## Advanced Financial Planning Case Studies for CFP

Posted by Prashant Shah on April 4, 2012

Following are the case studies which are reasonably tough but good to solve. Please note that FPSB India is the sole owner of the case studies.

Every paper has two cases:

Click to Download

- 010JAN Vijay Case
- 011FEB-09 SOPORI CASE
- 012MAR-09 ARKA ROY CASE
- 013APR-09 ANAMIKA
- 014MAY-09 SAUMYA
- 015 JUNE-09 RAHUL

Solution:

## sachin said

dear prashant sir i have clear exam 5 thanks for ur help, but i experience that it is very tuff mostly 5 marks question.

## Prashant Shah said

Dear Sachin,

Congratulations.

Remain associated and help others to clear exams as you did.

Regards,

Prashant.

## sachin said

yes i wl diffidently help others

## nayanluhana said

Dear Sachin can u please tell me which type of question was there in 5marks it was of corpus? and i will also like to know that theory was there?

## sachin said

hi sorry for late rply , there mix of question in 5 marks question . there is no thry question , question type retirement planning with asset allocation thery + tax question+ulip+hlv. they make question complicated which is hard to understand. when u wl go for exam 5, solve question 1,2,3, and last 5 mark question. read more about gold tax. gold etf

sachin

## hari said

Hi Prashanth and Sachin,

I am taking challenge status exam, 20th of october. Iam preparing from case studies.

I need good set of questions for short questions.

Please help me in how to start targeting this exam and what to focus on.

I dont have good material with me.

Hope u help me.

Hari

## Prashant Shah said

Dear Hari,

There are no questions sets available as of now. What I have are the past papers which I have already uploaded on this site. Apart from this new questions are also available ( available on this site). Go through these and develope conceptual clarity. I think it would suffice your requirement.

The focal point for this exam is the concepts of TVM and understanding the concepts of insurance requirement and capital gain taxes.

Normally the goals covered in this exam are retirement planning, insurance planning, education planning, marriage planning and world tour planning.

Go through the past exam papers to develope more clarity on these goals.

No doubt the overall result of this exam is less than 40% but those who follow this site have been able to clear the exam comfortably.

Also refer to the basic calculation for AFP post on the site before you begin.

All the best.

Regards,

Prashant V Shah.

## hari said

Thanks prashant,

As sugested, I will focus on concepts and practice on problems related to retirement planning, insurance planning, education planning, marriage planning and world tour planning.

## sachin said

dear prashant sir

if u have sample of actual case study presention pl send me, i am trying for presention but i am ltl confuse how to make it

## sachin said

dear hari, as par my experience past papers are very important & practice of tvm first solve 2, 3, 4 mark question and where u confuse drop that question & go ahed study of capital gain, insurance retirement planning may help u lot in exam solve at least 25 sample paper.

all the best

sachin

## Hari Prasad said

Hi sachin,

Thanks for your suggestion ,

But I don’t have so many practice papers, if u do have pls can u provide me. That will be of great help.

## T.Rajan said

Dear prashant, I have cleared exam 5 on 27th Sept 2012. Your site helped me a lot for completing all the modules. Thanks for your guidance.

## Prashant Shah said

Dear Rajan,

Regret for late reply.

Congratulations and thanks for appreciation. Remain associated with the site and lets help all to become CFP.

Regards,

Prashant V Shah.

## komal shah said

Respected Sir,

I’m going to appear for 5th paper very soon. Can you please give me guidelines for this paper. Sine i have papers till 2010 and not 2011. Will it make any difference?

## Prashant Shah said

Dear Komal,

I am requesting Vinayak to guide you for the preparation. You will be getting a reply from him soon.

Regards,

Prashant V Shah.

## komal shah said

Thank you, very much sir.

## Vinayak said

Dear Komal,

A few things I would like to inform you based on my experience for the final exam.

1. Be very thorough with the TVM concepts. Its very important to have absolute mastery over it.

2. Practice the solved papers of the previous years given in this blog. Pay more attention to the last six months of 2009 and all cases of 2010. The 2011 papers are not available and they are also not required. The available case studies are more than enough. Practice the problems thoroughly and try to solve them yourself first without referring to the solution. This way you will gain confidence in solving the problems and it will also give you an idea of the time required to solve the questions.

3. Be thorough with Gold ETFs, Portfolio rebalancing. Capital Gains taxation, buy back of shares etc.

4. During the exam, attempt the 2, 3 and 4 markers first. Do the 5 markers last. There will be enough time.

The exam will not be difficult if your conceptual understanding of all the modules is good.

All the best for the exam.

Vinayak

## komal shah said

Dear Vinayak,

Thank you very much for your guidance. I would go through all the points you have written down.

Thanks for your wishes too.

Regards,

komal Shah

## reena said

how it came 5168 survival benefit in (011FEB-09 SOPORI ANS)??

## Shashank Jain said

Hello Sir

I am going to appear for Final Exam on 22nd Jan. I had doubts relating to post office schemes. I wanted to know whether they will be relating to rules and interest rates post dec 2011 or after that. Maturity, Interest rates changed significantly after Govt made them market linked. Are the questions going to be as per earlier fixed interest rates or market linked ones.

Thank you very much sir.

Regards

Shashank

## Shashank Jain said

*pre dec 2011 or after that.

## Prashant Shah said

Dear Shashank,

You can check the rates applicable in exam https://prashantvshah.wordpress.com/category/cfp/investment-planning/small-savings/

These rates are applicable till Jan 2013.

Regards,

Prashant V Shah.

## Shashank Jain said

Thank you very much sir for all the rules and rates pertaining to PO schemes. I will use them for solving questions.

There is still a little doubt as I was attempting questions.

Suppose an investor has opened a PPF A/C(int rate-8%) and purchased an NSC(int rate-8%, compounded half yearly, maturity- 6years) in year 2008. Our A.Y. is 2012-13. If he asks me calculate amount an investor will receive on maturity, should I change int rate (for calculation purpose) from year 2012 onwards of NSC to 8.4% and PPF to 8.6% till maturity.

Same w.r.t. to MIS and RD. If they were opened in year before change in int rates took place, would they impact existing investments or only fresh investments?

These slight doubts are bothering me too much. Any help in this regard would be highly appreciable.

Thank you very much sir.

Regards

Shashank

## Prashant Shah said

Dear Shashank,

For PPF account you will have to consider 8% rate for a period from april,2011 to nov,2011 and post that it is 8.6%.

For NSC and MIS new rates and maturities are applicble only when they are purchased on or after 1st dec,2011.

Regards,

Prashant V Shah.

## Shashank Jain said

Thank you very much sir for your response. I will take care of that while answering questions in my upcoming exam. Your blog proved immensely helpful to me.

Thank you Sir again

Regards

Shashank Jain

## Shashank Jain said

Hello Sir

I cleared my final exam with Grade B. I am very thankful for your help sir. Your blog provided me with much necessary insight and helped me prepare well for my exam,I believe every CFP aspirant should follow your blog to remain updated.

Thank you very much sir for your help again.

Regards

Shashank Jain

## Prashant Shah said

WOW!

Congratulation for securing a handsome grade.

Thanks for all the appreciation.

Remain associated and actively keep helping others to clear like Manish and Vinayak.

Congratulations agains,

Prashant.

## Shashank Jain said

Sure Sir. I ll try my best at helping current and future CFP aspirants. I hope I ll be able to.

Thank you very much sir.

I had one query. I am currently pursuing BBS and I ll be completing my graduation by May 2013. I just wanted to ask if there are job opportunities for me who has no experience at all. I want to enter pure financial planning and do not want to start with Sales. Will that be possible?

Any response would be highly appreciable.

Thank you sir once again.

Regards

Shashank

## vikas said

Dear shashank now that you have cleared ur CFP final exam….have u been given the CFP charter or will u have to wait for it till u obtain 3 yrs of workex

## Shashank Jain said

Hello Vikas

No I haven’t been given Certification. I will to wait 3 years and obtain work experience to get one.

Regards

Shashank Jain

## R Varadarajan said

Dear Shashank,

I am planning to appear for the final module soon. Since ou have cleared this module recently, please could you give me a feedback of the type of questions you had faced.Thanks

R Varadarajan

## Shashank Jain said

Hello Sir

As far as final exam is concerned, I got around 50% of questions from FPSB Sample papers. I don’t know whether they regularly give so or I was too lucky.As far as other half is concerned, be ready to be surprised. They were all new to me. But still since my concepts were quite clear, they did not cause much problem. Do practice as many questions as you can. Prashant Sir have provided with number of case studies. Please practice them all. They were indeed very helpful in my preparation.

Questions, 90% of them were TVM. Rest 10%, capital gains and income from other sources. Insurance, got a question from HLV calculation, but that too could have been easily solved if you knew about TVM. Do practice mortgages well. I got three questions with respect to that. Clarify everything, from processing fee to time of disbursement, interest and principle payments.

## Shashank Jain said

Also Sir you had inquired about possible changes in format. I had replied then only.Since then I have revisited this forum now and I do not find my response there.

Personally I don’t know much about changes that have taken place. But I have a contact number. Mr Heyram – 02261712413. He sits at exam desk at FPSB. Even I cleared all my doubts from him.

Regards

Shashank

## R Varadarajan said

Dear Prashant,

I am glad to inform that I have cleared Investment Planning Paper with grade ” B “. This could not have been possibile without the helpful clarifications and suggestions from your site and the responses from yourself, Manish and Vinayak . Thanks again. I am planning to take up the RPEB paper next. I look forward to your timely advise.

## Manish said

Dear R varadarajan congratulations on clearing investment planning and all the best for rest of the modules.

## Shashank Jain said

Congratulations Sir

and best of luck for the future modules.

Regards

Shashank Jain

## R Varadarajan said

Dear Shashank,

This is just to inform that I have cleared the Final Module last week. Thanks for your tips.

## Shashank Jain said

Dear R Varadarajan

Congratulations Sir upon successfully clearing your exam.

Best of Luck for future endeavors.

Regards

Shashank Jain

## ARVIND KUMAR GUPTA said

Sir, I appeared Challange Status exam on 22.1.13 & secure 46 marks. I got frustated, I prepare myself with self sudy with my best efforts. at that time I do not see your blogs. I request you kindly guide me how start now & when will be right time to appear on exam?

## R Varadarajan said

Dear Prashant/Manish,

Now that the examination pattern of modules 1-4 have been changed, is there any change in the topics/subjects covered or only the exam pattern ( number of questions and the total marks ) have changed. Since I will be appearing for RPEB & RAIP, I am keen to know the difference. Thanks.

## R Varadarajan said

Dear Sashank,

Thanks for the message and congratulations to you on clearing the CFP Final.I would now look forward to your guidance in the remaining paper. As enquired earlier, I would like to know the basic difference in the exam pattern from Feb 2013. The changes are just the number of questions ( 77 instead of 75) and total marks ( 150 instead of 140) or is there any change in the subjects/topics covered in these modules. Shall be grateful to receive your feedback. Thanks

## reena said

Sir I gave 5th paper advance finance planing thrice but couldn’t clear it up.I solved all 2009 and 2010 paper and all the material what ever available on net. But i am not getting which way I can make it’

sir, can u please suggest is there any question pattern or method which I can follow and clear the paper.

Thanks & regards

reena

## Tanu said

Sir,

I have my exam on 25 th april .and i m very nervous . Can u plz provide me practise questions on the available case studies on fpsb site . They uploaded 6 case studies in jan 2013 but since there are no questions as such . I dont know how to go about . When it comes on individual modules i can handle them n scored well in all .But i get very confused when it comes to AFP . Plz plz plz help .I have my exam jn a weeks time .plz help . Plz provide me with the case studies questions . Help

## Prashant Shah said

Dear Tanu,

It is very tough to produce the practice questions for the case studies. However we have all the past case studies to refer. Also request you to read the comments in the AFP segment of the site to get the valuable inputs. Feel free to ask further.

Regards,

Prashant V Shah

## Tanu said

So there is no way I can find the questions for the relevant case studies from my exam point of view . And also r u refering to the 6 case studies uploaded on your site .first one being vijay’s case study ? Are these the past case studies ?

## R Varadarajan said

Dear Tanu, Case studies and the final module which is also the only paper for the challenging status module it is meant to be little different. You have to practice the the questions of the previous case studies and in all probability you may get a few questions similar to the old ones. I appeared for the final module and cleared the exam, though not with a high grade. More than 60% of the questions were new. You should go through the current case studies and familiarise yourself with the cases thouroughly so that you will be able to understand the question quickly to work out the solution within the time limit. Please be thorough with the theory questions of previous case studies, which will most probably be repeated.Best of Luck

## R Varadarajan said

Dear Tanu,

I forgot to mention one thing. Please go through and work out the case studies/ problems of SP-1, SP-2 & SP-3 in the FPSB website

## Tanu said

Thanx for replying , I m really nervous n seeking for someone’s advice .I have worked out the problems of SP1,2 and 3 infact i have a doubt as well . What does it mean if a question says a stress test is applied for 2% reduction in equity returns and 1% reduction in liquid funds ?? And what is goal seek function ??And also where can i find the previous case studies question and solution for practise . Where exactly are these previous years case studies in the blog ?

## Tanu said

Plz reply

## R Varadarajan said

The ” stress test” is a situation of ” what if ?”. That is in the instant case what will be the situation if the equity return reduces by 2% and liquid fund returns bu 1% from the original assumption. The’goal seek” function is one of the commands in ” open office” using which you can substitute the changed circumstances as listed above to find out the ultimate answer. For using this every step and every calculation should be though the cell reference and not numerical input. Once you start using you will understand.

For previous years’ case study please go through the links in this blog which would really help you to understand the concepts.

With best wishes

## Tanu said

Since i have my exam the coming week . Tax slab will be applicable for AY 13-14 or 12-13 . As in i will consider the latest tax sab , announced in the resent budget ? Though to the best of my knowledge there r hardly any changes in the tax slab this yr but still to be specific which yr am i suppose to consider ?And so for fixed income as nsc, scss etc the latest rules will apply ? And also formula for income tax and inflation adjusted rate of return ?

## Varadarajan Raghunathan said

Dear Tanu, In all these case the reference date is April 2012 and hence the Tax Rates applicable for the FY 2012/13 would apply. With regard to the Interest rates on PO savings schmes also the same rule apply. Trust this clarifies the position. BEST OF LUCK

## Pavan said

Dear Prashanth Sir,

Thanks for every single upload on this blog.

I cleared Advanced Financial Planning on 18th with C Grade. I did not take a tuition anywhere. I found it very very difficult to find the relevant information. I found your blog very useful. I sincerely thank you for it.

Sincerely

Pavan

## Pavan said

Sir,

BTW My recent CFP-5 Exam certificate is not listed in the Certificates section of NCFM Website.

Is this normal behavior ?

Sincerely

Pavan

## vikas said

Dear Pavan,

congrats on passing your final exam. 🙂 Ya it takes time to get updated in NCFM site . How was ur exam in terms of difficulty ? What kind of questions were asked ? I have my exam tom so any inputs would be quite helpful 🙂

## Pavan said

I cleared this exam on second attempt. In my first attempt I scored 45.

Using OpenOffice is better than using a hand-calculator. Cash flow questions are very very hectic with a hand-calculator.

I left 2 ( one of 5 marks and other of 4 marks ) such questions because it made no sense spending 20 – 30 min trying to solve them on a hand-calculator.

Converting Annual Interest Rate to their Monthly equivalent by dividing the former by 12 is DISCOURAGED in CFP-5 whereas in the earlier modules it is not. For example, say we arrive at some value A by taking monthly rate of interest as T/12 where T is the annual interest rate, and a value B when we take monthly interest rate as [ ( 1 + T) ^ (1/12) -1 ], you will notice that in CFP-5 both A and B are in the options ( very often ). The correct option being B and NOT A. Whereas in earlier modules, for a similar problem, answer would be derived to be A. ( Not noticing this costed me my first attempt )

There are 10 2 Mark Questions, 8 3 Mark Questions, 4 4 Mark Questions, 8 5 Mark Questions.

You can expect atleast four 5 Mark Questions to be very convoluted with details.

Also, Tax Planning 5 Marks questions are always the easiest ( although Knowledge intensive ).

Retirement Planning Questions are easy but ( as I said earlier ) there will be questions that are too convoluted and increase the complexity of calculations.

I must say that I am not very satisfied with CFP, because the only difficulty with this exam/ certification is the information-blackout. Materials provided by many tutors are not quantitative and have unbearable amount of prescription about Financial Planning Profession etc etc which is of very little use in the existing system of quantitative exams. Similar issues do not exist with programs like CFA, FRM, PRM. There are practice standards in these professions too. But their material or body of knowledge is NOT BLOTTED with these standards and general notional stuff.

I bought material from someone which says ” This materials teaches you what ought to be learned and not what you want to learn ” in text somewhere in the preface when in fact, about 90 % of the material is stupid compilation of news-paper articles, general and very vague, irrelevant descriptions. To summarize, I was more humiliated than enlightened.

CFP is not like this anywhere else in the world. It turns out that CFP everywhere else talks about LifeCycle Finance and Personal Finance in a much elegant and beautiful ways. They don’t just blurt disordered information in their material, they are careful the material is comprehensive and rational, which is not the case here.

## Bhuvana said

Could you please share the kind of questions appeared in the exam, which will help fellow CFP aspirants.

## Pavan said

I replied in the two posts ( one above and one below ). To summarize, 2 and 5 mark questions can be randomly picked. But 3 and 4 mark questions have definite pattern. Some 4 mark questions will be elevated to 5 mark questions too ( happens in questions from Tax Planning ).

Corpus Calculation, Insurance Needs, Cash Flow questions-IRR, FV, Step-wise or Multiple Cash Flow Questions.

It would really be good and beneficial if you use the case studies in this site to collect all of them at one location and get habituated to the methods in the official solution.

## Bhuvana said

Thanks pavan. Thank you for an elaborate explanation. I am appearing final module on 30th April. I have planned to solve 2009 and 2010 case studies thoroughly. Will that suffice to clear final module or I should concentrate on 2008 case studies as well ? My aim is to clear exam. Grade m least bothered about.

## Pavan said

I believe I answered your question already.

It is a strong empirical observation that most of the question that you will get in your exam are already repeated, at least in the form and structure, in the past exams. I used all the case-studies from this blog. I think all of them are from 2010. From what I have seen in my both exams, 2010 case-studies were sufficient. Had I been more careful and had I learnt to work with Excel, I could have scored higher. But I didn’t do that and I left nearly 15 marks of numericals without even reading them. So I insist on learning to work with Excel.

Next, since you have time, it is OK to look at 2009 and 2008 case-studies ( if you have them ). But I cannot claim that they will useful.

What would really help is reinforcing the methods used in the sample case-studies( of 2010, 2009, 2008) . Because these are certain to re-appear.

## Bhuvana said

Thanks pavan. Yeah. but explicitly i wanted your answer again. Sorry for troubling. You know right, how it would feel for someone who is gonna appear for exam. Seriously I am afraid of final module. Now little relaxed after you said, case studies uploaded here are enough for the exam. 🙂 now I am concentrating on 2010 case studies. Hope the 2010 and 2009 case studies will help me through with the exam.

## R Varadarajan said

The cases I got were Mahesh and Sanjay and some of the questions are given for your use. These have been listed from my memory and there could be some errors in the figures. But the idea is to pass on the type of questions one might receive and most probably they may not be repeated verbatim.

Mahesh& Neelam:

1.Neelam’s own expenditure in the household is Rs.15000 and would like to look for a insurance to cover expenses Varun becomes self supporting – ie after his 28 years. Though appeared easy I couldn’t get the answer.

2.What the SIP to meet the Marriage corpus through debt fund, if the ULIP ( 10% return) and the Money back maturity are invested into this fund on Maturity.

3. Equity valuation for a share with a current dividend of Rs.12.00 and growth of 10% for 3 years and 8% thereafter,if required rate is 11%

4.Immediate investment of Rs.40000 & 20000 in their respective PPF a/cs of Manish & Neelam and investment increases by 20% p a till maturity and investments are at maximum amount duing the 2 blocks of extensions. What would be the corpus.

5.Find the Yield from the ULIP over the investments, given various charges and a 10.8% p a return on the fund values.

6.Find the Annual SIP through Equity MF for the Holiday corpus for Annual vacation of Rs.75000 from 45 till retirement and at a reduced amount of Rs.50000 till his lifetime. The funds reqd for a block of 5 years is transferred to Liquid Funds in the previous year.

7.TV purchase at Rs.150000, initial payment Rs.20000 and balance to be paid after 6 months in 6 monthly instalments -interest is charged at 14% p a compounded quarterly – What is the first instalments.

