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Question
Which of the following does not form part of remuneration for an employee?
Medical expense reimbursed by the employer is tax-exempt up to ________.
Which of the following approach is not adopted by the employer for providing health
benefit to the employees?
This is not a described category under FPSB Indias Financial Planner Competency
Profile to discuss the competent performance of a CFP professional
In group insurance, the terms of insurance are negotiated by ___.
Gratuity is a ____ type of retirement plan?
_______ can be accumulated by an employee year on year.
Which of the following cannot change while agreeing on the implementation
responsibilities?
Which of the following factor is not considered while calculating premium under
Group Insurance?
_____ is considered for calculating amount of gratuity for piece rated employees?
What is the minimum service required to avail the benefits provided under the golden
hand shake scheme?
Human mind frequently makes random judgmental errors. This trait may be dealt with
by programming individual decision process. This Characteristic is used in ____.
Under which of the following situation the employer is not liable to pay compensation
under the Workmen Compensation Act?
What is the rate of employee contribution under Contributory Provident Fund (CPF)?
Which of the following expenses are not covered under Leave Travel Allowance?
Which of the following is not a fiscal policy measure?
Concept of final pay is a feature of_______

Calculate 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.
Transport allowance is exempt upto ___________.
Which 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?
According to Workmen Compensation Act, what is the compensation paid to a worker
in case of permanent disability?
According to Workmen Compensation Act compensation to a worker is not payable in
which of the following circumstances?
Under 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.

The Foreign Exchange (Forex) market does all of the following except:
Which of the following employees are not covered under the definition of
Government Employee" for Government Provident Fund?
How much does an employee contribute to avail benefit under EDLI Scheme?
Which of the following criteria should be met for pension to be called as
"Superannuation Pension" under the Employee Pension Scheme?
Recession is defined as ____________.
What is the minimum number of employees required in an establishment to come under
the purview of the Payment of Gratuity Act, 1972?
As per Income Tax Act, 1961 what is the maximum limit of exemption under
retrenchment compensation?
Leave Travel Allowance can be carried forward and claimed in __________

Money has time value. This fact derives its significance from several conditions.
Choose the one from the following which does not correspond:
The Internal Rate of Return (IRR) is ___________.
As per EPF Act, 1952 Wage is defined as _________.
Which of the following is not taken into account while calculating wages for tax
exempted retrenchment compensation?
______ administers the ESI Scheme.
Which of the following is an infringing use of CFP marks to describe an individual
eligible to use them?
Employers contribution to a superannuation fund is allowed as ________ in the
computation of business income
Which of the following is true about Defined Benefit plans?
In case of lesser earning for Defined Contribution schemes, which of the following will
be true__
Which 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.

The 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 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:

Which 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.
Which of the following is not true regarding Leave Travel Allowance?
The term "employee benefits" includes contributions in which of the following
categories of schemes__
In 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 by
Which of the following does not correspond to the principle of Professionalism under
Financial Planner Code of Ethics and Professional Responsibility?
In a Defined Contribution retirement plan, any change in the rate of interest earned by
the funds would affect__
Gratuity received by the nominee in case of death of the employee while in service
is___
From the viewpoint of the employer, a Defined Contribution retirement benefit plan is
easier to operate because__
Liability in leave encashment is of ______nature as it is linked with salary as well as
leave position
Under Financial Planner Code of Ethics and Professional Responsibility, the principle
of Fairness is most appropriately interpreted to mean that a CFP professional would
_______.
Calculate 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.

An 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.

Amit 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.

Krishna, 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.
Ramit 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 quarterly

A 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?

An 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.

Sita 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%?
Mr. 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?

Deepak, 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.

Rakhi, 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.

Saloni, 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.a
Azim, 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.

The 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?
Ravi, 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.

Rajesh, 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.

A 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.

Alok, 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.?

Mr. 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?

Both 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.?

Mr. 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?

A 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.?

Rakesh, 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.

Mr. 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?

Correct Answer
Award of recognition
Rs. 15,000 p.a.
Medical treatment at home
Financial Planner Code of Ethics and Professional Responsibility

Nodal agency
Defined Benefit
Privileged Leave
The responsibility itself of implementing the recommendations
Health of group covered
Preceding 3 months average salary
10 years
Systematic Investment Plan

Injury due to disregard for the safety measures prescribed

Minimum 1% of the salary and not more than full salary

Both A and B
Reducing Cash Reserve Ratio
Defined Benefit Plan

17 Years

Both A and B
Opportunity Cost

Rs. 1, 40,000
Disablement for two days
75

It assists in curbing speculation in the value of currencies.

None of the above

Nil
Both A and C

a rise in the general price level of goods and services in an economy over a period
of time
10

Rs. 5, 00,000
First year of next block

Possibility of increase in tax rates over time.

The discount rate that reduces to zero the net present value of a stream of income
inflows and outflows
Basic + DA + Cash Value of any food concession + retaining allowance
Bonus

ESIC
FP Expert
Deduction
The benefit is determined by certain working and has to be paid to an employee
The employee gets a lower benefit
Both statements are true

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
situation
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
situation

Only Statement I

LTA exemption can only be claimed thrice in a block of 4 calendar years.

Group Insurance scheme
More than 10% of the amount of contribution being made earlier

Appearing in executive attire, using latest gadgets of communication, find dining

skills, etc.
The benefits payable to the employees and not the employer
Totally exempt from tax
Since there is no need for valuation the employer's expense is less
Increasing
owe the client all due services meant to be fairly provided, without prejudices and
with proper balance of interests
Rs. 26,09,580

Neither option will make him meet his goal

Amit saves more than Sunil by Rs. 31,175

Rs. 1, 08, 90,082

Rs. 32,679

Rs. 1, 09,889

s 6.68 lakhs

Sita saves Rs. 24, 59,183 more than Tia

Rs.73,30,786

Rs. 1,20,67,228

Rs. 94,062

Rs. 2, 02,729

Rs. 36,25,051

0.59%

17.15 years

Rs. 88,29,279

8 years

0.88%

Rs 57.79 lakhs

Suresh saves Rs. 2, 27,752 more than Ramesh

Rs. 5, 67, 15, 821

6.07%

Rs. 1,38,70,308

Rs. 2,39,401