AAFM Exam CWM_LEVEL_2 Topic 2 Question 92 Discussion

Actual exam question for AAFM's CWM_LEVEL_2 exam

Question #: 92
Topic #: 2

Section C (4 Mark)

Read the senario and answer to the question.

Saxena is considering an attractive investment proposal in which he is being offered two different cash flow choices at the same initial investment of Rs. 2,00,000. According to you which one should he opt for assuming Risk Free Interest Rate is the required rate of return?

APlan A should be opted since it has a higher Future Value.

BPlan B should be opted since it has a lower Present Value.

CPlan B should be opted since it has a higher Present Value.

DPlan B should be opted since it has a lower Future Value.

Show Suggested Answer

Suggested Answer: C

by Craig at Oct 23, 2024, 04:29 PM

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Slyvia

19 days ago

Haha, I bet Saxena is scratching his head right now, trying to figure out which plan to choose. Maybe he should just flip a coin and see what happens!

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Dorsey

23 days ago

Wait, wait, wait. Didn't you guys read the question? It says the required rate of return is the Risk-Free Interest Rate. That means Plan B is the correct answer, since it has the higher Present Value.

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Hui

7 days ago

I think Plan A should be opted since it has a higher Future Value.

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2 months ago

I think Saxena should opt for Plan A.

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