8.There is a 500 day FD offer. What is the minimum acceptable rate rounded off to nearest 25 points, if the minimun real return is 4% and the inflation and tax charges account for 7%.

Sanjay

1. What is the additional insurance requried to cover through Balanced Fund ( a ) Propsed HL liability after 18 months ( b) Education/ Higher Education Costs of son & ( c )Expenditure of spouse at 80% of current exp. ( The answer would match only when the HL liab is discounted for 1 1/2 years)

2.The question was to assess the share of equity and debt in his investment pattern and to choose the answer of % given

3. The next question was the change in the precentage after 3 years his investments contirnues in the same pattern.

4.Retirement corpus estimated at 1.75 Cr and invesment continues in the Balance funds SIPs which increses to 7500/10000/150000 in stages of 3 years till 58, and then the investments shifts to liquid fund along with switch of 25% from the balance into liquid fund Is the corpus adequate or short ( similar to the problem in sample paper 3 )

5. The next question is if the lifestyle increases by 2% during preretirement stage and the longevity increases by 8 Years.

6. The Aurangabad house rent is 6% of the market value of the house. Maintenance and Property tax would be 15% while Income Tax would be 20%.. The net amount is invested in equity fund on quarterly basis. The rent is revises every 3 years as per the real estate appreciation rate. After 5 such revisions, the amounts are diverted to liquid fund along with the 25% switch from the balance. Will the corpus be sufficient to meet the higher education cost.

7.Credit card payment delayed and full payment made on 10 th March as ag due date of 7th with the amount Rs.11700.The charges are 2.95% interst and penalty of 30% of the minimum payment of 5%. What will be charge in the next statement with information on new purchases as well.

8.Calculate the Income Tax due if the Loss on the house property is Rs.45000, interest on SB Rs.6500 and interest on FD – 9500/ ( I do not remember the exact amounts of the interests)

Trust this helps every one !!

## Tanu said

Hi congrats on clearing ur exam … Even i hv my exam on 25 th april …can u just brief a lil about which case study were there in ur exam n the kind of questions regarding the same … Wat would u suggest i should consentrate more on ….past yrs case studies ? Over all concepts once again ? And the 6 case studies uploaded on the web site … Were u thorough with all of them when u sat 4 the exam . I hv read them but i dont know if i should know all the details regarding all the case studies .

## Pavan said

See my post above.

I got Sahanubhuthi ( Case – C ) and Sanjay (Case – F ) in the exam I cleared.

I got Case C and Case B in the exam I didn’t. ( In which I got 45 % ).

This is how I wrote my exam :

In the beginning I sorted the question-numbers into 2 Marks 3 Marks and 4 Marks 5 Marks on a sheet of paper.

They are respectively 10,8,4,8 in number.

As I told in my earlier post I left a 4 marks question and a 5 marks question as they are Cash-Flow based Questions.

Most of the ten 2 Mark questions are from previous case-studies posted in this blog. Sometimes they are verbatim with the questions in the case-studies.The names will be changed.

You must note that the questions of Case-C in the exam I cleared are not the same as the questions in the exam I didn’t.

In the former, there was more emphasis on Insurance and Investments whereas in the latter there was more emphasis on Taxation and Insurance.

Take a printout of all the case-studies in this blog. There are around 21 case-studies here.

Accumulate all 4 marks and 5 marks questions at one place ( at least by their q.nos ). ( If the marks are not mentioned, collect all numericals instead ).

And pay close attention to their solution and the conventions ( This is the best you can do in these last days ). Note that the case-studies are from different tax regime.

Do the same for two and three mark non-numerical questions.

## R Varadarajan said

Congratualtions Pavan on clearing the final module.I also cleared the module very recently and the pattern of the examination is progressively becoming tougher and tougher Although the case studies are repeated the questions are not. Most of the theory questions get repeated barring a few exceptions as indicted in my earlier post which is confirmed in your post as well. While some of the Insurance questions are also repeated, the Corpus planning questions involving TVM have become tougher.

## Tanu said

Thanx Pavan …. Can u plz also tell me where r the 2010 case studies on the blog ? If possible plz past the link here becoz what I got was 2009 case studies http://www.ljbs.in/docs/Exam5_CaseStudy_2009.pdf . This is what i have , And for small saving scheme do I need to learn the term , maturity , rate for all of them or will it be given in the exam with respect to the 6 case studies mentioned , Agricultural income question ? Do i need to do that as well ? As in the 4 th case study there is a mention that 6 lac investment is made on agricultural land . I have done the 3 practise case studies uploaded on fpsb site .And can u plz tell me how to solve a money back policy question 20% of sum assured payable on survival on 5 th 10 th 15 th year A similar question is there in sameer case study q3 pg 24 on the clink mentioned above. If u can explain me the same . And ROI on Ppf is 8.6 % or 8.8 % as per fy12-13. Plz revert

## Bhuvana said

Pavan and Varadarajan,

Could you please let everyone know do’s and don’t’s before and during exam ? It will help all the CFP students

## R Varadarajan said

This is for the benefit of every one planning to appear for the Final module exam.

1. Please be thorough with the TVM Concept.

2. Work out all the problems of case studies of previous year. Reading and understanding them will be only part of the story. One should work out these problems physically in Excel or Open office – may be twice over so that you will be able to remember the steps, as soon as you find such questions.

3. Work out the FPSB solved case studies i e SP-1, SP-2 and SP-3. I reckon that there would be at least 1 or 2 five mark questions on similar lines.

4. Read all the Exam case Studies Case A – case F, and understand the concepts and situations of the cases so that you will be able to remember the situations quickly, the moment the question appears.- some of them are similar to earlier cases and there could be repeatitions at least in respect of theory questions.

5. First, try and answer/ solve the questions known to you be it 2 marks./ 3 marks. This would give you some cofidence to tackle difficult questions.

6. Finally, keep a POSITIVE outlook and ignore all negetive thoughts. Remeber clearly and tell yourself that you will clear the exam, as a last thing before going to sleep and as the First thing in the morning just when you get up.This will give you constant positive frame of mind.

I wish I could remember and post some of the questions I got.Perhaps I will post this by evening for the use of others. But please remember that the questions may not be repeated.

With very best wishes to all those planning to appear for the final module exam.

R Varadarajan

## Pavan said

@ Tanu:

Refer to the solution to Q3 in Sameer case study.

The premium to be paid annually is 9832 Rs.

However, 550 of 9832 is used to hedge pure risk ( in other words, for Term Insurance ) is not being invested ( so to speak). So this part is not considered as a cash flow.

So 9282 of 9832 is being invested to get the “money back” and this part will be considered as a cash flow.

Moreover, at the end of 3rd year ( equivalently beginning of 4th year) they receive 15% of 1 Lakh as survival benefit and they should ALSO pay the annual premium 9832 ( out of which 9282 is the investment part ). So net cash flow for this year is 15000-9282 = 5718.

Rest is self-explanatory.

Every article under the category “Advanced FP” or “Case Study” has sample papers for download.

List out all the instruments used in CFP Case Studies and just remember the details of these financial instruments.

I took RoI as 8.8 when I had to. I think it will be mentioned. I cannot recollect properly.

@Bhuvana

I did it already.

## Tanu said

With reference to the 6 th case study ie caseF . What is the meaning of loan to value ratio and how will this affect the calculations for the loan question . And if u r aware of any previous years case study that have LTV related question ? And in the same case study balance in fd is invested with accumulation option . What does that mean

## R Varadarajan said

The loan to value offered by the finance co is 0.80,means that the loan would be 80% of the value of the house.The loan would be Rs.40L if the house value is 50L. Normally this ratio is 75% or 80%. You can refer to question no 14 of Sameer Sapoori Case which also has same 80% as ratio. I am furnishing the case refernce.

FPSBI/M-VI/02-01/09/SP-10

With best wishes,

R Varadarajan

## Tanu said

And also accumulation option in fd ? And also in goal 3 of buying a car costing 600000 at then price in oct 2012 after disposing of existing car which is 200000 at present(mar 2012) . So will we sell it of @ 200000 in oct or there has to be some depreciation and if yes is it a fixed rate or will depend on the question

## R Varadarajan said

Cumulative option in the case of FD means interest is added to the principal every quarter ( since it is qrly interest)and the MV is taken on the due date . In this case the MV as on 01.08.2012 ( after 24 mths) would be 173180.93.

The the value of car is as on the reference date. The cost of new car in October 2012 is given. In case there is a problem regarding the purchase of car – EMIs or interest dues during the tenure of the loan for the new car, one has to account for the nominal depreciation of 20% p a for 6 months, if the sale value is not given in the problem. Normally, the question would be clear about that.

## Tanu said

Thank u so much for answering all my questions , its a great help . I m still not clear about the ppf rate that i hv to consider 8.6 or 8.8 and also am i suppose to learn all the fact regarding small saving schemes nsc , scss, kvp etc or it will be given jn the exam . And if i have to then the open uploaded on the block are for 13-14 . I need it for 12-13 . S3 on fpsb site has a question on goal seek … Am i suppose to prepare myself for such a function . And can i ignore the question in agricultural income from exam point of view or not .

## Tanu said

And also we are making an sip then by default we will make the payment in the beginning of the year i.e. type1, if nothing is mentioned ? And in case of loan it will be @ the end of the year i.e. type 0

## R Varadarajan said

PPF rate applicable on the reference date ( April 2012) is 8.8% and this would be applicable. The same thing would apply to other Post office schemes, since the reference date is April 2012 and you should imagine that you are in April 2012 – put yourself back in the time machine to the refence date to analyse the question. However in most cases, especially in the case of PPF they give the rate of interest.Goal seek function is an excellant provision in the Open. In fact in some cases you can arrive at the answer by using this function once you know the concepts. In my case the first question was in respect of a corpus generation and the next question was what if the rate of interest and interst change !! With goal seek you can solve this in just few minutes – otherwise you have to rework the entire problem to find the change. Although it appears to be ” Greek & Latin” it is very simple concept and if you can formulate the changes in any of the present problems to get an idea of the function. With best wishes.

## Tanu said

Ok thanks and for replying and in case D . There is an investment in agricultural land . Can u brief me a lil about the same as in what will be the tax treatment or how will be deal with an investment in agricultural land . Can u guide me with the possible questions regarding the same . And also the credit card outstanding ?

## Prashant Shah said

Dear Tanu,

For credit card calculation you can refer to any credit card statement. Bank mentions the way to calculate interest on outstandings of credit card.

## R Varadarajan said

Dear Tanu,

Prashanji has already replied to your query on Credit card question. In respect of the Agri Land , I do not expect any major question excepting calculation of Capital Gain Tax or diverting the net amount after CG Tax towards some corpus. Although it is vast subject I am just giving a brieft of exemption under section 54 available for the Agricultural Land in respet of Individuals only.

Sale of Agricultural will attract capital gains tax subject to exemption under Section 54B, provided

( a)the agricultural land should have been used for agricultural purposes either by assess or his parents in the 2 years immediately preceding the date on which it is sold &

( b ) the assess should have purchased another agricultural land within a period of 2 Years from the date of sale for the whole amount of capital gain, or else the difference will attract Capital Gains Tax.

In case, the assessee is unable to purchase the new asset before submission of return ,such amount may be kept in the Capital Gains Account Scheme of any specified bank, to avail the benefit.

With best wishes,

R Varadarajan

## vikas said

I had my exam yesterday….cudnt clear it,missed it by 4 marks 😦 but need to admit that questions were complicated and a thorough practice of all the case studies is needed…will have to analyse my weak areas and improve upon them

## Pavan said

BTW, I am in my final year of my graduation. Now that I cleared all these exams, how and where can I apply for a job ? And, more importantly, what kind of jobs will I get ?

## Shashank Jain said

Dear Pavano

Even I am in final year. Pursuing BBS from SSCBS. I looked for jobs too. To my surprise every job in this field is open in Mumbai. Since I reside in Delhi, my parents are not comfortable with sending me outside NCR.

Even in Delhi, I could not find any job over and above sales. For freshers, its very hard.

Mumbai has highest number of Financial Planning jobs as it appears. Look for a job there only, you will definitely get one.

Regards

Shashank

## Shashank Jain said

Also, join FPSB page on Facebook and Linkedin. They advertise jobs in field on Financial Planning regularly.

Regards

Shashank

## BOB said

Dear All, I have an Advance paper in the first week of May. I also need explanation what Tanu asked about the tax treatment of agricultural Land in Case D. Is this urban land or a rural land? It is confusing as it is not saying anything about municipality.

## R Varadarajan said

Dear BOB, Here is the definition of Agricultural land.

“A land is classified as agricultural land if it is not situated in an area ( a ) within the jurisdiction of a Municipality, Municipal Corporation, notified area committee or cantonment board or ( b ) has a population below 10000 in the previous year’s census or ( c ) Notified by the Govt under Notification dated 06/01/1994”

However from the examination point of view, this may not be relevant, since the question/ case study would have classified the same as an Agricultural Land and the questions may involve either Capital Gain and/or utilisation funds from the sale of Agricultural Land.

## BOB said

Thanks varadarajan. I will treat it as urban land and will apply capital Gains on it, if question asks so.

@ Tanu, please update your status.

## Tanu said

I failed by 3 marks 😦

## BOB said

By the way, how were the questions? What exactly were the reasons you missed the goal? Well, before any success, there is always a failure. Failure means we need more perfection.

## R Varadarajan said

Cheer Up Tanu. You will do well in the next attempt. AS BOB has asked have you at least got some idea of the questions you faced and whether you would be able to solve them – forget about the answer, when you try to solve them at home. Just try and remember the questions for an introspection and strengthen those areas where you were found to be weak. With best wishes,

R Varadarajan

## Bhuvana said

Cheer up.:-) I think 30th April I will also write the same comment 😦

Could you please list out the type of questions appeared and did previous case studies helped? Which case studies did you get ?

## BOB said

Bhuvana, You are being pessimistic. Just believe in yourself. If you can crack the first 4 papers with ease, then the last paper will be a piece of cake for you 🙂

## Bhuvana said

Thanks BOB. 🙂 I am believing in 8case studies of 2010 and all the theory questions from 2008,09,10. What’s your take on this? Is this gonna be sufficient for clearing final module ?

## BOB said

You are going the right way! I am also doing some Investment, loans related questions or those questions which I find it difficult to crack from 2008 and 2009 case studies. However, the key is understanding the basic concepts. If they are clear, then it is very easy to crack the paper. The case studies of 2013 are much simpler than the previous years. So crack this paper at any cost before they upload new, probably tougher case studies, in future or I think in the coming times, they wont be uploading at all!!!.

In case, you are doubtful, then reappear for the paper within 15 days! Best Of Luck.

## Bhuvana said

Yes basics are really really important. Assuming I can manage to find answers(might take little extra time) confident about clearing now 🙂 yes 2013 case studies are simpler. Hear the questions are difficult 😉 fingers crossed for tomo’s exam.

## R Varadarajan said

Hi Bhuvana,

Read some of my earlier posts on the type of questions. Please work out physically( not only reading & understanding ), SP-1, SP -2, & SP 3 on FPSB website. In fact two of the case studies in the list are similar to SP-1 & SP -2. You may positively expect at least one/two 5 marks questions on the lines of SP -3. Best of Luck.

R Varadarajan

## Bhuvana said

Thanks Varadarajan 🙂 I follow all your posts. Read all the types of questions you mentioned in the comments. Yes I am also positive about sp-3. Hope I ll get more of similar questions. Approximately how many theory questions can I expect 2-3 marks including both the case studies ?

## R Varadarajan said

Good to hear about your committed preparation. You can expect around 8-10 theory questions and about 8-10 small problems – and the rest may be 3-4 in each case would be real crackers. Never mind. Start working on the theory and small questions which would give you some confidence. More important – carry water and some eats – as the exam would be for 4 hours and you should not be fatigued !!! With best wishes

## BOB said

Hi bhuvana, how was the paper?

## Bhuvana said

Hi, I cleared 🙂 thanks everyone for helping me directly and indirectly. The blog and the people have immensely helped for both individual and final module. In short for a final module oct 2009 to april 2010 case studies are almost enough to clear final module, provided you have strong TVM concept.

## aarvi1948 said

Cogratulations Bhuvana for clearing the Final Module . Please highlight the type of questions you faced for the use of others.

With very best wishes

R Varadarajan

## Prashant Shah said

Heartily Congratulations for the great performance.

Regret for the late reply.

Remain associated and help others to clear as you did.

Regards,

Prashant.

## BOB said

Big Congrats! Thanks for sharing your experience! Hope I too clear this coming paper! Yes, you are right this blog has also helped me in clearing all the first 3 papers in a month’s time. For the last Insurance paper, I had to give twice due to exam as per new pattern. Yes you are absolutely right, TVM concept is very important.

## Bhuvana said

I thought to mention type of questions that would help other CFP students who are appearing final module. I will mention question number of case studies for reference. Same to dame question except name and figure change. Yes I mean it. Do practice previous case studies. Certainly they will reappear.

Sahanubhuti and mahesh

1. Sp3 taxation – 5marks

2. Q10 Anjuman – 4marks

Urvashi

3. Q2 -2marks

4. Q10 – 4marks

5. Q13 – 2marks

6. House will be insured considering re-in statement value and contents of home with current market value, -2 marks

7. Find life cover for mahesh considering his wife’s life expectancy excluding kids education and marriage, 2marks

8. Money back insurance policy pays 15% of SA on 3/6/9/12 and 40% on 15th along with terminal bonus Rs 35 per thousand. Term plan available rs 750 for1lakh cover.find the rate of return. 4marks

9. Roger – q7 yearly 1lac instead of qtly contribution 5marks

10. Roger Q12 – 5marks

11. Roger Q14 – 4marks

12. Dr. Darshan Q20 – 2marks

13. Gold coin selling . Find capital gain tax -3 marks

As of now I remember these questions. Believe me, Oct 2009 to April 2010 case studies are more than enough. Prepare for high score. Aim for high in the exam. Small tips may be repeated. Still worth mentioning.

1. Carry chocolates

2. Adequate nice sleep at night before exam

3. Solve 2marks questions first. Read all the theory questions from 2009-2010

4. Aim to solve 50marks perfectly and keep writing the marks you solved after you get right answer. It will increase confidence.

5. Start solving only if you are sure about the answer. Else skip.

6. Spend close to 2hrs on 1st case study and evaluate how many perfect answers you got,

7. Move on to next case study in which already you have solved 2marks question. Attempt and make sure you have ready 50marks.

8. Now your time to aim for high score.

All the best:)

## Prashant Shah said

My suggestions are also same as Bhuvana and give more weight on 5th suggestion that is start only when you are sure.

Thanks,

Prashant.

## BOB said

Wow, beautiful! You are a really soul with a noble heart! Thanks a ton. 🙂

## Bhuvana said

🙂 help each other. Pass together. 🙂

BOB, VARADARAJAN, – can you suggest something to moderator or the people who want to help others, to help students even better.

## BOB said

How about online chatting? This way one can earn more positive points by helping others 🙂

## Bhuvana said

You are right BOB. But responder has to be active all the time to respond to students. Prashant is doing a great job helping everyone and giving platform to ask students difficulties. A noble cause. Thank you very much sir:)

Anyone has idea about any other websites which provide platform like this website ? It might help everyone here.

## BOB said

By the way, how were the questions? What exactly were the reasons you missed the goal?

## BOB said

Varadaranjan,

With reference to Sanjay’s case study (F), what will be the balance on 31st March 2012 in Equity Linked Saving Scheme?

“Started investment on 2nd February 2004 with 3000 units at price of Rs 12.68 per unit in an open ended ELSS scheme’s Growth option. Invested Rs 50000 at price of Rs 33.46 per unit on 18th Jan 2007. NAV as on 31st March, 2012 : Rs 69.0642 per unit.”

Equity MF scheme rate 11%.

## BOB said

will we simple multiply NAV of 69.0642 with 4494.321 units?

## R Varadarajan said

Yes BOB. You are right. Investment is in the Growth option and hence only the Latest NAV would give the current value ( as on 31/03/12).Intial Investment 3000 units and Units from the invesment on 18/07/2007 =1494.3215. Total Units 4494.3215 and the value – Rs.310396.72. You could expect a question on Captal Gains on the same

## BOB said

Thanks sir

## komal said

Respected Sir,

Virkant plans to invest regularly on a quaterly basis an amount of Rs. 3000 in his PPF a/c till its maturity. The amounts are proposed to be deposited in the first five days of july, october january, and april every year. He has made no transaction in his PPF a/c since the begning of this financial year. Vikrant wants to know the approximate maturity amount of his PPF a/c. ( Referance case : Vikrant SAHABJI , nov :2009)

I wanted to know how to calculate if the maturity year is 2012. how would the change in rate effect the problem. Please help me.

