expenses post-retirement are curtailed by 10%, what maximum inflation would sustain his corpus till he survives, if the corpus is invested at 9% p.a.?0.88%72Mr. A purchased a flat worth Rs. 50 lakh in January 2007 by availing a housing loan of Rs. 35 lakh for tenure 15 years at the rate of 9% p.a. The value of his flat as in January 2013 has appreciated to Rs. 90 lakh. What approximate value of home equity can he consider in his flat towards his unencumbered interest after also setting aside 15% of the appreciation value towards taxes and other costs to be discharged on selling the unit?Rs 57.79 lakhs73Both Ramesh and Suresh are 30 years old. Ramesh starts saving Rs. 50, 000 every year and will save for 10 years while Suresh has been saving Rs. 15,000 every year since last 10 years and will continue to save for next 10 years also. Which of the following statement is true after 10 years, if return on investments is expected to be 12% p.a.?Suresh saves Rs. 2, 27,752 more than Ramesh74Mr. X who is 40 years old spends annually Rs. 7 lakhs towards his household expenses. He expects to retire at 62 years. During this period inflation is expected to be on an average 6% p.a. He wants to cover 35 years living expenses for self and spouse. If the inflation in the post-retirement period moderates to an average of 4% p.a. and he expects to generate a return of 7% from his accumulated corpus, what corpus should he target for a comfortable retirement?Rs. 5, 67, 15, 82175A 40 year old person spending Rs. 3 lakh p.a. plans to retire at age 63 and expects to live till 75 years. The basic inflation at 7% p.a. and lifestyle inflation at 1.75% p.a. are expected in the pre-retirement period. He starts investing for retirement at Rs. 30,000 p.a. in a 10% p.a. return instrument with immediate effect, and increases the contribution by 20% every year of the prior year investment amount. If the expenses post-retirement are curtailed by 20%, what maximum inflation would sustain his corpus till he survives, if the corpus is invested at 7% p.a.?6.07%76Rakesh, aged 40, years works with ABC Ltd. His present monthly expenses are Rs. 30,000. He will retire at the age of 60 years. On retirement he is planning to go for a holiday for which expenses in present terms are Rs. 2.50 lakhs. How much retirement corpus is required by Rakesh to sustain his post retirement expenses including his goal of vacation? Assume post retirement Rakesh will require 80% of his pre-retirement expenses; life expectancy 75 years, general inflation 6% p.a. and investment yields to be 10% p.a. throughout the period.Rs. 1,38,70,30877Mr. A had taken a loan of Rs. 40 lakh in July 2010 at a floating rate of interest of 10% p.a for tenure of 20 years from a housing finance company. The company sent a notice raising the interest rate to 10.75% p.a. effective January 2012 thereby increasing EMI. He decides to refinance the loan at 10.25% from a bank which charges a processing fee of 1% of loan sanctioned. What absolute amount he stands to save in the remaining tenure if the outstanding loan amount as at end of March 2012 is refinanced so that the new loan terminates as per original tenure?Rs. 2,39,401

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