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CWM_LEVEL_2 – Chartered Wealth Manager (CWM) Certification Level II Examination

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Showing 7–9 of 20 questions

Question 7

Section B (2 Mark)

Suppose that Chicken Express, Inc. has a ROA of 7% and pays a 6% coupon on its debt. Chicken Express has a capital structure that is 70% equity and 30% debt. Relative to a firm that is 100% equity-financed, Chicken Express’s Net Profit will be ________ and its ROE will be ________.

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    Lower, lower

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    Higher, higher

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    Higher, lower

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    Lower, higher


Question 8

Section A (1 Mark)

The Net Operating Income (NOI) for a real estate investment is calculated as:

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    Gross potential income + vacancy and collection loss rate – insurance- real estate taxes-utility expenses- estimated maintenance expenses

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    Gross potential income-vacancy and collection loss rate – insurance- real estate taxesutility expenses- estimated maintenance expenses
    Gross potential income - vacancy and collection loss rate + insurance- real estate taxesutility expenses- estimated maintenance expenses-financing cost

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    Gross potential income + vacancy and collection loss rate - insurance + real estate taxes-utility expenses- estimated maintenance expenses-depreciation


Question 9

Section A (1 Mark)

The stage in venture Capital financing where the business plan is completed and presented to a venture capital firm is called________________.

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    Early Stage Venture Capital

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    Seed Capital

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    Angel Investing

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    First Stage Financing