## komal said

Respected Sir,

Virkant plans to invest regularly on a quaterly basis an amount of Rs. 3000 in his PPF a/c till its maturity. The amounts are proposed to be deposited in the first five days of july, october january, and april every year. He has made no transaction in his PPF a/c since the begning of this financial year. Vikrant wants to know the approximate maturity amount of his PPF a/c. ( Referance case : Vikrant SAHABJI , nov :2009)

I wanted to know how to calculate if the maturity year is 2012. how would the change in rate effect the problem. Please help me.

Reply

## BOB said

if date of opening a ppf account is 1-july-2012, then maturity date will be 1st april, 2028. ( 2013+15).

## Bhuvana said

Interest applicable is given along with the question. It’s 8.8% for the reference date. Same is considered till the maturity.

Interest on PPF is calculated monthly and paid on 31st march of every year. Hence the contribution made on April will earn 12months interst, july contribution 9months interest and so on. Hope it helps.

## aarvi1948 said

Dep Int Total

April 3000 264 3264

July 3000 198 3198

Oct 3000 132 3132

Jan 3000 66 3066

Annual accruel 12660

If the account is opend in July then the the closing Balance as at the end of the FY 13 – as at 31/03/2013 9396

Annual deposit+ interest 12660

July 2012 – FV $431,413.94

You can use either the calculator or Open office.

If the account is opened in April 2012 then the same thing would change marginally as the closing bal as at the end of FY 13 would be 12660.

April 2012 $442,979.95

Perhaps Prashantji can add his guidance on the subject

## Prashant Shah said

Dear Aarvi,

I will reply soon.

Regards,

Prashant V Shah.

## shilpa said

I am preparing for advance financial planning module. Please assist me from where I can get 2008, 2009, 2010 case studies.

## Prashant Shah said

Dear Shilpa,

You can refer to AFP segment of this site to download the case studies.

Regards,

Prashant V Shah

## reena said

Hi sir I m preparing for advance financial planning module, I gave twice but couldn’t cleared up.Can u please guide me “how to calculate capital gain on demat account “?

## BOB said

OMG..It was a tough paper…really tough…except for one question, all other questions were new and a bit scarier..Anyway, I will go for Scarier Advance Paper Part 2..

## vikas said

Hii guys….cudnt clear the final exam yet again…scored 48 in 2nd attempt and 46 in 1st attempt,feels very frustrating..

These were the following questions that i remember from exam…please guys help know the strategy in solving these quesitons

1st case study Sahanabhuty(Please refer this casestudy)

1) Find the annual Effective rate on Interest on Car loan

2) In an equity dmat portfolio you have computed the Beta ofo portfolio to be 1.25with respect to CNX Nifty index.For hedging the downside potential in Portfolio

a) go long on Nifty index futures worth 27.5 lakhs

b) short sell Nifty index futures worth 27.5 lakhs

c) go long on Nifty index futures worth 17.5 Lakh

d) short sell Nifty index futures worth 17.5 Lakh

Sanjay Casestudy

1) You require corpus for holiday to withdrraw 75000pm(current price) from age of 45 till your lifetime . On retirement and post retirement withdrawal should be limited to 50000 pm (Current price ).Cost of escalation of holiday expenses is 6 % p.a .The corupus is accumulated throug equity MF by way of quarterly investment immediately .Once courpus is built up,funds for holidays for 5 year block periods would be switched from equity MF to debt MF .Find the amount of quarterly investment ?

Note- I know how to solve the present value of holiday expenses from 45 to retirement and from there till post retirement, but what strategy should be used with respect to switching funds in 5 yr block periods from equity to debt scheme ?

2 ) company plans to give Bonus share of 1 for 2 shares of fair value 10 As on 24 april 2012.Post bonus the outstanding stock of company will be entitled to a dividend of 125 % .Sanjay wants to buy back 10 shares at prevailing price of 800 per share .If he sells his originally bought shares after stock quotes ex-bonus at 600 per share then what is capital gain/loss ?

pls guys any help from you will be great 🙂

## BOB said

Hi Vikas,

Please refer to Sanjay case study, second question. I think this was the same question that was asked to me. But the question is not clear much. As far as I can understand. Sanjay wants to buy back 10 shares at price of Rs 800. At what these shares were bought? Is it Rs 600?

Bonus Shares will 5.

Please respond asap.

## reena said

I too got the same question .Can any body help how to solve this question?

## vikas said

@ bob… sorry sanjay wanted to buy back 100 shares at 800 per share .600 per share will be the cost if he wanted to sell his original shares after the stock quotes ex-bonus

## BOB said

Normally, a company buyback the shares. Anyway, Hope, Vardarajan or Prashant ji can give us some clues on how to solve this question.

## Prashant Shah said

Dear All,

Question sounds a bit off-track. But lets solve the question assuming it belongs to tax planning. The provisions of bonus stripping Section 94(8) are applicable only to units and not the equity shares. (I believe)

Hence, you may go for bonus stripping and set-off the loss against STCG.

However, I will confirm with the tax practitioner and confirm it soon.

Regards,

Prashant.

## Prashant Shah said

Confirmed with professional.

## vikas said

for 1st question in shanbhuti case i had done this,but options were 9.47 and 9.53 so i didnt know if this was correct or wrong ? need ur opiinion on this question and help for other questions

Car Loan

3/1/2009 1400000

3/31/2012 799000

EMI 25585

rate formula =RATE(NPER=36, PMT=25585, PV= 1400000, FV=0, TYPE= 0)

= 0079 Monthly 9.5% annually

## BOB said

Dear Vikas,

Since it is asking for an “effective” annual rate, we would to find the same for 9.5% which will give us 9.925%. What were the other options? But if we don’t have to find effective, then the answer would be simple 9.5% or 9.53%

## BOB said

OR, if we do it this way, Answer will be 9.53%…I= .791718…Find effective for it which will come to .794597. Multiply it by 12, the answer will come to 9.53516

## Bhuvana said

Same question I had got 30th April 13. 🙂

## vikas said

guys kindly help me with the answers of the foll theory questions…these hav been coming frequently

1) Sanjay get an offer from his company for two year overseas Job. On which date should he leave india to change his status as an NRI in this financial year 2010-2011.

a) On or before 29th Sept 2010.

b) On or before 28th Sept 2020.

c) Before 31st march 2011

2) you are having certain grievance to your insurance company regarding claim settlement. Which sequence you will approach to these entity.

a) Ombudsmen of Insurance company.

b) Consumer Forum and grievance redresses cell of insurance company.

c) Consumer court of Law Court of higher body.

3) If insurance company is not satisfy with your claim related document . Which of the following is not correct in this regard.

a) Insurance company should ask within seven day if there is any additional requirement they have.

b) Insurances company can do investigation regarding medical history financial and other search within Six month of submission of claim.

c) Sent letter to probable beneficiary and ask there consent before releasing the final settelement.

d) keep the money in bank till claim not settle and pay 2% higher then bank interest rate.

3)Sanjay want to sell his second house. You help him to find broker for him without any fee. Sanjay asking you which code of conduct you are not following as per FPSB

a) Confidentiality, integrity

b) Confidentiality and fairness.

c) Fairness and professionalism.

d) Fairness and Diligence.

4) You collect qualitative information of the client.Which criterion will you not necessarily use while profiling the client?

a) Client’s family attachment

b)Client’s ability to handle new circumstances

c)Client’s social networking and cohesiveness

d)Client’s belief, tradition and faith

e)His risk taking appetite

5 ) Your friend meets with an accident with your car having third party insurance , you friend has to defend that the accident has happened in spite of our best efforts the prosecution has to prove that the driver was negligent

## smitk282 said

Dear Vikas,

answers for ur 1) que is b)

2) a)

3) c)

4) c)

These are correct answers for ur questions.

Thanks&Regards

Smit, CFP

## Bhuvana said

Thanks for your answer. In the final module expect repetition of theory question from previous papers. Blindly you can mark the answers.

## Prakash said

Dear Sir,

I am qualified MBA (Fin.), CFA and CAIIB. I am working with SBI and planning to enroll for challenge status exam. Can you please suggest me some reference books required to clear the challenge status exam?

Thank You.

## Prashant Shah said

Dear Prakash,

There has been no proper study material prescribed by FPSB till now. As you have got many good qualification in your basket cracking the course will be easy. Still I recommend you to study all the subjects thoroughly as all your qualifications are in the field of corporate finance and CFP is purely personal finance. You can download LOS from FPSB’s website and read all the relevant topics from the reference books. Following books may be useful

Insurance planning: New IC33 and IC34

Investment planning: Prasanna Chandra

Tax Planning: VK Singhania

Retirement Planning: Internet and Earnst and Young

Introduction to FP: Earnst and Young and internet

Advanced FP: Case studies

You may have to search a lot on internet to find some of the topics of LOS. However you can also find material posted on this site and I am also working hard to post new and improve existing content

Regards,

Prashant.

## Prakash said

Dear Sir,

Thank you very much for your valuable suggestions. I really found your study material very useful.

I need some clarification for challenge status exam. As per website ” The format of Exam 5: Advanced Financial Planning is the Case Study format where a candidate would be required to solve a set of 30 question items based on any two of a set of case studies. The probable case studies will be displayed on FPSB India’s website at least 7 days prior to a candidate’s scheduled date of exam. Any two of these case studies would appear (in random selection) for every candidate who logs in to appear in the examination.”

It means candidates are already aware of the exact questions in the examination one week before. Please clarify.

Thank You.

## Prashant Shah said

Dear Prakash,

FPSB has already placed probable case studies for the year on the website. These will contain text and not the questions. Questions will appear only in the exam.

Prashant.

## Bhuvana said

You will know only the information of a client. Refer one of the case study uploaded on this blog or Fpsb site. You can yourself frame the questions based on the case studies to help you in exam. No way questions pertaining to the case studies will be available before exam.

## Neha said

Please confirm the answer of this question-

In an equity dmat portfolio you have computed the Beta ofo portfolio to be 1.25with respect to CNX Nifty index.For hedging the downside potential in Portfolio

a) go long on Nifty index futures worth 27.5 lakhs

b) short sell Nifty index futures worth 27.5 lakhs

c) go long on Nifty index futures worth 17.5 Lakh

d) short sell Nifty index futures worth 17.5 Lakh

Answer- b)

## Prashant Shah said

Dear Neha,

You have not mentioned value of the portfolio.

You must be aware that beta measures sensitivity with market index. So when you want to hedge using index futures, value of the portfolio should be multiplied with beta to arrive at value of futures to be sold.

Say portfolio = 100

Beta = 1.1

Short futures = 110 to remain at level volatility.

Feel free to ask further.

Prashant.

## Neha said

Dear Prashant ji,

The value of the demat aacount- shares given is 21.92 lakhs. So option b is the correct answer.

## Koustubh S. Vaidya said

Why and how Sir.

## reena said

Hi sir

I am looking for solved numericals based on gold etf ?

## komal said

Respected Sir,

I again couldn’t clear the final module. I had done all the cases of 2009 and 2010. The questions in case 2 are quiet complicated. Can any help ,me in preparing for exam again.

Regards,

Komal.R.Shah

## BOB said

Finally cleared the last module. Thanks Prashant Sir for creating this blog for directionless wannabe CFPs.

## Prashant Shah said

Congratulations!

Thanks for appreciation. Keep helping all.

Regards,

Prashant.

## reena said

Hi BOB

how was the paper? is the same case study sanjay and Sahanubhuti , please can you guide how to prepare for the exam?I am trying hard but always got in between 40 marks .

## Anuj said

Hi all, I need help in the topic income from house property. its regarding calculation of interest on borrowed capital. this is the problem:

X takes a loan of Rs. 40,000 at 15% pa for constructing a house on June 10,2007. construction of house is completed on Jan 20,2013. date of repayment of loan is 16th Jan 2018.

According to me pre-construction period is from 10.6.2007 to 31.3.2012. thus no. of days using days function of FC comes to 1756 but since both exclusive it will be 1757. thus total interest will be 1757/365*40,000*0.15 = 28,882.19.

however the solution says it is 28,852. where am I going wrong ?

## Prashant Shah said

Dear Anuj,

Your calculation for pre-construction period is correct. I am also getting an answer of 28800. Let me check it once again and will conclude whether the given solution i.e. 28852 is correct or not.

Regards,

Prashant.

## R Varadarajan said

Dear Anuj,

According to me, we should take the number of days and convert them into fraction of the year only for number of days less than 365, since there could be leap years in between in which case 366 days would make a year instead of 365 days.

In this case, for the first FY2007/08, i.e 10/6/2007 to 31/03/2008,we get 296 days which would work out to be 0.808743 years ( total 366 days for the year). To this add 4 years, you get 4.808743 and the interest for the same comes to 28852.45 app@ 15% on Rs.40000. Trust this clarifies the position

I missed out on the leap year ( 2008) after correcting this the answer comes correct.

Perhaps Prashantji can throw some light on this

## Prashant Shah said

Dear Anuj,

Your calculation for pre-construction period is correct. I am also getting an answer of 28800. Let me check it once again and will conclude whether the given solution i.e. 28852 is correct or not.

Regards,

Prashant.

## R Varadarajan said

Dear Anuj,

According to me, we should take the number of days and convert them into fraction of the year only for number of days less than 365, since there could be leap years in between in which case 366 days would make a year instead of 365 days. In this case, for the first FY i.e 10/6/2007 to 31/03/2008,we get 295 days which is 0.080219 yrs. To this add 4 years, you get 4.808219 and the interest for the same comes to 28850.00 app.

Perhaps Prashantji can throw some light on this.

## Anuj said

Dear Varadarajan, thanks for your reply, it was helpful but doing it on FC will be more accurate I think. this is because FC takes into account the leap years. well lets see what Prashant Sir has to say.

## aarvi1948 said

Dear Anuj,

While I do agree with the calculation of number of days between the two periods as 1757, through FC, when you convert that into No of Years you are dividing by 365 – and makes it as 4.81369 Yrs. However, since two leap years are involved in between, ( ie 2008 & 2012 ) the which will have 366 days the number of years gets distorted. Therefore you have to convert only the fractional year ( 10/06/07 – 31/03/08) into years = 296/366 = 0.808743 years. Adding the 4 full years to it, it would be 4.808743. The interest for 4.808743 yrs at 15% for Rs.40000 would be Rs.28852.00 as shown in the answer. Trust this clarifies the position

## Anuj said

Dear Aarvi, thanks a lot, it was helpful.

## ankith seth said

hey guys im writing exam on 9th july and im totally blank of wat im gona do… i hope i just clear this…

## Harry said

Best of Luck Ankit, hope you will clear this, just share your views after you attempted the exams..

## ankith seth said

yea sure harry… 🙂

## sameer said

hey ankith!!!!!

how was it ????

did u clear???

## ankith seth said

yup cleared :):):)… it was bit tough… bt cleared it :):)…

## reena said

Hi Ankit how was the paper??Can you please share what was the topic they asked in exam…

## ankith seth said

heyyy i cleareddddd :):):).. im sooooo happyyyy :)….. never believed i could clear it in first attempt bt did it.. :):)… paper was bit tough… dnt remember d questions exactly… bt ya were near to same question which r generally asked bt twisted here n there to confuse us… anyone among us could have cleared it :):)

## Prashant Shah said

Heartily congratulations.

And regret for a very late reply.

Prashant.

## ankith seth said

thank u prashant sir 🙂

## Harry said

Hi Prashant,

I have a question for Insurance Paper which appeared on 11th July 2013 , would like to have a solution. My friend had given the exam.

Q: XYZ bought a pience of land in April 2001 for Rs. 45 Lacs. He got a factory built on the land at a cost of Rs. 70 lacs, the factory became operational on 1st August 2003. The land prices have appreciated at 14% per annum in the period and the construction cost has esclated at 15.50% per annum since 2003. At what value the factory should be insured in June 2013 on market value basis if the depreciation on factory premises is charged at 8.25% per annum on written down method? The current market value factory is 1.8 Crore.

Can you please provide me the solution for this.

Harry

## Prashant Shah said

Dear Harry,

Similar question is there in FPSB sample i.e.

A businessman bought a piece of land in March, 2002 for Rs. 80 lakh. He got a factory built on the land at a cost of Rs. 90 lakh, the factory became operational on 1st September, 2005. The land prices have appreciated at 15% per annum in the period and the construction cost has escalated at 12% per annum since 2005. At what value the factory should be insured in April, 2013 on Market Value basis if the depreciation on factory premises is charged at 6% per annum on straight line method?

Cost of land in 2002 8,000,000

Cost of construction in 2005 9,000,000

Cost escalation 12%

Cost of construction in 2013 22,283,669 9000000*(1+12%)^8

Depreciation rate (on SLM method)- 8 years 6% p.a.

Therefore, sum insured on market value basis 11,587,508 22283669*(1-8*6%)

## Harry said

Thanks Prashant for the reply, but i would like to know why in the question the current market value of 1.8 Crore is given ( we need to ignore the same), do we need to consider this or solve the question the way you have done..

Please suggest..

## Prashant Shah said

Dear Harry,

Current MV = 1.80 crore

Now reduce depreciation from this. Dep amount is =1.04 crore (WDV)

Hence the Factory can be insured at 1.80-1.04 = 76 lakh.

Was this the option in exam?

I also need someone to confirm this calculation.

Regards,

Prashant.

## Harry said

Thanks Prashant, My friend is unable to remember the options (answers) but he remembered the question, what I am thinking that you need to calculate the market value according to appreciation of construction and also consider the depreciation, and arrive at the effective market value.

and we need to compare this arrived market value with given current market value in the question, so whichever is higher we need to insure that particular amount of insurance. Correct me if I am doing right.

Thanks in advance

Harry

## Harry said

Hi Prashant,

Can you please suggest some solution for my query.

## Anuj said

hi all, I have a doubt in sample paper of tax planning. this is the question:

A trust is created by a son, the Settlor, for the survival expenses of his retired parents each having equal beneficial interest. Both husband and wife have separate fixed pension of Rs.35,000 per month and Rs. 20,000 per month, respectively. The trust property has generated a net annual value of Rs. 5.12 lakh in the previous year 2012-13. The trustee as well as the Settlor is in the 30% tax bracket. Find the tax payable by the trustee as representative assessee.

solution: Pension (Inc. from Salary) of the male beneficiary

420,000

Rs. p.a.

35000*12

Pension (Inc. from Salary) of the female beneficiary

240,000

Rs. p.a.

20000*12

Net Annual Value from trust property in FY2012-13

512,000

Rs.

Assessable taxable income of male beneficiary

676,000

Rs.

420000+512000/2

Assessable taxable income of famale beneficiary

496,000

Rs.

240000+512000/2

Tax on the income from trust of male beneficiary

43,200

Rs.

(676000-500000)*20%+(500000-420000)*10%

Tax on the income from trust of female beneficiary

25,600

Rs.

(496000-240000)*10%

Total tax assessbale on trust income

68,800

Rs.

43200+25600

(Tax + Cess) payable by truste as representative assessee

70,864

Rs.

68800*(1+3%)

70,860

Rs.

I did not understand how tax is charged here.

## Anuj said

Hi everyone. Can anyone explain me how goal seek function is to be used in Q.3 (retirement-2) in SP-3 (uploaded by fpsb). I tried it in excel several times. Any help is appreciated.

## Manish said

Dear Anuj,

Goal seek is very helpful inbuilt function in excel.I tried it and here is my take on usage of goal seek in the stated sum.

## Manish said

1.)In the first question we are required to compute “what return should be aimed to achieve the goals so that we can invest 50294015 Rs. instead of 50824331 Rs.(which is more than previous computed corpus).

## Manish said

a.)on the data tab click what-if analysis and then click goal seek

b.)in the “set cell” box you need to click that cell in which you have computed “revised corpus needed to meet goals i.e 50824331 Rs”

c.)in the “to value” box you need to type “50294015”Rs manually without clicking the cell.

d.)in the “by changing cell” box you need to click that cell in which you have typed ” 9%”.

## Manish said

click ok.the goal seek feature calculate the formula and then you will see the “9.10%” appeared on the cell in which you have typed 9% before.

2.)In the same way we will solve the second question

In this we are required to calculate the moderated amt if we want the 9% return on our investment that means it is not possible to achieve the exact 1 crore Rs with the 9% return on our investment ,Therefore we need to forego some of it.

a.)in the “set cell” box click that cell in which you have computed “revised corpus needed to meet goals i.e 50824331 Rs.”

b.)in the “to value” box you need to type “50294015”Rs manually without clicking the cell.

c.)in the “by changing cell” box you need to click that cell in which you have typed “1 crore Rs”.

click ok and then you will see Rs.9014975 appeared on the cell in which you have typed 1 crore before.

Thats it and let me know if you need any further help.

## Anuj said

In the first sum when i select the cell containing 9% it gives error saying “cell must contain a value”

## Manish said

Dear Anuj,

in which box you have clicked that cell. R u talking about “by changing cell” box?

## Anuj said

yes..

## Manish said

Dear anuj,

i don’t see any error when i tried this function again i suggest you to recheck all the steps again and let me know if u face the same problem or not.

## Anuj said

Dear Manish Sir,

I got it. Thank you for the elaborate explanation,it helped.

## Anoop said

1) In April 2011, Rajeev has invested Rs 60,000 in XYZ Ltd (unlisted), face value of the share was Rs 10. Market Value of one share – Rs 525. The stock split happened in Dec 2011 by which the face value has been reduced to Rs 2 of 5 shares. Today he want to sell the shares when the market value is Rs 628. Compute the Capital Gains

## Jasbir singh said

Dear anoop

It’s a long term capital gain of 298110. as he purchased 114@525 RS, now stock split happened in dec 2011 by which face value has been reduced to Rs 2 of 5 shares, similarly the cost of investment per share also reduces from 525 to 105 and number of share get multiplied by 5 (114*5=570). Now considering the language if he sells today(on 23-aug,2013. date when question posted) @628. he made profit of 523(628-105) per share. Thus total capital gain is 298110 (523*570). And this will be considered as long term capital gain as it is for more than 1 year, no matter it is unlisted company.

## Prashant Shah said

Dear Jasbir,

Methodology suggested by you is correct.

Since the shares are unlisted we may have to calculate tax on the higher of the two

1. on 10% basis

2. on 20% basis with indexation.

Regards,

Prashant.

## Anuj said

Hi all,

This is in reference to the case study Urvashi Solanki.

I didn’t get this question:

Urvashi wants to invest regularly Rs. 50,000 p.a. for 20 years in National Saving Certificate (NSC)starting from today. She would reinvest the maturity amount in each year from the beginning of the7th year till the 20th year along with regular yearly investments in the NSC. From the 21st year she would invest the maturity proceeds of NSC in a liquid MF scheme. She wants to know the total corpus which would be available at the time of her retirement? (Please ignore taxes and charges if applicable).

Any help is appreciated.

## Ashok Kotha said

Dear all cleared final paper with B grade.

## Anuj said

Congratulations Ashok

‘B’ sounds great !

What kind of questions were asked..

## Anuj said

Hi all,

Cleared Final Module with B grade. This blog was indeed very helpful. Would like to thank all for their valuable inputs.

## Prashant Shah said

Congratulations!!!

Can you suggest which kind of questions did you have?

What was the rigor?

Regards,

Prashant.

## Anuj said

Thank you. In my opinion case studies of 09 & 10 are important. Questions are on similar lines. If one is thorough with them exam should not be difficult. Time is not a constraint if one is confident about calculations.

## Mit said

Hi all,

I cleared my exam five in first attempt 2dy 🙂

the 1s case was not every difficult cz almost everything ws from previous case studys and if u know the concept well. and d 2nd case study sanjay’s was very tough . everything ws new to me d 4 n 5 maker. 3 question wer der to find net worth..

n sir, can i know what job opportunity is available to me? im in my TY now.

and thank you everyone for the help. its a great thing done by prashant sir and all. this blog is very awesome and helpfull.

## Ashok Kotha said

Thanks Anju

## Nikhil shah said

Hi Mit, Can you share some latest type of questions which you have got in exam.

## Nikhil Shah said

Hi I am new in this group, I was regularly following comments by Prashant sir and other members in this group. I am Nikhil Shah belongs to pune. I just today only booked my seat for final module on this coming 28 Oct 2013. It will be very helpful for me if they can share some questions which they do remember. Who has given exam recently and if he do remember some type of questions.

Reply

## ketan parmar said

Respected Sir,

I had appeared for AFP exam on 12 th october,2013 but unfortunately I got 49% and fail.I had been asked gurprit das case. I have asked bellow question for 5 marks of trip abroad goal that he redeem 20% amount 4 years before trip another 40% 2 years before the trip and 100 % when trip strat. he redeem and invested in risk free invesment.so what amount he should set aside in equity portfolio to achieve his goal.

please provide me solution for above question.

## nikhil shah said

hi ketan can you share this from where he redeemed money and . If you can share more information on this question then probably it will help.

## ketan parmar said

Dear Sir,

He Undertake a trip abroad with both kids on his attaining 53 years of age. The current cost of

such trip is Rs. 10 Lakh. his present age 43 years. equity return 11 % and risk free rate is 6.5%.I had asked this question in 12 th october final exam.This question is very important because it asked second time.Question is same as i posted on this blog.

## vaishalitulpule said

Do we get hard copy of case studies in exam

Regards,

Vaishali

## Prashant Shah said

Dear Vasishali,

FPSB doesn’t provide hard copies.

Regards,

Prashant

## Vidya Gholap said

Hi.

I am Vidya Gholap.I am new in this group.I have completed 4 modules & planning to give final module in next month. 1.I am vary confused.Past case studies are enough or I should revised all 4 modules?

2.How to calculate XIRR?(Mutual fund SIP returns Plz give me 1 example at least for 1 year)

3.How to calculate Bank RD returns?(PMT-500,I/Y-8.75%,N-12)I have tried but not getting exact answer.

## Vidya Gholap said

What is the difference between open office & Excel?

## R Varadarajan said

They are just the same except that ( a ) Excel is from MS office Microsoft ( under Licence) and Open Office is a free down load from( Apache ) & ( b ) there are some minor difference in the command formats between the two

## vaishali tulpule said

1) Mr S aged 30 years is saving for the last 11 years in a Savings account giving a 3.5% p a. He is in the habit of increasing the amount by a fixed sum of Rs.2000 every year. If he deposits Rs.25000 in 12th Year what will be the corpus he will accumulate at the age of 60, if the rate of inflation is 11.68%

Answers a ) 2980330 ( b ) 3251251 ( c ) 2523252 ( d )3322531

Correct answer ( a ) 2980330

2) Project A has a 10 percent cost of capital and the following cash flows:

Project A

Year Cash Flow

1 -Rs.9000

2 3000

3 4500

4 6000

5 1500

What is Project A.s payback period?

A. 2.25 years

B. 2.36 years

C. 2.43 years

D. 2.57 years

Answer D

3) Ramesh has an accident insurance policy which pays temporary partial Disability (TPD)

benefit of Rs. 5000 per week, for up to 104 weeks. He meet with an accident and is

disabled and bedridden for 6 months. He has available leave of 4 weeks, after which he is

on loss of pay. What benefit amount will he get from the insurance company?

A. Rs. 100000

B. Rs.110000

C. Rs. 220000

D. Rs. 130000

Answer B

4) Ravi bought an endowment plan for 35 years on 20 Dec 2003 for a sum assured of Rs. 3

lakh wherein quarterly premium is Rs. 2500. Quarterly premium due in December 2009 for

this policy was paid on 06/01/2010. Ravi wants to know what amount of claim would be

payable to his nominee under the policy in case he dies today? Vested bonus under the

policy in Rs. 120000 including bonus declared after valuation on 31/03/2009. For

calculation purposes assume interim bonus paid to Ravi till his death shall be Rs. 40 per

thousand sum assured.( Today is 24 Jan 2010)

A. Rs. 4,32,000

B. Rs. 4,24,500

C. Rs.4,37,000

D. Rs.4,34,500

Answer B

5) The Weight of wheat in the consumption basket of a person is 20%. The price of wheat

has gone from Rs. 10 per kg to Rs. 20 per kg. Assuming other costs remaining the

same what is the weight of the wheat in the total expense basket now?

A. 20%

B. 25%

C. 30%

D. 33.3%

Answer D

6) A person holds a share as well as a mutual fund scheme in his retirement portfolio in

equal porportion. Due to poor market conditions the share prices moves from Rs. 330 to

Rs. 290 while the net asset value of the scheme goes from Rs. 13 to Rs. 12.4. What is

the total impact on his portfolio?

A. 8.36%

B. 8.56%

C. 8.76%

D. 8.96%

Answer A

7) As a financial Planner you have been explaining to lovish the risk of a portfolio, its

analysis and implications. This has raised considerable interest in his mind and he

requested you to calculate the risk on his mother.s portfolio if the proportion of the higher

risk security in the portfolio is increased to 70%? ( the portfolio comprises of two

securities A and B, their Standard Deviation being 12.26 and 14.58 respectively, while

the correlation Coefficient is 0.89)

A. 13.04

B. 184.50

C. 170.26

D. 13.58

Answer D

8) On 10th march 2010 Ravi had taken an open short position of 10 lots of nifty futures, with

an average price of Rs. 4450. On 10th march 2010 nifty closed at Rs. 4520. However, he

did not square off his position until 11 march 2010 when Nifty dipped to an intraday low of

Rs. 4395. He squared off his position of 4 lots at Rs. 4495 & remaining 6 lots on an

average price of Rs. 4410. On 11th march 2010 Nifty closed at Rs. 4460. The lot size of a

nifty future is 50. What profit or loss was booked by Ravi on his entire position? ( assume

brokerage and taxes per lot is RS. 50 on each side, while buying as well as selling)

A. Profit of Rs.2000

B. Loss of Rs. 2000

C. Profit of Rs. 3000

D. Loss of Rs. 4000

Answer A

9) Mahesh wants to invest in shares of XYZ ltd the details of which are as follows:

– Required rate of return is 16%.

– Face Value Rs. 10/-

– Expected Dividend payout ratio is 30%.

– Expected return on Equity is 20%

What price would you recommend for a share of XYZ Ltd?

A. Rs. 140/-

B. Rs. 150/-

C. Rs. 160/-

D. Rs. 120/-

Answer B 150

10)

Vijay’s Mutual Fund investments consist of four different funds. Performance of these funds are as

follows:

Mutual Fund Fund Return of 5 years Beta

A 18% p.a. 1.25

B 14% p.a. 0.85

C 16% p.a. 1.02

D 17% p.a. 1.20

How would you rank these funds from the best to worst on the basis of Jensen’s Alpha?

A) A,D,C&B

B) A,B,C&D

C) C,B,A&D

D) D,A,B&C

Answer is C)

11) A 10 year 8.0% bond (Face Value- Rs.1000, interest payable semi-annually) maturing 6 years from today is

available at a yield to maturity of 6.0%. It is likely to be priced at _______________.

a. 1100

b) 1149

c) 1168

d) 1498

Solution (a)

12) Mahesh wants to invest in shares of XYZ ltd the details of which are as follows:

– Required rate of return is 16%.

– Face Value Rs. 10/-

– Expected Dividend payout ratio is 30%.

– Expected return on Equity is 20%

What price would you recommend for a share of XYZ Ltd?

A. Rs. 140/-

B. Rs. 150/-

C. Rs. 160/-

D. Rs. 120/-

Answer is B)

## vaishali tulpule said

Dear Prashant Sir,

I am going to appear for final moduel on 31st oct can you help me out for solving below mentioend problems.

1) Mr S aged 30 years is saving for the last 11 years in a Savings account giving a 3.5% p a. He is in the habit of increasing the amount by a fixed sum of Rs.2000 every year. If he deposits Rs.25000 in 12th Year what will be the corpus he will accumulate at the age of 60, if the rate of inflation is 11.68%

Answers a ) 2980330 ( b ) 3251251 ( c ) 2523252 ( d )3322531

Correct answer ( a ) 2980330

2) Project A has a 10 percent cost of capital and the following cash flows:

Project A

Year Cash Flow

1 -Rs.9000

2 3000

3 4500

4 6000

5 1500

What is Project A.s payback period?

A. 2.25 years

B. 2.36 years

C. 2.43 years

D. 2.57 years

Answer D

3) Ramesh has an accident insurance policy which pays temporary partial Disability (TPD)

benefit of Rs. 5000 per week, for up to 104 weeks. He meet with an accident and is

disabled and bedridden for 6 months. He has available leave of 4 weeks, after which he is

on loss of pay. What benefit amount will he get from the insurance company?

A. Rs. 100000

B. Rs.110000

C. Rs. 220000

D. Rs. 130000

Answer B

4) Ravi bought an endowment plan for 35 years on 20 Dec 2003 for a sum assured of Rs. 3

lakh wherein quarterly premium is Rs. 2500. Quarterly premium due in December 2009 for

this policy was paid on 06/01/2010. Ravi wants to know what amount of claim would be

payable to his nominee under the policy in case he dies today? Vested bonus under the

policy in Rs. 120000 including bonus declared after valuation on 31/03/2009. For

calculation purposes assume interim bonus paid to Ravi till his death shall be Rs. 40 per

thousand sum assured.( Today is 24 Jan 2010)

A. Rs. 4,32,000

B. Rs. 4,24,500

C. Rs.4,37,000

D. Rs.4,34,500

Answer B

5) The Weight of wheat in the consumption basket of a person is 20%. The price of wheat

has gone from Rs. 10 per kg to Rs. 20 per kg. Assuming other costs remaining the

same what is the weight of the wheat in the total expense basket now?

A. 20%

B. 25%

C. 30%

D. 33.3%

Answer D

6) A person holds a share as well as a mutual fund scheme in his retirement portfolio in

equal porportion. Due to poor market conditions the share prices moves from Rs. 330 to

Rs. 290 while the net asset value of the scheme goes from Rs. 13 to Rs. 12.4. What is

the total impact on his portfolio?

A. 8.36%

B. 8.56%

C. 8.76%

D. 8.96%

Answer A

7) As a financial Planner you have been explaining to lovish the risk of a portfolio, its

analysis and implications. This has raised considerable interest in his mind and he

requested you to calculate the risk on his mother.s portfolio if the proportion of the higher

risk security in the portfolio is increased to 70%? ( the portfolio comprises of two

securities A and B, their Standard Deviation being 12.26 and 14.58 respectively, while

the correlation Coefficient is 0.89)

A. 13.04

B. 184.50

C. 170.26

D. 13.58

Answer D

8) On 10th march 2010 Ravi had taken an open short position of 10 lots of nifty futures, with

an average price of Rs. 4450. On 10th march 2010 nifty closed at Rs. 4520. However, he

did not square off his position until 11 march 2010 when Nifty dipped to an intraday low of

Rs. 4395. He squared off his position of 4 lots at Rs. 4495 & remaining 6 lots on an

average price of Rs. 4410. On 11th march 2010 Nifty closed at Rs. 4460. The lot size of a

nifty future is 50. What profit or loss was booked by Ravi on his entire position? ( assume

brokerage and taxes per lot is RS. 50 on each side, while buying as well as selling)

A. Profit of Rs.2000

B. Loss of Rs. 2000

C. Profit of Rs. 3000

D. Loss of Rs. 4000

Answer A

9) Mahesh wants to invest in shares of XYZ ltd the details of which are as follows:

– Required rate of return is 16%.

– Face Value Rs. 10/-

– Expected Dividend payout ratio is 30%.

– Expected return on Equity is 20%

What price would you recommend for a share of XYZ Ltd?

A. Rs. 140/-

B. Rs. 150/-

C. Rs. 160/-

D. Rs. 120/-

Answer B 150

10)

Vijay’s Mutual Fund investments consist of four different funds. Performance of these funds are as

follows:

Mutual Fund Fund Return of 5 years Beta

A 18% p.a. 1.25

B 14% p.a. 0.85

C 16% p.a. 1.02

D 17% p.a. 1.20

How would you rank these funds from the best to worst on the basis of Jensen’s Alpha?

A) A,D,C&B

B) A,B,C&D

C) C,B,A&D

D) D,A,B&C

Answer is C)

11) A 10 year 8.0% bond (Face Value- Rs.1000, interest payable semi-annually) maturing 6 years from today is

available at a yield to maturity of 6.0%. It is likely to be priced at _______________.

a. 1100

b) 1149

c) 1168

d) 1498

Solution (a)

12) Mahesh wants to invest in shares of XYZ ltd the details of which are as follows:

– Required rate of return is 16%.

– Face Value Rs. 10/-

– Expected Dividend payout ratio is 30%.

– Expected return on Equity is 20%

What price would you recommend for a share of XYZ Ltd?

A. Rs. 140/-

B. Rs. 150/-

C. Rs. 160/-

D. Rs. 120/-

Answer is B)

Regards

Vaishali Tulpule

## Jasbir singh said

Dear vaishali,

Thanx for sharing question, i have solved 2nd, 5th and 6th. I m sharing the solutions for that

2)

in this question we have to find present value of cashflows

0 year -9000

1 year end 3000 =pv(10%,1,,-3000) $2,727.27

2 year end 4500 =PV(10%,2,,-4500,) $3,719.01

3 year end 6000 =PV(10%,3,,-6000,) $4,507.89

now here we can she that in 2 years, cashflow that we get is 6446.37 and remaining we need is 2553 (9000-6446.37)

now in third year we get 4507.89 and requirement is just 2553.63

(2553.63/4507.89)= 0.566, hence we get 2years+0.566 years

5)

10Rs=20%

? =100%

we get 50Rs,

Now everything remaining same and wheat prices rises from 10 to 20 than total basket price will be 20+40(price of remaining commodity) =60

20/60*100= 33.33%

6)

now lets assume he have 1 share of 330 and for MF, units of same amount

old amt

equity 330 1

mf 330 330/13=25.384615

660

new amt

equity 290

mf 25.384615*12.4= 314.7692308

we get, 604.7692308

now ((660-604.769)/660)*100

I will try to solve remaining sums and will comment

Regards

Jasbir singh

## vaishali tulpule said

Dear Jasbir Sinngh,

I had appered for exam on 31st but could not clear and fail with 49 marks, where as while completing the paper before submission i expected to get A grade , but surprised to see result as fail and very much demotivated , kindly suggest how to study.

I had gone through all case studied since 2008 and tried solving the same in open office

and done capital gain , salary, clubbing in IT.

Regards,

Vaishali

## reena said

Few things u need to do very carefully

Check the decimal digit..u may find the answer ie 28.23 ,28.235 choose the 28.235 answer

Sometimes question asked in manner take the value nearest possible digit.( take it as whole number)

Solve all question which is given on fpsb site “exam 5 and all 4 module”( redemption is important)

home loan interest and principal calculation

Concentrate on credit card related question.(may ask in the exam check this link http://www.pnbcard.in/Documents/mitc.pdf)

## R Varadarajan said

Very unfortunate Vaishali. Don’t worry. You will do well in the next attempt. Concentrate on all the case studies from 2008 and also all the worked out examples in the FPSB website. Reverse Mortgage, Credit Card Interest and Purchase on EMI may be looked into.

With best wishes,

R Varadarajan

## Jasbir singh said

Dear vaishali,

I believe you got the perfect answer, and it is very unfortunate to hear that. I don’t know what to say but for this, I would suggest you to take time to figure out where you lack, what is required to clear? its not about questions and answers, Its all about the content and concepts that will help you clear not only this exam but the real Job of financial planning and believe me failing in one trial itself give you reason to prove that you deserve A and that’s why computer screen didn’t show grade B or C.

Always be blessed

Regards

Jasbir singh

## umesh said

Hi, I am new to this group…..I am planning for my final module on 24th December. Can some one help me understand the difference between xl and open office xl ?

## Prashant Shah said

Dear Umesh,

Microsoft excel is much more user friendly. Download open office and see the difference. Bitter fact is we will have to use open office in exam which none of us is going to use in real life.

Regards,

Prashant V Shah

## umesh said

Thank you Mr Prashant.

Is there negative marking for final module..?

Umesh Prabhu

## yashmuthreja said

Hello everyone !! Has anyone given the exam of AFP module lately ?? If yes, then please help me with some insights. I have my exam tomrrow.. I have done the 2009 and 2010 case studies… What else can i do ?? What type of questions are being asked these days ?? Please help me.

Regards

Yash

## bhavesh vora said

hi i am appearing for final exam on 24th dec pl provided me with the latest question which are been asked in exam so i can prepare well l for the same

## Vidya Gholap said

Loan amount Rs.7000000@10.50%for 15 years.The amount is to be paid in installments.15%on 01/04/12,30% on 01/09/12,30%on 01/12/12 & balance on 31/03/13.Construction was completed on 31/03/13.What would be the deduction u/s 24 & 80 C for F.Y.2012-13?

## seenuariga said

Hi, I am new to this group…..I am planning for my final module on Jan 31st. Can some one help me

## tanutng said

Hi, I am appearing for final exam on 8th Jan,kindly help me and guide me for last preparations.

What type of questions are repeated,if anyone can update,it will be very useful.

## zalakthakker said

Dear all,

can anyone pl help me for following question ( post by R Varadarajan comment no 15 ) qustion no 7 & 8 ( ref – sanjay case

7.Credit card payment delayed and full payment made on 10 th March as ag due date of 7th with the amount Rs.11700.The charges are 2.95% interst and penalty of 30% of the minimum payment of 5%. What will be charge in the next statement with information on new purchases as well.

8.Calculate the Income Tax due if the Loss on the house property is Rs.45000, interest on SB Rs.6500 and interest on FD – 9500/ ( I do not remember the exact amounts of the interests)

(mahesh and neelam case)

7.TV purchase at Rs.150000, initial payment Rs.20000 and balance to be paid after 6 months in 6 monthly instalments -interest is charged at 14% p a compounded quarterly – What is the first instalments.

## vinay said

hi

my take on the TV Problem.

effective rate- 14.75%

FV of 130000 after 6 months- =FV(0.1475;0.5;0;-130000;0)- 139258

Instalment- =PMT(0.1475/12;6;-139258;0;1)- 23924

ans- 23924

## SAURABH ARORA said

q-7 loan = 150000-20000=130000

effective rate p.a = (1+(0.14/4))^4-1= 14.7523%

delay in repayment for 6 months therefore interest for 6 months has to be added to the loan amount 130000*1.1475^(1/2)=139259

now pv=139259 nper=6 rate=1.1475^(1/12)-1 (monthly rate shall be calculated this way as the rate is compounded annually)

generally in case of loans the rates are quoted as compounded monthly i.e we divide the rate by 12 simply to arrive at monthly rate.

the ans comes to 24156

## zalakthakker said

HI,

with ref to mahesh and neelam case study pl help me with below question of ppf ac

ppf ac bal ( mahesh ) 425000 , neelam 315000 maturity date 1-4-2017

.Immediate investment of Rs.40000 & 20000 in their respective PPF a/cs of Manish & Neelam and investment increases by 20% p a till maturity and investments are at maximum amount duing the 2 blocks of extensions. What would be the corpus.

## umesh said

Hi Prashant,

Thank you for uploading the cases. I did all the cases downloaded from this website.

I cleared final module with A grade.

steps I followed during preparation.

1. Solved at least 15-20 case studies.

2. Understand each and every answer that I was not able to solve immediately and note down in a word document.

3. Saved all 2 mark questions (theory like CPF, FPSB, ethics etc ) in word document.

4. Understand and concentrate more on TVM questions.

steps I followed while solving exam questions.

1. Solve the questions in order of 2 marks, 3 marks, 4 marks and 5 marks in this order.

2.Read question twice.

3. Understand the question and spend 70 % of time in understanding and 30 % in execution.

4. Do not see the answers till you solve the question.

Finally, the main mantra is be very strong in TVM.

## zalakthakker said

hi,

Unmesh,

can pl share some question that u remember was there in ur paper.i am giving afp in next month

## umesh said

Hi Zalakthakker,

I cleared final module. Whish afp are you giving..?

Umesh Prabhu

## zalakthakker said

Hi unmesh,

Aa u cleared final module so i am asking which case study was asked to you and if u remember any question from your advance paper pl share so that question will help me.

## zalakthakker said

one more thing i want to ask is 2009 and 2010 case studies are more than enough to pass

## Harry said

Dear Zalak,

Have you cleared your final paper. Which case studies you got again after your ist attempt.

Harry

## zalakthakker said

HI,

Dear Prashant sir,

2 ) company plans to give Bonus share of 1 for 2 shares of fair value 10 As on 24 april 2012 post.bonus the outstanding stock of company will be entitled to a dividend of 125 % .Sanjay wants to buy back 10 shares at prevailing price of 800 per share .If he sells his originally bought shares after stock quotes ex-bonus at 600 per share then what is capital gain/loss ?

i solve this qust in following way pl check for d same

origional share – 100*800 = 80000

as co issue bonus 1;2 ( 200) is bonus share .

after bonus issue ruling mkt price is 600 .

1) on share bought – S T C L

600-800 = -200 *100 = -2000 S T C LOSS

2) on bonus share – 600 – (nil) * 200 = 120000 S T C GAIN

sir i am confused in post.bonus the outstanding stock of company will be entitled to a dividend of 125 % .

waht is the mening of this line and how to solve

## R Varadarajan said

Dear Zalkthakkaer, We require the Record date for the Dividend & the Date of Sale of the Original Share. Assuming that the Record Date for Dividend as 25/04/2012( post Bonus date )& date of sale as 25/05/2012 ( since it could take about 15-20 days for receiving the Bonus share in the aacount , the solution is as follows:

Purchase value of 100 shares 100*800 80000

Bonus shares received 1 for 2 (which means 1 Bonus for every 2 shares) will be 50.

Sale value of Original shares 100*600 60000

STCL 20000

But in this case Sec 94(7) Dividend Stripping would apply and the value of Dividend received would be deducted from the STCL

Dividend on Original Shares @125%( 100*12.50) 1250

STCL 18750

There is an element of doubt whether the Dividend on the Bonus shares ( 50 ) also will have to be deducted. But my view is that since the record date is subsequent to the allotment of Bonus shares ( 25/04/2012) the Dividend on original 100 shares alone would be deducted.

I am sure Mr Prashant shaw would clarify this point

R Varadarajan

## zalakthakker said

Dear R Varadarajan,

pl help me with following question

Loan amount Rs.7000000@10.50%for 15 years.The amount is to be paid in installments.15%on 01/04/12,30% on 01/09/12,30%on 01/12/12 & balance on 31/03/13.Construction was completed on 31/03/13.What would be the deduction u/s 24 & 80 C for F.Y.2012-13?

in above problem which date we have to consider for start date .

## zalakthakker said

Hi,

with ref to ravi case study-

construction of Ravi’s house was completed on 1st April 2008. He started paying EMIs after that, the

first EMI was paid on 1st May 2008. Prior to 31st March 2008, Ravi paid only the interest on his loan

which was disbursed in full by the bank on 1st Aug 2006, when the construction started. He wants to

know the interest portion allowable as deduction under section 24 of the Income Tax Act for the AY

2010-11.

i am able solve pre-construction period int from 1 aug 2006 to 31 mar 2008 comes to 17000

( 6lacs *8.5%*1.668493151)

but how to solve for previous yr . and which date we hv to consider. pl explain

## zalakthakker said

Dear R Varadafajan,

with ref to mahesh and neelam case study pl help me with below question of ppf ac

ppf ac bal ( mahesh ) 425000 , neelam 315000 maturity date 1-4-2017

.Immediate investment of Rs.40000 & 20000 in their respective PPF a/cs of Manish & Neelam and investment increases by 20% p a till maturity and investments are at maximum amount duing the 2 blocks of extensions. What would be the corpus.

## Ravikiran said

Hi

My name is Ravi & I am new to this blog. I am giving module 5 AFP exam on 25th Feb. Can I expect that 6 case studies uploaded on FPSB website on 30th Jan would be applicable or do I wait for any new cases to be uploaded?

Thanks for the help.

Thanks

Ravi

## zalakthakker said

HI,

AS per my knowlege 5 case study uploaded on FPSB website would be applicable. 1 case study is omitted sachine dev D

## zalakthakker said

HI,

i solved this sum in this manner pl check.

as immediate invt 40k and 20k in their ac i use FVGA formula to find FV ( till mat) FOR 4 YRS FROM 1-4-13 TO 1-4-2017

Mahesh – 40000*(1.087)^4-(1.2)^4/ (1.087)-1.2) * (1+r)

= 260686

Neelam – same formula _ 130342( bal as on 1-4-17)

Mahesh ( as 2 block of extension ) Nellam

mode – begin n- 10

n- 10 i -8.7

i-8.7

pv-425000+260686 pv – 315000+130342

pmt-100000 ( max amt) pmt- 1 lac

fv -( 3207151) fv- (2653637)

pl check for d same as i am confused in no of yrs and which mode i have to use begin or end pl clarify

## R Varadarajan said

Dear Zalkthakker,

The shorcut may not give accurate result in respect of the first 5 years till maturity( 2012/13 to 2016/17) with opening balance as 425000 and investment (begin) as 40000 for Mahesh with 20% increase yearly till 2016/17 ) You will have to use the Open office or Excel to find the Maturity value at Maturity and then for the next 2 blocks of extension we could use the shortcut or even calculator. According to me the Maturity Value comes to Rs.3973604( Mahesh ) & Rs.3159042 ( Neelam ) Mahesh Neelan

Opg Inv Clg Bal

01/04/12 425000 425000 315000 315000

2012/13 425000 40000 $505,455.00 315000 20000 $364,145.00

2013/14 $505,455.00 48000 $601,605.59 $364,145.00 24000 $421,913.62

2014/15 $601,605.59 57600 $716,556.47 $421,913.62 28800 $489,925.70

2015/16 $716,556.47 69120 $854,030.32 $489,925.70 34560 $570,115.96

2016/17 $854,030.32 82944 $1,018,491.09 $570,115.96 41472 $664,796.11

+10 yrs $1,018,491.09 100000 $3,973,604.20 $664,796.11 100000 $3,159,041.84

## zalakthakker said

Thanks for Reply

Regars

Zalak thakker

## zalakthakker said

HI,

prashant sir, ( with ref to sanjay case study)

petrol Allowance 48000 Amount spent on Petrol for household -2000

Other Allowances 9,06,000

above this two item r taxable or not ?

## zalakthakker said

HI, ( with re to sanjay case study)

1) You require corpus for holiday to withdrraw 75000pm(current price) from age of 45 till your lifetime . On retirement and post retirement withdrawal should be limited to 50000 pm (Current price ).Cost of escalation of holiday expenses is 6 % p.a .The corupus is accumulated throug equity MF by way of quarterly investment immediately .Once courpus is built up,funds for holidays for 5 year block periods would be switched from equity MF to debt MF .Find the amount of quarterly investment ?\

related things – sanjay age 31 , retirement age 62 , Sanjay’s expected life : 80 years

int- Equity & Equity MF schemes/ Index ETFs : 11.00% p.a.

Debt MF schemes- 7.00% p.a.

How to solve this problem pl help .

## Lubna Shabbir said

Hi Everyone,

I completed my 4th paper sometime in August last year. After that I got married,and didn’t get a chance to complete the last one. Finally, I sat with with past examination papers in Jan and attempted for the Exam 5 , last Friday, and I couldn’t clear it….I found the 5 mark questions really tough..they were really twisted and really hard to understand. Following is a brief of a few questions I can recollect:

1. Only about 2 questions ( a little changed and twisted ) came from the FPSB 6 sample questions which were put on the FPSB site…

2. There were one or two question on goals but were a little complicated than the general ones which i practiced in 2010 question papers

3. They were few analytical questions for 2,3 & 4 marks. So I guess I lost on that as well. Eg:Are the Mfs properly diversified b/w small, mid-cap and large funds and the client is invested in debt mf for a few yrs he got a return of 3% once and 4% once, over the years now his return 6% ( CAGR- i guess)- whats the reason for such low returns – improper management by fund manager or because the interest rates are low as the economy is down…and another two options were there.

4. They were 2 -3 ques on insurance… for 3 marks which were analytical as well.

5. There were a lot of questions on dividend – which i didn’t recollect coming across anywhere

I was really disappointed and was looking through the net and came across this blog. I was wondering if you all can help and guide me, as to how i should prepare for the examination.

Waiting for your reply eagerly…

Warm Regards,

Lubna Shabbir

## Prashant Shah said

Dear Lubna,

Have u mastered goal seek function?

Don’t get disappointed and appear as early as possible. And feel free to ask doubts. We all will help u.

Regards,

Prashant.

## zalakthakker said

HI,

( with ref to sanjay case study )

The Aurangabad house rent is 6% of the market value of the house. Maintenance and Property tax would be 15% while Income Tax would be 20%.. The net amount is invested in equity fund on quarterly basis. The rent is revises every 3 years as per the real estate appreciation rate. After 5 such revisions, the amounts are diverted to liquid fund along with the 25% switch from the balance. Will the corpus be sufficient to meet the higher education cost..

pl guys help me with solution

## R Varadarajan said

The loan is disbursed in stages, depending upon he progress of construction which is normal for Bank Loans. In this case the first disbursement is on 01/04/12 with RS.10.50 Lakhs( 15% ) followed by Rs.30.00 Lakhs on 01/09/12 , 30.00 lakhs on 01/12/12 and Rs.17.50 Lakhs on 31/03. EMIs are to be re-calculated after every disbursement, taking into account the repayments made till then, and the balance period of 15 years after the disbursement. In this case the pre-construction period and the Previous year are the same.( 2012-13) Hence he can avail the interest benefit in 5 instalments or in one go. The interest claim under sec 24 would be decided accordingly. But it would be advisable to take the concept of Interest for previous year so as to cover the entire interest payment made during the previous year. According to my calculations, the interest component for 2012/13 is Rs.309704 ( sec 24 ) and instalment component is Rs.88650( sec 80C ). Please recheck. I would like receive Mr Prashant Shah’s views on this.

## Prashant Shah said

Dear Varadarajan,

You are absolutely right.

I have not checked the calculation but conceptually is perfect.

Thanks,

Prashant V Shah.

## zalakthakker said

Dear R Varadarajan,

in question 2ed instalment is 30% on 1-9-2012 ( 7000000*30%) is 2100000 so why u taken 30 lacs i am not able to understand and the interest component for 2012/13 is Rs.309704 ( sec 24 ) and instalment component is Rs.88650( sec 80C ). how this figure came how to cal this pl expline with steps

## R Varadarajan said

Well that was stupid typing mistake. It should have been only 21.00Lakhs and 21.00 lakhs on 01/09/12 & 01/12/12.But the working was on right track. You have to use CMPD function in FC200V calculator to get the EMI. Thereafter use AMRT function to get the Balance, Interest Total & Principal Total at the end of 5 months, 3 months & 4 months. Total up the Interest and Principal to get the figures as stated. Perhaps you could try with Open Office as well

## zalakthakker said

HI,

i am not getting d ans

i have cal emi as

( 1-apr 2012) n- 15*12 i – 10.5 , pv -1050000, pmt – ( 11606)

(1 -sep2012) n- 180-5, i 10.5, pv – 2100000, pmt (23489)

(1-dec2012) n – 175-3 , i -10.5,pv -2100000, pmt (23663)

(1-apr-2012) n- 172-4, i – 10.5,pv -1750000,pmt (19922)

what input i hv to take in AMRT _PM1 – , PM2- , N- SOLVE- TOTAL INT AND TOTAL PRN

and same for other two step what will be d input for pm1 , pm2 , and N

pl expline

## R Varadarajan said

Hi,

The first EMI is 11606.68( 15 Yrs) for 5 months Balance on 01/09 after 5 EMIs= 1037691 (45724 Int & 12310 Principal)

The Loan Balance on 01/09/12 =1037691+2100000 & the EMI would be 35095 for 175 months. After 3 EMIs, the loan balance as at 01/12/12 would be 3114568 ( In 82163.24 & Principal 23123 )………. You have to proceed on these lines till March end to arrive at the total Interest Payment and Principal

## zalakthakker said

Thanks for early reply

## zalakthakker said

Hi, ( with ref to sanjay case )

The Aurangabad house rent is 6% of the market value of the house. Maintenance and Property tax would be 15% while Income Tax would be 20%.. The net amount is invested in equity fund on quarterly basis. The rent is revises every 3 years as per the real estate appreciation rate. After 5 such revisions, the amounts are diverted to liquid fund along with the 25% switch from the balance. Will the corpus be sufficient to meet the higher education cost.

OTHER DETAILS

market value of Aurangabad house Rs. 25 lakh ,

Ajinkya’s higher education when he attains 18 years of age; Rs. 15 lakh would be required (at current prices).(age 1 year)

Equity & Equity MF schemes/ Index ETFs : 11.00% p.a.

2. Balanced MF schemes : 9.00% p.a., Liquid MF schemes- 5.50% p.a

.

Balanced Mutual Fund Scheme Rs.1,80,379.12 (SIP of Rs. 5,000; beginning of every month); the Asset Allocation of the Scheme is equal in equities and debt.

pl help with solution

## KETAN PARMAR said

Dear Prashant Sir,

I had appeared for last exam on 30th jan,2014 and cleared it with B grade.Thank you much for your great support.

## zalakthakker said

Hi KETAN PARMAR,

congratulation!

can u pl share what type of question was there in your paper and if u remember pl post that.and which case study was there pl share ur expereience .

## zalakthakker said

in comment no 53 u had post one question of (gurpreet das) if u know d sol pl help me with that aslo

trip abroad goal that he redeem 20% amount 4 years before trip another 40% 2 years before the trip and 100 % when trip strat. he redeem and invested in risk free invesment.so what amount he should set aside in equity portfolio to achieve his goal.

## kanti mepani said

hello guys;I have cleared my final examination the day before tomorrow….my thanks to all of u for helping me directly or indirectly….n special thanks to Prashant sir and JUST bear….

## kanti mepani said

i mean yesterday

## Prashant Shah said

Dear Kanti,

Congratulations!!!!

Regards,

Prashant.

## zalakthakker said

Dear kanti.

can pl share which type of question was there in ur paper .

## Ravi said

Hi Prashant & other bloggers

I am happy to inform you that I cleared Advanced module yesterday. Thanks for the insightful comments in the blog & the old case studies.

I got case A(Ashwin Agarwal) & Case B(Gurpreet Das) in the exam. Though I solved all old cases during my preparation, was pretty confident during the exam & also completed the paper in 3 hrs, I was surprised to see Grade C as the result. This tells me that there were some twists which I guess I missed. I cleared all other 4 papers in the first attempt so this paper was certainly a reality check for me. Anyways am relieved that I go through in the first attempt.

The Q’s in the exam were modeled along the Q’s in old Q papers so I suggest that anyone attempting Advanced module should thoroughly solve old papers before attempting the exam.

Thanks again to all of you.

Regards

Ravi

## Prashant Shah said

Congratulations!!!!

## Varadarajan Raghunathan said

Congratulation Ravi. R Varadarajan

## Lubna Shabbir said

@ Ravi – Congratulations on the successful completion of your exam…

Can you please give some more tips for preparation for the examination?

Are 2009 & 2010 papers sufficient for both theory and practical questions?

## R Varadarajan said

Congratulations. Please could you share the type of questions you received which will be of great help to others

## vinay said

1) Mr S aged 30 years is saving for the last 11 years in a Savings account giving a 3.5% p a. He is in the habit of increasing the amount by a fixed sum of Rs.2000 every year. If he deposits Rs.25000 in 12th Year what will be the corpus he will accumulate at the age of 60, if the rate of inflation is 11.68%

Answers a ) 2980330 ( b ) 3251251 ( c ) 2523252 ( d )3322531

Correct answer ( a ) 2980330

MY take –

## vinay said

1 3000

2 5000 First enter all the values in the spreadsheet.

3 7000 calculated NPV of all the amounts invested- =NPV(0.035;B1:B41) = 727301.17.

4 9000

5 11000

6 13000 corpus accumulated- =FV(0.035;41;0;-727301.17;1) = 2980359.33

7 15000

8 17000 (you need not type all the amounts, just put the cell + 2000 and drag.)

9 19000

10 21000 Is this method right and answer correct? any other method(short cut) to solve this?

11 23000

12 25000 31 age

13 27000 32

14 29000 33

15 31000 34

16 33000 35

17 35000 36

18 37000 37

19 39000 38

20 41000 39

21 43000 40

22 45000 41

23 47000 42

24 49000 43

25 51000 44

26 53000 45

27 55000 46

28 57000 47

29 59000 48

30 61000 49

31 63000 50

32 65000 51

33 67000 52

34 69000 53

35 71000 54

36 73000 55

37 75000 56

38 77000 57

39 79000 58

40 81000 59

41 83000 60

## R Varadarajan said

This is a perfect solution. But there is shortcut as listed below which was listed in this block some time ago.

1. First Deposit ( A ) = is Rs.3000, Periodical Increase ( D ) -Rs.2000, No of deposits(n ) = 41 & Int Rate=3.5%

2. First Find FV of Re 1 PMT for 41 years @3.5% which is termed Sn = 88.5095

3. With this the FV for the current problem is given by the formula

FV = A x Sn + D(Sn-N)/I ( A – First Deposit, Sn= FV for Pmt of Re 1 for n yrs @ I%, n = Period,I – ROI

=3000* 88.5095+ 2000*(88.5095-41)/0.035

= 265528.50 +2714828.57 = 2980357.07

Trust this helps

## zalakthakker said

Dear R Varadarajan

with ref to mahesh case study how to solve this question pl help

Find the Annual SIP through Equity MF for the Holiday corpus for Annual vacation of Rs.75000 from 45 till retirement and at a reduced amount of Rs.50000 till his lifetime. The funds reqd for a block of 5 years is transferred to Liquid Funds in the previous year

case study information

Create a separate fund to provide every year post-retirement till his lifetime, annual holiday expenses, cost-escalated, amounting to Rs. 75,000 in current terms, such expenses increasing at the rate of 7% p.a..

current age -45, retirement age-60 and life expetancy 80

this question posted by u in comment no 15

## Varadarajan Raghunathan said

Dear Zalakthakker, Unfortuntely, I could not solve this problem till date. I tried through spread sheet. I wonder whether Mr Prashant Shah can enlighten us on the solution. This problem seems to be getting repeated often and it would of great help to all if some one can provide a solution.

R Varadarajan

## vinay said

I will try to solve and please check it.

Vacation cost increases by 7%. Liquid fund return- 5.5%, equity fund return- 11%

Current age of Mahesh-45, Retirement age- 60, Life expectancy-80.

Money required for the block of 5 years is to be put into liquid fund in the previous year. we dont have to invest money in equity fund for the first block of 5 years(46-50) and should invest immediately in the liquid fund.

So money to be deposited today in liquid fund- =PV(((1.055/1.07)-1);5;75000;0;1)= 385816.20

1)Cost of vacation at the age of 50- =75000*(1.07)^5= 105191.37

Amount to be deposited at the age 50 in liquid fund(for the block51-55)- =PV(((1.055/1.07)-1);5;105191.37;0;1) = 541127.13

Amount of sip in equity mf to be invested today to get 541127.13 at the end of 5 years =PMT(0.11;5;0;541127.13;1)=78278.33

2) Cost of vacation at the age of 55- =75000*(1.07)^10= 147536.35

Amount to be deposited at the age 55 in liquid fund(for the block56-60)- =PV(((1.055/1.07)-1);5;147536.35;0;1)= 758958.86

Amount of sip in equity mf to be invested today to get 758958.86 at the end of 10 years=PMT(0.11;10;0;758958.86;1) = 40889.03

3) Cost of vacation at the age of 60- =50000*(1.07)^15= 137951.57

Amount to be deposited at the age 60 in liquid fund(for the block61-65)- =PV(((1.055/1.07)-1);5;137951.57;0;1)= 709652.68

Amount of sip in equity mf to be invested today to get 709652.68 at the end of 15 years- =PMT(0.11;15;0;709652.68;1)=18582.18

4) Cost of vacation at the age of 65- =50000*(1.07)^20= 193484.22

Amount to be deposited at the age 65 in liquid fund(for the block 66-70)-=PV(((1.055/1.07)-1);5;193484.22;0;1)=995324.63

Amount of sip in equity mf to be invested today to get 995324.63 at the end of 20 years- =PMT(0.11;20;0;995324.63;1) =13966.50

5)Cost of vacation at the age of 70- =50000*(1.07)^25= 271371.63

Amount to be deposited at the age 70 in liquid fund(for the block 71-75)- =PV(((1.055/1.07)-1);5;271371.63;0;1)=1395994.29

Amount of sip in equity mf to be invested today to get 1395994.29 at the end of 25 years- =PMT(0.11;25;0;1395994.29;1) =10992.19

6) Cost of vacation at the age of 75- =50000*(1.07)^30= 380612.75

Amount to be deposited at the age 75 in liquid fund(for the block 76-80)- =PV(((1.055/1.07)-1);5;380612.75;0;1)=1957954.21

Amount of sip in equity mf to be invested today to get 1957954.21 at the end of 30 years- =PMT(0.11;30;0;1957954.21;1) =8863

So, the amount of annual sip for the holiday corpus is – 78278.33+40889.03+18582.18+13966.5+10992.19+8863= 171571.23

## R Varadarajan said

Dear Vinay,

This is absolutely fantastic and the solution is perfect.The idea of splitting the SIP for each block of 5 Years is the main point which in turn simplifies the problem. Congratualtions on your suggested working.

## vinay said

Thank you sir, thanks for checking and confirming the solution.

## zalakthakker said

HI,

how to find out net worth with respect to sanjay case study is there any formula for that.

## zalakthakker said

hi,

How to calculate XIRR through excel i tried several times but not getting

## zalakthakker said

eg-

2-May-2004 -300,000 12.58 23,847.377

18-Aug-2004 28,616.85 12.95

20-Nov-2005 28,616.85 13.05

15-Apr-2007 28,616.85 13.99

16-Jun-2008 28,616.85 14.68

2-Apr-2010 397,774.24 16.68

Rate of Return 11.48

in excel XIRR we have only one colume for value and dates so where to put other values pl explaine.

## R Varadarajan said

Dear Zulakthakker,

You should enter the date as they appear in the First Column. (just enter like’2May2004,18August2004……….. ) and do not try to fill in the date as would like to see. Thereafter, enter the amount in the Second Column.

There after you apply the formula XIRR and there for the values you select the column ” amount” and for dates, you select the “dates column. The answer would be 11.48758, or 11.48%

1st Column 2nd Column

2-May-04 -300000

18-Aug-04 28616.85

20-Nov-05 28616.85

15-Apr-07 28616.85

16-Jun-08 28616.85

02-Apr-10 397774.24

XIRR 0.114758629

## zalakthakker said

Thanks R Varadarajan ,

i try and got d ans. but in open office same way we have to do ?

## R Varadarajan said

Yes please. The same command works in Open office as well with similar operations

## ia.singh said

I would like to thanks Mr. Prashant for this blog, I cleared final exam in beginning of Feb’2014 with A grade in first attempt, even in all other modules I scored (3 Bs, 1 C) and I haven’t even expected that I will score A grade.

Thanks once again..

## Prashant Shah said

Congratulations!!!

## Lubna Shabbir said

@ Ia Singh – Congratulations on the successful completion of your exam…

Can you please give some more tips for preparation for the examination?

Are 2009 & 2010 papers sufficient for both theory and practical questions?

## ia.singh said

Thanks Lubna, for theory & practical I would recommend you to go through all the modules at least once it will help you in understanding your strength & weakness. Secondly understanding of concept of TVM is very important for succeeding in the Final Exam. Thirdly I didn’t rushed to submit the paper instead after finishing the exam I crosschecked my answers & submitted my paper just 5 minutes before the scheduled time (4 Hrs).

What I did was I revised all the modules and then attempted the papers of previous years in test like conditions and then I used to check my scores, it helped me a lot in exam.

Best of luck for your exam….

## Lubna Shabbir said

Thanks for the suggestions!!

## zalakthakker said

hi,

with ref to mahesh case study.

Money back insurance plan of 20 year term with sum assured of Rs. 5 Lakh

annual premium, due end of March every year, is Rs. 23,750. Paid 16 premiums till date without interruption.

The policy provides 25% of basic sum assured to insured as survival benefit after 5th, 10th, 15th years from the

start of the policy.

if question is ask for calculate IRR

paid 16 premiums till date without interruption. what is d meaning of this line . we r not paying d premium after 16

1 – 23750 – (any term ins premium as given exam)

2-,,

3-

4-

5-

6- ( survival benefit )

7-

8-

9-

10-

11-(survival bnf )

12-

13-

14-

15-

16-( survival bft )

17-

18-

19-

20

21-( maturity amount + survival benefit ) cal IRR

my doubt in this question IS that

from 17 to 20 we have to put 0 or premiun amount .

same sum like sameer soopari case

,,

## R Varadarajan said

Dear Zalakthakker,

You have to include the premiums for years 17-20 as well to get the IRR if the person is getting the Maturity Payment Claim. But if there is a death claim immediately, then the MV will be added in the current year (17th year) as no further premiums need to be paid

## Lubna Shabbir said

Hi everyone,

As mentioned earlier, I didn’t get through the last paper even after 2 attempts… my second attempt was after 7 months time.. and because of the gap due to my wedding I think I don’t have much thoroughness with the individual modules as well.. I am greatly disheartened and confused how to go about. Can someone please advice.. how do I go about for the preparation of the exam..

Awaiting for replies eagerly …

Thanks

## Suma said

Lubha,

Soon after clearing initial modules I got a job as financial planner and life was not easy to prepare for the exam. My first attempt was close to one year after clearing initial modules. The only saving grace was that I was handling real time financial planning problems at work. So when I gave my first attempt in Jan this year I was prepared to fail miserably ( mainly due to lack of time for good preparation) When I failed due to lack of 1 mark I was angry. Then when re-attempted in Jan again – I got way too tough questions ( or concepts from Insurance, though in planning my expertise is taxation). So I sat with the insurance desk at my office and learnt all the concepts. This time around I had no inkling to pass … I was neck deep at work. .. the only thing I did was solve one paper a day from previous case studies in train while commuting to work. And yesterday though I finished the paper in less than 3 hours I wasn’t way too confident. I was not even hoping or praying… I was just asking for some strength to hold myself if I fail. When I cleared everybody in test centre saw it in my face.

Ok few extras that I did

I carried chocolates into exam hall as hunger pangs can distract u r attention.

I requested for corner most seat so that no one disturbs me ( as it is 4 hour exam ppl r understanding)

I requested for rough sheets beforehand.

I attempted the 2 marks and 3 marks in both cases first. Then moved to 4 and 5.

So don’t give up. Good that u failed, u r concepts will be stronger. Don’t measure success only with a certificate. My boss dint when he hired me. Today I am happy that I made financial planning as a career change. You will too.

## Lubna Shabbir said

Thanks a lot for taking out time and helping and motivating me. I will surely do as you said.. Will try solving all the papers and try to be positive…..

Thanks a ton… for all your kindness and motivation.

## zalakthakker said

Hi, ( sanjay case )

PPF Account: Rs. 1,77,440; the account was opened on 8th July, 2007 and Sanjay has been investing Rs. 30,000 at every year end.

what will be the bal as on 31-3-2013. if invt done in july hoe to cal int for d year ?

## R Varadarajan said

Bal as at 31/03/2012 was Rs.177440 and he deposits Rs.30000 every year at the end of the year. Hence this FY also he will deposit RS.30000 on 31/03/2013 and this will not earn any interest. The Balance in the account would be =(177440*1.088) +30000 =223054.72 ( PPF rate of interest for 2012/13 was 8.8% and has since been reduced to 8.7% w e f 01/04/2013)

## Suma said

Hi All,

Cleared CFP final today feeling so relieved. Got Ashwin and Sahanbuthi Case. This is third attempt in 2014, first two times missed by 2/3 marks. Today I was least prepared. Infact I was sick of giving the same exam again and again. The only thing that saved me today was the fact that every time I missed it in previous attempt, i reworked on my failures. This link which was prev uploaded by someone in this site helped a lot http://www.ljbs.in/docs/Exam5_CaseStudy_2009.pdf.

Will try to re-create the paper as much as possible.

## Prashant Shah said

Congratulations!!!

Please try to recollect the questions. It will help a lot.

Regards,

Prashant V Shah

## Amita said

hi I am not able to open this link as error popup page not find

will you please help as I am appearing for final module next week.

## Amita said

hi I am not able to open this link http://www.ljbs.in/docs/Exam5_CaseStudy_2009.pdf as error popup page not find

will you please help as I am appearing for final module next week.

## Prashant Shah said

Dear Amita,

Load it from the following link

https://prashantvshah.wordpress.com/category/cfp/advance-fp/case-study/

Regards,

Prashant.

## Amita Shinde said

Hello Prashant,

Thank you for the link. I was able to open it now but i already had all the materials in this link with me.

I just wanted to confirm if the materials in the link ” http://www.ljbs.in/docs/Exam5_CaseStudy_2009.pdf ” are same as the above 5 case studies.

Regards

Amita

## Prashant Shah said

Yes. It’s same.

## Amita Shinde said

Thank you Sir for you reply.

## Amita Shinde said

hello sir

Can you please suggest any books for numerical specially for tax & insurance as i am appearing for final module soon.

## Prashant Shah said

Dear Amita,

There are no published books which take care of the questions which are usually there in our exams. Hence don’t spend any money to buy books of these subjects of any of the education provider. We have so many questions published for same, practice those.

Regards.

## zalakthakker said

hI suma congratulation !

if u remember any new question or any tips pl share i have my exam day after tommorow ( 13 )

## zalakthakker said

I did all case from oct 09 to apr 2010 and sp 3 anything else to do ?

## Suma said

Of the two cases I got let me sum it up

Ashwin and Sumedha

1. Ashwin would like to sell their home and after settling the loan and taxes would like to take use 20 lakhs from sale proceeds for the new house downpayment. New house will cost them 65 lacs as of today. They plan to buy house next year. Loan will be for 20 year term@10% p.a. What will be the emi.

First find out if sale proceeds from current value 35 lacs is enough to give them 20 lacs post taxes and loan settlement ( it is ). Then multiply 65lacs with 1.055 ( inflation) . From this figure minus 20 lacs ( available from sale proceeds post taxes and loan). Find out the emi.

2. Sumedha has finished investing in debt mf scheme 3 years ago. She invested in a sips in debt mf for 12 months @ 12000 p.m. After that the amount was left in the same scheme. What was the intrinsic return made by her.

3. Ashwin has child plan for prateek where there is a deferment for 12years and the vesting period end one year after Prateek attaining majority age. For 3 years post after vesting date an amount not more than 20% of SA can be withdrawn. As per u what is the analysis of this policy.

4. Ashwin bought shares of an unlisted company for 1.5 lacs in year 2000. Today he would like to transfer the shares to his friend for 6 lacs. What is his tax liability for this transaction.

5. Insurance requirement problem with tricks about the amount of household expenses.

6. Charges if ulip is returned within 15days

Sahanbuti

1. Insurance basic concepts questions for 2 and 3 marks

2. Retirement Corpus requirement with additional requirement to donate 10 lacs then at age of 70,80 and 85 for the poor. Investment in retirement age to remain in debt scheme. 10 lacs from savings to be moved to savings into existing debt scheme. further SIP into equity scheme for 15 years and later the amount to invested in debt scheme till retirement.

3. Similar to above question with slight variation. Would like 1 crore at age of 70 and one to bequeath to daughter.

4. this paper had 2 problems using dividend stripping logic for sec 94.

5. sahanbuti is worried about the amount invested in demat. You calculate that beta of demat portfolio is 1.25. You suggest to take protection by

a) going long in nifty for 17.5 lacs, b) going long for approx 27.5 lacs, c) going short for 17.5 lacs d) going short on nifty for 27.5 lacs.

concentrate on problems involving switches in accumulation phases, taxation, ULIPS,

other questions related to code of ethics, professionalism,integrity

## vinay said

Congratulations Suma, thanks a lot for posting the questions.

## Lubna Shabbir said

Congrats Suma !! And thanks for sharing the questions.

## zalakthakker said

Dear suma/ R varadrajan

hi, pl confirm with ashwin case q no 4

For long term capital gains of a unlisted or a private limited , the tax rate is applicable will be 20% + 10% surcharge.

600000-150000 = 450000*20% =90000*10%=9000

so 90k +9k= ( 99000)

## zalakthakker said

hi suma ,

pl explaine me question no 3 i am not able to understend what is deffered date ( in insurance )

## zalakthakker said

HI,

ashwin case question 2 conf with ans

STEP 1 n-12, i -7,pmt – 12000, fv ( 149403 )

STEP 2 N -3 , I (?) , PV -149403 , FV 173000 ( EXISTING DEBT MF GIVEN IN CASE )

## Suma said

Q 3)Based on Child plans deferred endowment policy.. For example check http://www.myinsuranceclub.com/life-insurance/companies/lic-of-india/cda-vesting-21

Q4) LTCG – first find the indexed cost as shares belong to unlisted company. 150000*939/406 = 346921 approx. Minus this from 6 lacs. Result – 253079 is LTCG. Tax = 253079*20% =50615. To this add cess 3% Ans is approx 52134

## zalakthakker said

Hi,

pl confirm with question no 2 ashwin for above sol – for intrinsic value 173000 ( EXISTING DEBT MF GIVEN IN CASE )

## zalakthakker said

Thanks suma.

## Tanu said

Hi ..I m new to your blog … I attempted for exam 5 In April last year but could not clear it … Its been an year … And i just got too busy with work n a lot of things happening in my life that i did not appear for exam after that …. Now after an year i plan to sit for my final exam … Plz guide n help me as to how i should proceed …. I have lost touch … And i m aware i need to brush up all my concepts … But can u plz let me know how n what shall i do for a start … Tax ?? Retirement ?? Or shall straight away start with previous year case studies

## Lubna Shabbir said

Hi tanu, even I have been trying to prepare for the exam…do you want do some combined preparation?

## reena said

solve all 2009, 2010 and fpsb site numerical atleast u will get an overview ,one question for sure they ask of credit card check this link

Click to access mitc.pdf

## zalakthakker said

Hi guys could not clear advance paper in 1 st attempt paper was to tought except one or two question all question was new to me no single question from sp 1 ,2 and 3 . i had prepared well but fail i got gurpreet and sanjay case .

## Harry said

Hi Zalak,

When are you planning to give your 2nd attempt for this paper.

Harry

## zalakthakker said

sanjay case

1) sanjay take a personal loan of 2 lac on credit card @ 14.5 % for 2 year . int is charge on reducing bal monthly . what would be the annual effective rate charge to him ?

A) 17.28

B) 16.04

C) 13.79

D)15.25

2) what would be the income tax liability for AY 14-15 if auragabad house remain vacant for 13-14 sanjay paying 15000 for muncipal tax and income from fd – 7625 and income from saving ac – 6792.

3) auragabad house remain vacant for 13-14 ,sanjay is paying 1500 for muncipal tax , fair mkt value – 4.20 lac , muncipal value is – 3.60 las what would be annual value

A) 283500

B)241500

C) nil

d) loss of 15000 k

this 3 question was from sanjay case option r same as i post no change in figure

## jyotik14 said

Hi Zalakthakker,

Can anybody knows the answers for the above questions. I have solved the answers as per my understanding, But still unsure about the same.

1. B-16:04

3. D- loss of 15000k

## jyotik14 said

Hi all,

can anybody suggest the answer please

## Harry said

Answer for third question is “Annual value of augabad home is taken as Nil”

Justification of answer: Annual Value of one house away from work place

Before going into the final stage of calculation of income from house property, let us consider two more situations. A person may own a house property, in Bangalore, which he normally uses for his residence. He is transferred to Chennai, where he does not own any house property and stays in a rental accommodation. In such a case, the house property in Bangalore cannot be used for self-occupation and notional income, therefore, would normally have been chargeable although he derives no benefit from the property. To save the tax payer from hardship in such situations, it has been specifically provided that the annual value of such a property would be taken to be nil subject to the following conditions:

The assessee must be the owner of only one house property.

He is not able to occupy the house property because of his employment, business etc., away from the place where the property is situated.

The property should not have been actually let or any benefit is derived therefrom.

He has to reside at the place of employment in a building not belonging to him.

Hope this helps all

Harry

## zalakthakker said

Gurpreet das case

1) for goal of geet merriage at 25 yrs he is investing Rs – 7000 PM and contrbution is incresing by 20% every after 2 year . for risk perspective he allocate 40% in equity , 40 % in BAL MF and other 20% in DEBT .what would be d corpous .

A) 27.51

B) 23.11

c)22.75

d)19.10

2 ) trip abroad goal that he redeem 20% amount 4 years before trip another 40% 2 years before the trip and 100 % when trip strat. he redeem and invested in risk free invesment.so what amount he should set aside in equity portfolio to achieve his goal.

A) 6.5

b)6.2

C)5.6

D)6.25

plzzzzzzz help me with sol option r same as that i post

## vinay said

Hi

I got the answer as B)23.11 for q.no-1. It is same as asset allocation problems. We have to calculate for each two years separately.

Calculation for EQUITY segment-

For 1st batch of two years- 2800 p.m.

corpus after 2 years- set- begin, n=24, i=10.482/12, pmt- -2800, solve fv= 75053.27

corpus after 4 years- set- begin, n=24, i=10.482/12, pv- -75053.27, pmt- -3360, solve fv= 182537.95

so on calculate upto 11 year period for equity, mf and debt.

I request the experts here to confirm.

## zalakthakker said

pl anyone cnfm with above sol.

## zalakthakker said

HI vinay,

For above qst i am getting 22.75 pl anyone else try and confirm

## zalakthakker said

dear all,

can anyone know d sol for qt no 2 gurpreet case as this is d question which frequently asked for gurpreet case.

## zalakthakker said

hi Lubna Shabbir ,

have u book ur date for advance paper ?

## Lubna Shabbir said

Hi,

I am sorry to hear about your exam.. I was really disappointed when I couldn’t clear after 2 attempts and can understand what your feeling…For me i had lost touch of the basic modules and practiced the 2010 sample papers and SP-3, but nothing turned out from that either… ( i had tons of dividend questions which I didn’t have the slights idea about) but all the time I have spent wondering and disheartened I can say its a lot worth to try spending time trying to clear the exam rather than feeling disappointed… I just gathered myself up…so trying to figure out how to go about…so haven’t booked for the exam as yet. But would like to attempt and clear as soon as possible. Well having company to study will certainly help me get some motivation. Have you planned as to when you are going to re-attempt for the exam?

## zalakthakker said

hi,

wii give after april now .

## zalakthakker said

as of now there is no seat available till 14 th april for mumbai so if u r planning first book ur seat .

## Lubna Shabbir said

Hmm.. I really am not sure how to go about and if I am ready… So will wait and then decide a date

## Lubna Shabbir said

I wanted your advice on how to prepare.. I am not so strong with the basics as its been a while since i cleared my first 4 papers…

there is been a gap of seven months. But if I try to go through all the concepts now it will take quite a while. Do you think going through the past examination papers that is Jul 2009 to Apr 10 will be sufficient for both problems and theory?

## krishna kiriti said

Can anybody please explain the 1st problem in Vijay Kumar(24th jan 2009) case study. I have the solution with me but i am not able to understand why pmt was calcuated and is there is any other method for solving this problem other than the given solution. I have my exam on the 18th of March. Quick reply is really appreciated. Thanks in advance.

## jyotik14 said

As per the question Vijay would like to provide his family an amount of Rs. 6 lakh p.a. and the proceeds of such a cover would

be invested in long term debt and long term equity in the ratio 90:10. hence (we consider) for life cover of Rs.1000 (equity – 100 & debt – 900) how much he need to invest per year in equity and debt. so we calculate PMT for that and then cross multiplication

## jyotik14 said

Best Luck for your exam.

## R Varadarajan said

The question is to find a insurance policy, proceeds of which if invested in long Term Debt & Long Term Equity At the ratio of 90:10 would give a inflation adjusted annuity of Rs.6.00 Lakhs p a till his wife lives.Vijay’s wife Kayati is 29 years and her life expectancy is 80 years. So she requires inflation linked annuity of Rs.6.00 Lakhs for ( 80-29) 21 Years. The corpus required for such annuity would be the insurance required by Vijay.To find out the corpus we have to assume a tentative investment of RS 100 or Rs.1000 , invest in the same pattern as suggested arrive at the annuity. From that we can interpolate the corpus for the annuity of RS.6.00 Lakhs.

Let us asssume the Corpus as Rs.1000 – out of which Rs.900 would be invested in LT Debt & Rs.100 would be in LT Equity as per the question ( 90:10)

Debt Equity

Return 9.00% 15.00%

Inflation 4.00% 4.00%

RRR* 4.8077% 10.5769%

Investment 900 100

Annuity for 29 years 45.43 9.62

Total Annuituy = 45.43+ 9.62 =55.05

For annuity of Rs.55.05 Corpus is 1000

For annuity of Rs.600000 Corpus 10899344.

This method would be used extensively to arrive at the investment throughout this module

* RRR – Refers to Inflation Adjusted Real Rate of Return

Trust this clears your doubts.

## krishna kiriti said

Hey thanks a lot for the quick reply. I have understood the concept now… 🙂

## jyotik14 said

Hi All,

I am also new to this blog but just want to appreciate that this site is very very important for us. Thanks a lot for your help!

## zalakthakker said

Hi krishna kiriti,

update ur status . how was the paper

## zalakthakker said

Mr. A has recently purchased a tablet of Rs. 23,000 on 1st January 2012 by using his credit card. His credit card gives cash back of 5 % on electronic purchases. He keeps on paying minimum amount due on his credit card liability. He wants to know his liability at the end of Jan 2013 if he makes no additional purchases on his credit card and credit card company charges 36% p.a (interest is charged after 30 days)

ablet purchased on 1st January 2012 23000 Rs.

Cash back received 5%

Credit card liability 21,850.00 Rs. 23000*(1-5%)

Minimum amount due 5% of the balance

Interest rate charged on credit card 36% p.a

Monthly effective rate 2.60%

Month Credit Card liability at the beginning of the month Minimum amount paid Credit Card liability at the end of the month

Jan 21,850.00 1,092.50 20,757.50

Feb 21,296.26 1,064.81 20,231.44

Mar 20,756.55 1,037.83 19,718.72

Apr 20,230.52 1,011.53 19,218.99

May 19,717.82 985.89 18,731.93

Jun 19,218.11 960.91 18,257.20

Jul 18,731.07 936.55 17,794.51

Aug 18,256.37 912.82 17,343.55

Sep 17,793.70 889.68 16,904.01

Oct 17,342.75 867.14 16,475.62

Nov 16,903.24 845.16 16,058.08

Dec 16,474.86 823.74 15,651.12

Jan 16,057.34 802.87 15,254.47

Mr. A has recently purchased a TV of Rs. 53,000 on 1st January 2012 by using his credit card. His credit card gives cash back of 5 % on electronic purchases. He converts the liable amount into 12 EMI’s at 0 % p.a with a processing fee of 10% . He wants to know his liability at the end of Jan 2013 if he pays only the minimum amount due and makes no additional purchases on his credit card and credit card company charges 36% p.a (interest is charged after 30 days)

Tablet purchased on 1st January 2012 53000 Rs.

Cash back received 5%

Credit card liability 55,385.00 Rs. 53000*(1-5%)*1.1

Minimum amount due 5% of the balance

Interest rate charged on credit card 36% p.a

Monthly effective rate 2.60% p.m

EMI to be paid p.m 4,615

Month Credit Card liability at the beginning of the month Minimum amount paid Credit Card liability at the end of the month

Month Credit Card liability at the beginning of the month Minimum amount paid Credit Card liability at the end of the month

Jan 4,615 230.77 4,384.65

Feb 9,113.87 455.69 8,658.17

Mar 13,498.31 674.92 12,823.39

Apr 17,771.64 888.58 16,883.06

May 21,936.67 1,096.83 20,839.84

Jun 25,996.15 1,299.81 24,696.34

Jul 29,952.75 1,497.64 28,455.11

Aug 33,809.08 1,690.45 32,118.62

Sep 37,567.67 1,878.38 35,689.29

Oct 41,231.01 2,061.55 39,169.46

Nov 44,801.52 2,240.08 42,561.44

Dec 48,281.53 2,414.08 45,867.46

Jan 51,673.36 2,583.67 49,089.69

## zalakthakker said

Above two question is for practice fpr credit card question

## zalakthakker said

3 more qut for practice

1 )Loan disbursed net of upfront processing fees

Mr. X was sanctioned a car loan of Rs 9.85 lakh after deduction of a 1.5% upfront processing fees on 1st June 2011. The loan was at 12% p.a. on 48 EMIs, the first EMI was paid on 1st July 2011. Preclosure charges was 5% of the outstanding amount of loan. Mr. X has regularly discharged all EMIs. He wants to repay the loan outstanding on 15th July 2013. He asks you the amount he would have to settle towards this.

Amount of loan 985,000

Actual loan (including processing fees) 1,000,000

EMI 26,334

outstanding Loan on 1st July 2013 538,680

Prepayment penalty 26,934

Interest differential upto 15th July, 2013 2,657

Amt to be paid alongwith penalty 568,271

2)To find the required rate of a fixed income (FD) product from real return angle:

A 500-day FD scheme of a bank paying quarterly interest.

Inflation rate expected during the 500-day period of FD 6.5% p.a.

Minimum Real Rate of Return targeted 2.5% p.a.

Effective rate of return to be generated by FD 9.16% p.a.

Effective quarterly rate 2.22% per quarter

Nominal rate of FD to be targeted 8.86% p.a.

3)Viability of post-tax real rate of return from FDs

Rate of interest 10% p.a. compounded quarterly

Inflation 6% p.a.

Tax Slab 30% (Actually 30.9%)

Rate of interest (contractual) 10.00% p.a.

Annual Effective rate of interest 10.38% p.a.

Rate of inflation 6.00% p.a.

Tax including Education Cess 30.90%

Net of Tax return from fixed deposit 7.17% p.a. 10.38%*(1-30.9%)

Real Rate of Return from fixed deposit 1.11% p.a. 1.0717/1.06-1

## Lubna Shabbir said

I read in one of the posts that there is basic calculations of AFP on this blog…Can someone please guide me where it is?

Thanks

## zalakthakker said

file:///E:/How%20to%20solve%20Advance%20Financial%20Planning%20Problems-1%20%C2%AB.htm

## Lubna Shabbir said

It says web page not found….

## vinay said

here is the link- https://prashantvshah.wordpress.com/2011/05/03/how-to-solve-advance-financial-planning-problems-1/

copy and paste it in the browser.

## Lubna Shabbir said

Thanks Vinay, got the page now….

## zalakthakker said

2. Sumedha has finished investing in debt mf scheme 3 years ago. She invested in a sips in debt mf for 12 months @ 12000 p.m. After that the amount was left in the same scheme. What was the intrinsic return made by her.

pl help me with sol

## vinay said

Dear Zalakthakker

It would have been easier if all the data have been presented, anyways i got the debt mf return from the case studies and it is 7%.

so whether she continues sip or stops and leave it in the scheme, she is getting the return of 7% only.

## zalakthakker said

Dear vinay/, R varadrajan,

pl help with foll qust

1) sanjay take a personal loan of 2 lac on credit card @ 14.5 % for 2 year . int is charge on reducing bal monthly . what would be the annual effective rate charge to him ?

A) 17.28

B) 16.04

C) 13.79

D)15.25

i am getting ans 15.5 pl cnfm

## vinay said

15.5 seems right, or may be something amiss in the question.

## Harsh Kamdar said

Dear Sir,

This is in reference with Advance Financial Planning Module.

Request you to help me out as to how should I go with this module. I wish to appear for the same in coming weeks time. I have heard that many things have been changed. I would be doing sample papers and case studies as mentioned in FPSB website. But I don’t have the questions/ answers of the case studies mentioned in the site. Thus request guide me and also provide me with any of your notes for my reference.

Thanking you for your valuable time and consideration.

Regards,

Harsh Kamdar

## Lubna Shabbir said

Hi Harsh…

You can find the past examination papers in the archives along with the working notes. Also if you wish you can provide me with your email Id and I send you the 2009 and 2010 papers along with the solutions.

Warm Regards

## Prashant Shah said

Dear Harsh,

I will get back soon.

Regards,

Prashant.

## Velangini Raju said

I passed all four modules of CFP and going to attempt Advance module on 15th April’14. Plz suggest me topics related to assessment year 2014-15 in advanced module (changes in AY 2014-15 in relation AY 2013-14.

## Rasleen Kaur said

Sir,

I have all four modules and started to prepare for the advance financial planning module.

kindly suggest me how to proceed with the preparations and what all topics needs to be covered.

As i wasgoing through the cfp sample papers provided on the fpsb website ,the solutions to the case studies were not available.

Please guide me for the module.

Thanks in advance

Rasleen kaur

## Rasleen Kaur said

Sir,

I have cleared all four modules and started to prepare for the advance financial planning module.

kindly suggest me how to proceed with the preparations and what all topics needs to be covered.

As i wasgoing through the cfp sample papers provided on the fpsb website ,the solutions to the case studies were not available.

Please guide me for the module.

Thanks in advance

Rasleen kaur

## Prashant Shah said

Dear Rasleen,

All the question papers along with solutions are available on this site.

Regards,

Prashant Shah.

## zalakthakker said

one of my friend gv afp and he pass yesterday list of qust is as follow

Sahanubhuti

1. Find how much should we invest to achieve daughter boarding school in risk free rate?

2. How much life insurance required that covered daughter boarding school, higher education, marriage expenses, & also covered 75% of pre-retirement monthly expenses?

3. How much amount invest in equity & balance to achieve world tour in 10 years?

4. Retirement Corpus requirement with additional requirement to donate 10 lacs then at age of 70,80 and 85 for the poor. Investment in retirement age to remain in debt scheme. 10 lacs from savings to be moved to savings into existing debt scheme. further SIP into equity scheme for 15 years and later the amount to invested in debt scheme till retirement. (DITTO)

Mahesh & Neelam

1. What is the maturity amount of PPF if mahesh invest 40K & neelam 20K & invest extended for 2 terms of 5 year block & invest till the date of Mahesh retirement (PPF return 8.7% )?

2. Municipal Value – xxxx , Standered rent – yyyy, Find the income from house property of Mahesh (Ans all option in loss IFHP)

3. FMP for 376 days & FD both Instruments have 9% return. Find out how much % fmp has more return than fd in 1 year?

4. How much life insurance required & also achieve goal like medical education, post graduation of sapna marriage expenses & also covered 70% monthly exp. Till neelam life expectancy?

5. Find intrinsic value as per constant dividend growth model? (like page no. 230 Q 8)

6. What is the maturity amt. of money back insurance plan if Mahesh survive full term?

7.prabhat case q. no. 18 (like which option choose if expect that market downside?) (Ans Buy put option)

## zalakthakker said

Hi,

in shanubhuti case qut no 4 – i have solve 1 st 3 step

pv of 10 lac at 60

n- 10 , i -7 , pv – ( 508349 ) fv 10 lac

n – 20, i -7 , pv ( 258419 ) fv – 10 lac

n- 25 , i -7 , pv ( 184249 ) fv – 10 lacs

so courpus require is – 951017 . but what stategy to be use for 10 lacs from savings to be moved to savings into existing debt scheme

in last we hv to find out sip for 15 yrs

pl help me with further sol

## Lubna Shabbir said

You have questions on probable case studies?

## vinay said

Dear Zalakthakker

thanks for posting the questions.

Reply to post 124-

My take on Q.no.-1. Sahanubhuti should send her daughter to boarding school immediately. So first instalment is to be paid now and have to invest for the rest of the payments ie for 5 years.

Inevstment rate- 6.5%, Cost escalation = 10% Real rate = -3.181%

set- end, n = 5, I%= -3.181 pmt= 180000, pv= ?- Ans= 992691.90.

Seniors- please confirm the answer.

## Swati said

Hi Prashant

It will be great help if you can or ask some one to calculate and provide following details for all 6 Case studies available in FPSB site for Advance Module (i.e case A-F)

1) Taxable Income for all 6 in respective AY as per reference date.

2) Networth For All as on reference date Given on case studies.

3) Networth at end of 1st Year, 2nd year, 3rd Year, 4th Year & 5th year from Reference Date (Considering the return asumption given without any additional info)

4) Net Asset & Gross asset as on Refe date

5) Net Asset & Gross asset atend of 1st Year, 2nd year, 3rd Year, 4th Year & 5th year from Reference Date

6) Liquidity ratio for all 6 Case studies.

7) Any thing if you think generic and can be derived without any additional information.

## R Varadarajan said

Dear Ms Swati,

You will appreciate it would be unfair to ask some one to work out the answers for the cases. Ideally, you should get the idea from one such case and you should should work out the corresponding figures for all the other cases based on the concept. Practice makes one perfect and more.

## Swati said

Ok, thanks though I have calculated but wanted to match my findings anyway thanks

## Sangeetha Ravada said

Swati Please refer to this link http://www.ljbs.in/docs/Exam5_CaseStudy_2009.pdf. Most questions have repeated. Besides there are enough solutions to the questions. Concentrate on tax and tvm concepts. You should do fine. I have cleared just AFP just with the help found on this link which was posted by someone on this website longago

## Swati said

Thanks Sangeetha, however my need is over now. I already cleared the exam last week. anyway thanks

## vinay said

Hi Swati

Hearty congratulations on clearing the final exam. How was it? Please share your thoughts.

## Swati said

Exam was easy and went fine, but not very satisfied on its content as they say it’s highly difficult exam but experienced the only difficulties is perfect placing of numbers but not the concepts as the numbers are big in size some time you tend to miss one/two digit which put you in to a situation again to re calculate the whole. Due to time constraint you can’t review where u missed the number it’s better to re- cal the whole thing.

Another difficulty they made is it create some time frustration by solving huge number amount what you can’t even earn but to pass exam you need to involve yourself in such big amounts

The biggest problem of these exams is the education provider who made it a hype to earn money without providing right content based on prescribed syllabus. (Though I went through self-Study Mode, google was my EP)

Questions are repeated time and again in terms of structure & concept

Finally my advise to people is don’t look for question and answers what came in exam for others coz you are not sure the question who putting some where remember correctly along with all information. Trying solving those half informed or incomplete question you may end up some where diluting your own concept.

Try collect at least one question for each structure & concept from given different sample papers by FPSB and manipulate it with different big/big numbers to practice you are through.

## Prashant Shah said

I agree with u. Hardly any EP has the books which are as per the syllabus.

I am also not fond of posting important questions. I want to educate students but what is required by students are important questions.

Regards,

Prashant.

## Swati said

Good news is me & two of my friend understanding the pain given by different EP to students decided to start a help portal at free of cost by providing right content & right practice questions as per prescribed syllabus.

The portal will be go online by June mid which is under development now “www.easyfinexam.in”

## Prashant Shah said

Great news.

All the best..

## Sangeetha Ravada said

Hi Swati,

That is good job. Do let me know if I can be of any purpose. in your endeavour.

## Swati said

Sure Sangeetha, and thanks for extending helping hand which will further benefit new CFP aspirants. I will inform once our site is live so that can get in touch as in this site we have to respect Prashant’s policy not to publish any personal email or contact.

Thanks

## zalakthakker said

hi,

pl help me with following qst which very imp

MAGESH CASE

1) what is insurance required by mahesh till neelam life expectancy. neelam contribute 10 k toward household exp assume invt made in debt instrument ( memory base )

A- 102

B-75

C-78

2) mahesh is selling gold unit @ 2500 on recognised stock exchange cal post tax return.( same question with same option)

A)15.58

b) 13.27

C)14.46

D)11.90

3) mahesh want to pay off her loan after 3 yrs and this will arranged by rent recevied invested quterly at end @ 6.5( memory base )

a) loan liability covered by 94%

b)loan libility coverd by 112%

4)what is the first step in scope of engagement

## zalakthakker said

SANJAY CASE

1)sanjay has enough ins cover provided by employer as per u what is ur analysis

a) he should take disability and critical illness rider cover

b) he should take disability and critical illness cover and family floter policy for family

2) company plans to give Bonus share of 1 for 2 shares of fair value 10 As on 24 april 2012.Post bonus the outstanding stock of company will be entitled to a dividend of 125 % .Sanjay wants to buy back 10 shares at prevailing price of 800 per share .If he sells his originally bought shares after stock quotes ex-bonus at 600 per share then what is capital gain/loss ?

confuse between 2 option

a) 18750

b) 18125

above sol is provided bu r varadrajan but this 2 option was there so confuse which one is correct

3 ) cal networth of sanjay after 5 yrs if auragabad house given on rent for rs 1 lac and invt at d end of year @ 8%. fd invt @ 9% epf are incresing @ 10% ignore cash bal and car

4) penalty of belated return as per sec 234 a

a) PENALTY OF 1% Per month from assement year

b) ,, ,, ,, ,, ,, ,, due date

ans – b) from due date

5)sanjay want to insure his house so on what value he will insure

a) muncipal value of local autority

b) stamp duty value of house

c)market value of house that is priviling in near by area

6)what is life ins reqire till wife life expectancy by sanjay if he reqire 90% of exp post retirement and rs 200 pm toward medical exp

## vinay said

Q6- Current expenses of house hold = 10000+15000+2000 = 27000. Annual- 324000. Inflation- 5.5%. Risk free rate- 6.5%.

Real rate- 0.9478%.

PV of expenses upto retirement = set=begin, n=62-31, i= 0.9478, pmt= 324000, pv=? 8749809.75

Expenses at the time of retirement- 324000*(1.055)^31=1703614

Expenses post retirement- 90% of 1703614 + 200pm = 1535652

PV (at retirement)of expenses upto wife’s life expectancy- set= begin, n= 80-59, i= 0.9478, pmt= 1535652, pv=? 29393534

PV(now) of 29393534- n=31, i=6.5, fv-29393534, pv=? 4172669

Insurance required= ( 8749809+4172669) -5000000(already have term insurance) = 7922748

Prashant sir, please check this. Is the answer right? Is this the correct way of doing it?

## Sangeetha Ravada said

In actual exam this question is further modified to cover all expenses of child education and marriage till the child’s marriage ( as Sahanbhuti’s case). Try incorporating those angles

## amit kumar jain said

hi

i am thinking to apply for cfp challenge status program since i hv completed licenciate in insurance institute of india.i hv 15 yr experience on financial advisory services.i want a suggestion from you. how to proceed further.i am totally off with studies now.how can i clear the fifth paper.by online training or self study.i think i need training.what do you suggest.

Amit kumar jain

## EASYFINEXAM said

PSB India’s CFP and AFP Certification Examination get Accreditation Certification status of

NISM Link:- http://nism.ac.in/index.php/nism-accredited-certifications-for-investment-adviser

FPSB Link:-http://fpsb.co.in/Upload/Notifications/Notification%20-%20Accredited%20Certification%20Status%20CFP%20AFP.pdf

## pulkit shah said

Recently i have given the AFP for 2 times but in both the times i am not able to clear the exam in second time i got 45 marks and so now i am very much upset for the exam

so anyone can guide me what to do as i have to clear the exam anyhow and if anyone has given recently and can upload the question then upload the questions

## gaurav said

4. Retirement Corpus requirement with additional requirement to donate 10 lacs then at age of 70,80 and 85 for the poor. Investment in retirement age to remain in debt scheme. 10 lacs from savings to be moved to savings into existing debt scheme. further SIP into equity scheme for 15 years and later the amount to invested in debt scheme till retirement. (DITTO)

this is from sahanubhuti case study….

## vinay said

Hi Gaurav

question is ambiguous.what we have to find? whether to use the existing equity mutual fund assets?

Here are some calculations which may help.

Expenses after retirement at 60= 60000*(1.055)^(60-34)= 241387

Corpus required to meet the above expenses for 25 years- set=begin, n= 12*25,i%=6.784/12, pmt=241387, pv=solve- 35026063

10lac each required to donate at age 70, 80, 85. Pv of these donations at age 60- NPV- 951017.

10 lac moved from savings to existing debt scheme, value at age 60- (1000000+598000)*(1.07)^26=9280149

Total amount required at age 60- 35026063+951017-9280149= 26696931

Now if existing equity fund assets and SIP considered, it more than satisfies the requirement. So what is the question here?

## vinay said

EDIT- in corpus required we have to take the real rate of interest- (1.07/1.055)-1=1.421, apr- 1.411

Corpus required to meet the above expenses for 25 years- set=begin, n= 12*25,i%=1.411/12, pmt=241387, pv=solve- 61063727

Total amount required at age 60- 61063727+951017-9280149= 52734595

Equity sip for 15 years, so pv of corpus required at age 49- n=11 i%=7, fv= 52734595, pv=solve- 25053826

sip required= set-begin, n=15*12, i%=10.481/12, pv=-3245000, fv= 25053826, pmt=solve- 21802

Additional sip required= 21802-15000= 6802-ANS

## gaurav said

please help me for this ques…

## vinay said

EDIT- In corpus required we have to take the real rate of interest- (1.07/1.055)-1=1.421, apr- 1.411

Corpus required to meet the above expenses for 25 years- set=begin, n= 12*25,i%=1.411/12, pmt=241387, pv=solve- 61063727

Total amount required at age 60- 61063727+951017-9280149= 52734595

Equity sip for 15 years, so pv of corpus required at age 49- n=11 i%=7, fv= 52734595, pv=solve- 25053826

sip required= set-begin, n=15*12, i%=10.481/12, pv=-3245000, fv= 25053826, pmt=solve- 21802

Additional sip required= 21802-15000= 6802-ANS

## Rohit Gupta said

Hiii please any one suggest me how to clear AFP module exam I attempt 2 times but failed to clear everytime i faced different and tough questions although i cleared all first module in first attempt plz help m feeling hopeless…….

## SAURABH ARORA said

I passed the AFP module with B grade. Thank you so much prashant sir. 🙂 🙂

## Prashant Shah said

Many Congratulations…..

## Prashant Shah said

Request u to share some questions which were there in exam.

Regards.

## Harry said

Prashant Sir, I am planning to give the final module in next week.

Which case studies are normally coming more in the exam.

## Sangeetha Ravada said

Harry,

If you still haven’t given the exam….. Sahanubhuti Vanaspati and Gurpreet Das have repeated, Some of my friends got these cases and so did I. However I cleared the exam while ago. It is good to practice all five as though cases are same questions are different. As for me I practiced all five cases in terms of questions asked in this link http://www.ljbs.in/docs/Exam5_CaseStudy_2009.pdf. Hope it helps

## R Varadarajan said

Dear Saurabh,

Congratulations on clearing the Final Module. Please indicate the case studies and the questions to the extent your remember for the benefit of others.

With best wishes,

R Varadarajan

## zalakthakker said

HI,

2) company plans to give Bonus share of 1 for 2 shares of fair value 10 As on 24 april 2012.Post bonus the outstanding stock of company will be entitled to a dividend of 125 % .Sanjay wants to buy back 10 shares at prevailing price of 800 per share .If he sells his originally bought shares after stock quotes ex-bonus at 600 per share then what is capital gain/loss ?

confuse between 2 option

a) 18750

b) 18125

Pl conf me with right option i am confused in two

## Prashant Shah said

I am confused with sanjay wants to buy back 10 shares.. Pls clarify.

## Harry said

Answer for this question is 18750, can anybody confirm is this the right answer

## zalakthakker said

sanjay wants to buyback 100 shares.

## zalakthakker said

5)sanjay want to insure his house so on what value he will insure

a) muncipal value of local autority

b) stamp duty value of house

c)market value of house that is priviling in near by area

pl help me with ans

## zalakthakker said

2) mahesh is selling gold unit @ 2500 on recognised stock exchange cal post tax return.( same question with same option)

A)15.58

b) 13.27

C)14.46

D)11.90

mahesh case

## SAURABH ARORA said

Sales consideration (300*2500) 750000

Less: Indexed cost of acquisition (533547)

(300*983*939/519)

CAPITAL GAIN 216453

Tax @20.6% 44590

Sale proceeds (net of tax) (750000-44590) 705410

use XIRR function

17/10/06 -294900

01/04/13 705410

Ans- C 14.45%

## Harry said

Hi Saurabh,

Thanks for sharing the solution, could you please let us know the case studies which came to you.

Harry

## SAURABH ARORA said

The case studies I had got were Mahesh & Neelam and Ashwin. I thoroughly enjoyed taking the examination! 🙂

## Harry said

Hi Saurabh,

Thanks for the reply.

Do you remember the questions which you got it in your examination

Harry

## zalakthakker said

Hi harry

ref comment no 150 for sanjay case bcoz its 2 times came to me but difficult to clear.

## Harry said

Hi Zalak,

Which point you are referring to , which comment no. 150

Harry

## zalakthakker said

Hi harry,

2) what would be the income tax liability for AY 14-15 if auragabad house remain vacant for 13-14 sanjay paying 15000 for muncipal tax and income from fd – 7625 and income from saving ac – 6792.

sanjay case frequently ask qut if u know the solpl share

## zalakthakker said

Dear Harry,

1) sanjay take a personal loan of 2 lac on credit card @ 14.5 % for 2 year . int is charge on reducing bal monthly . what would be the annual effective rate charge to him ?

A) 17.28

B) 16.04

C) 13.79

D)15.25

Thisis frequently ask question for sanjay ask 2 times came tome

in comment no 130 i had post same qut

## zalakthakker said

Hi Harry,

have given the exam

## Harry said

Hi Zalak,

I have not given the exam, but one of my friend attempted last week. Case study came was Sanjay and Gurpreet.

But he was unable to pass the exam.

I am looking for a slot but the slot is not available, when are you planning to give the exam again.

Harry

## zalakthakker said

Hi,

i have given 2 times but not able to clear. sanjay case was very difficult

## Harry said

Oh i see, so you got Sanjay case study both the times. How are you preparing now.

Harry

## Prashant Shah said

Sanjay case study has been asked more often.

I have some questions on credit card which may be asked in exam.

Will post those soon.

Prashant.

## vinay said

PRASHANT Sir

I am happy to inform you that i have cleared the final exam with grade A yesterday. Your blog has been of immense help and I am very grateful for all the support i got here. Thank you very much Sir.

Thanks to all the boarders who posted their valuable inputs, special thanks to R varadarajan, Suma, Jasbir singh and Zalakthakker.

## gaurav said

2008 case studies milegi ? if someone hv ..den plz give it to me..

## Prashant Shah said

OK I will upload.

## Pooja Jena said

Sanjay below is the link for 2008 case study

http://www.ljbs.in/docs/Exam_5_CaseStudy_2008.pdf

## Pooja Jena said

congrats. I need a help from you. I am very confused how to prepare for advanced module. Can you guide me please.

## vinay said

Hi Pooja,

thanks,

solving 2009-10 case studies is a must. If possible solve the sample questions from all the modules given in fpsb site.

Time will not be a problem, only problem is to clearly understand what is being asked.

## Saranya said

Mr Vinay Congrats for clearing ur final exam with an A grade. Can you pls post which case studies you got in exam and the model questions asked ? That will be helpful for me as i’m planning to give my exam next month. Thanks in advance.

## Saranya said

Mr Vinay Congrats for clearing ur final exam with an A grade. Can you pls post which case studies you got in exam and the model questions asked ? That will be helpful for me as i’m planning to give my exam next month. Thanks in advance.

## tanutng said

Hi,

I have my final exam on 10 Oct 2014,please guide me.

i have attempted twice before but was unable to clear. I am feeling very much tensed.

## vinay said

Hi Tanutng

solve 2009-10 cases under exam conditions and please read the question twice before attempting answer. This really helped me in understanding what was really asked and how to analyse the data given. Be cool, best of luck.

## tanutng said

Thanks a lot.

Am worried about interpreting language of questions.

I also wanted to confirm PPF & NSC rates for calculations.

N tax slabs will be,upto 2 lac- nil,2 lac -5 lac 10%,5 lac -10 lac- 20%,above 10 lac 30 % for individuals na?

## Prashant Shah said

Ppf and nsc rates are updated. Pls check relevant post. Also thoroughly understand the concept of withdrawal from ppf ac.

Tax slabs are OK.

Regards.

## Prashant Shah said

Here are some of the things which were there in one of my student’s exam

Policy assignment

Net worth with insurance 5 marks

FPSB India is an SRO

PPF withdrawal

Client searching house on rent, you as cfp advisor contact him with broker. What code of ethics?

Assumption of eq and debt proportionate investment

Tax liability

Roger case 8

stress tzest (goal seek)

Derivatives question

All the best.

## huzefa said

Hello Prashant sir,

could you please update the possible questions for the various case studies given by fpsb

Thnx

## Prashant Shah said

Dear hufza.

Finding possible question is tough. Instead u can read comments to find what were there in exam of those who appeared.

## vinay said

Hi Saranya

thank you. I got gurpreet and sahanubhuti cases. In sahanubhuti case one question about retirement corpus- apart from the retirement corpus it was given that sahanubhuti wants to donate 10 lakh at 70years, 80 years and 85 years. one questiion about insurance where all the education , marriage and house expenses had to be covered. Thank God, mostly all the questions were quite clear.

In gurpreet case- one question was about options where i have to calculate the maximum loss possible in worst case, one on mutual funds- given dividend and i have to calculate the return(xirr), calculation of cost of higher education when investments ratio in different asset classes given etc.

I think if you can solve the problem in the cases from 2009 and 2010 in one shot, you can easily clear the exam.

ALL THE BEST.

## Saranya said

Thank u so much Vinay. All the best to u too for ur future endeavours.

## pulkit shah said

Retirement Corpus requirement with additional requirement to donate 10 lacs then at age of 70,80 and 85 for the poor. Investment in retirement age to remain in debt scheme. 10 lacs from savings to be moved to savings into existing debt scheme. further SIP into equity scheme for 15 years and later the amount to invested in debt scheme till retirement. (DITTO)

this is from sahanubhuti case study….

solve this question for me

## Prashant Shah said

I will solve it asap

## Saranya said

Amount Shifted to debt Scheme 1000000,

Balance in Equity Scheme 3245000

Amount required in the 1st month of retirement 241388 , 60000*1.055^26

Corpus to be accumulated to sustain 25 yrs at inflation linked withdrawal in debt scheme 6,10,52,337 PV((1.07/1.055)^(1/12)-1,25*12,-241388,0,1)

At age 60 PV of corpus needed at 70 for donation 508349 (1000000/1.07^10)

At age 60 PV of corpus needed at 70 for donation 258419 (1000000/1.07^20)

At age 60 Pv of corpus needed at 70 for donation 184249 (1000000/1.07^25)

total corpus needed at age 60 62003354 (61052337+508349+258419+184249)

Accumulation of current PV in debt scheme after 26 years 5807353 (91000000*1.07^26)

Accumulation of current Pv of Equity scheme after 26 years 48934161 (3245000*1.11^26)

Balance to be accumulated through SIP is 7261840 (62003354-5807353-48934161)

Let the investment be rs 100 in equity for 15 years and later for 11 years in Debt Scheme

Fresh accumulation in equity after 15 years 43707.20 (Fv((1.11)^(1/12)-1,15*12,-100,0,1)

Accumulated value of Debt after 11 years 91997.18 (43707.2*1.07^11)

Rs 100 invested through SIP is equal to 91997.18

Therefore SIP needed to be made to accumulate 7261840 is 7893.55 ((100*7261840)/91997.18)

## Saranya said

Sorry I Missed Including Existing balance in Debt MF i.e. 598000

hence answer would be like below.

Amount shifted to debt scheme 1000000

Balance in Equity scheme 3245000

Amount required in the 1st month of retirement 241388 60000*1.055^26

Corpus to be accumulated to sustain 25 yrs at

inflation linked withdrawal in debt scheme ₹ 6,10,52,337 PV((1.07/1.055)^(1/12)-1,25*12,-241388,0,1)

At Age 60 PV of corpus needed at 70 for donation 508349 1000000/1.07^10

At Age 60 PV of corpus needed at 80 for donation 258419 1000000/1.07^20

At Age 60 PV of corpus needed at 85 for donation 184249 1000000/1.07^25

Total corpus needed at age 60 ₹ 6,20,03,354 61052336+508349+258419+184249

per month

Rate of Debt scheme 7% 0.005654145

Rate of Equity scheme 11% 0.008734594

Accumulation of current Pv in debt scheme in 26 yrs 9280150 (1598000*1.07^26)

Accumulation of current Pv in Equity scheme in 26 yrs 48934161 (3245000*1.11^26)

Balance to be accumulated through SIP ₹ 37,89,043 (62003354-5807353-48934161)

Let the investment be Rs 100 in equity for 15 yrs

Fresh accumulation in equity scheme in 15 years ₹ 43,707.20 FV((1.11)^(1/12)-1,15*12,-100,0,1)

Fresh accumulation in Debt scheme in next 11 years ₹ 91,997.18 FV((1.07)^(1/12)-1,11*12,-100,-43707.2,1)

Rs 100 invested through SIP is eual to ₹ 91,997.18

SIP needed to accumulate 72,61,840 ₹ 4,118.65 (100*7261840)/91997.18

Answer ₹ 4,118.65

## Prashant Shah said

Dear Saranya,

Great job!

Prashant

## zalakthakker said

Dear vinay ,

can pl help with sol – Gurpreet case

2 ) trip abroad goal that he redeem 20% amount 4 years before trip another 40% 2 years before the trip and 100 % when trip strat. he redeem and invested in risk free invesment.so what amount he should set aside in equity portfolio to achieve his goal.

A) 6.5

b)6.2

C)5.6

D)6.25

## vinay said

Hi Zalakthakker

My take on the problem-

Gurpreet age -43, Trip at – age 53. Trip cost now- 10lac, Trip cost after 10 yrs- 1708144 (inflation 5.5%).

20% of the amount 1708144- 341628, pv before 4 yrs at risk free rate(6.5%)- 265556

40% of the amount 1708144- 683257, pv before 2 yrs at risk free rate(6.5%)- 602400

Balance 40% of the amount 1708144- 683257 when trip starts.

So money needed at the end of 6 yrs – 265556,8 yrs- 602400, 10 yrs- 683257, Calculate NPV(11%)- 644000

Ans – A)- 6.5(approx)

## Harry said

Hi Vinay,

First of all accept the heartiest congratulations on clearing the final AFP Exam with Grade A.

It would be helpful for all users here, if you can help us with the questions which came in your exam

Thanks in advance

Harry

## zalakthakker said

Hi vinay,

can u pl post some question was there in exam.

## zalakthakker said

HI,

Dear vinay/prashant sir

pl help with foll qust ( credit card qut )

A) 17.28

B) 16.04

C) 13.79

D)15.25

## Prashant Shah said

I don’t have fin calculator now but the solution seems like

14.5/12 = ans. Now convert to annual effective rate.

Pls let me know whether this is OK or not.

Regards.

## zalakthakker said

ans is coming correct pl check

## pulkit shah said

Kindly please solve me the following questions as i have exam in 2 days

1.company plans to give Bonus share of 1 for 2 shares of fair value 10 As on 24 april 2012.Post bonus the outstanding stock of company will be entitled to a dividend of 125 % .Sanjay wants to buy back 10 shares at prevailing price of 800 per share .If he sells his originally bought shares after stock quotes ex-bonus at 600 per share then what is capital gain/loss ?

2.You require corpus for holiday to withdrraw 75000pm(current price) from age of 45 till your lifetime . On retirement and post retirement withdrawal should be limited to 50000 pm (Current price ).Cost of escalation of holiday expenses is 6 % p.a .The corupus is accumulated throug equity MF by way of quarterly investment immediately .Once courpus is built up,funds for holidays for 5 year block periods would be switched from equity MF to debt MF .Find the amount of quarterly investment ?

3what would be the income tax liability for AY 14-15 if auragabad house remain vacant for 13-14 sanjay paying 15000 for muncipal tax and income from fd – 7625 and income from saving ac – 6792.

4) auragabad house remain vacant for 13-14 ,sanjay is paying 1500 for muncipal tax , fair mkt value – 4.20 lac , muncipal value is – 3.60 las what would be annual value

A) 283500

B)241500

C) nil

d) loss of 15000 k

5) The Aurangabad house rent is 6% of the market value of the house. Maintenance and Property tax would be 15% while Income Tax would be 20%.. The net amount is invested in equity fund on quarterly basis. The rent is revises every 3 years as per the real estate appreciation rate. After 5 such revisions, the amounts are diverted to liquid fund along with the 25% switch from the balance. Will the corpus be sufficient to meet the higher education cost.

6)mahesh and neelam case study pl help me with below question of ppf ac

ppf ac bal ( mahesh ) 425000 , neelam 315000 maturity date 1-4-2017

.Immediate investment of Rs.40000 & 20000 in their respective PPF a/cs of Manish & Neelam and investment increases by 20% p a till maturity and investments are at maximum amount duing the 2 blocks of extensions. What would be the corpus.

7)mahesh case study.

Money back insurance plan of 20 year term with sum assured of Rs. 5 Lakh

annual premium, due end of March every year, is Rs. 23,750. Paid 16 premiums till date without interruption.

The policy provides 25% of basic sum assured to insured as survival benefit after 5th, 10th, 15th years from the

start of the policy.

if question is ask for calculate IRR

8)what is insurance required by mahesh till neelam life expectancy. neelam contribute 10 k toward household exp assume invt made in debt instrument ( memory base )

A- 102

B-75

C-78

D- 108

9))sanjay want to insure his house so on what value he will insure

a) muncipal value of local autority

b) stamp duty value of house

c)market value of house that is priviling in near by area

10) to find out the tax liability in the case of mahesh under 80D 6880 and also loss on house property it is given 45000

so we have to find the tax liability in that case

11) Neelam’s own expenditure in the household is Rs.15000 and would like to look for a insurance to cover expenses Varun becomes self supporting – ie after his 28 years. Though appeared easy I couldn’t get the answer.

thanks

can anyone who has cleared the final exam solve me the following questions it will be helpful for me in order to clear the exam

## Saranya said

The dates of acquiring, sale and Bonus are not clear hence trying to solve with this example

If Mr sanjay bought 10 shares of XYZ company cum- bonus ( before bonus) at Rs 800

And after he bought Bonus was announced as 1 share for existing 2 shares each. After bonus a 125% dividend is declared. And finally Mr sanjay sold

1) the shares he bought at the beginning ie 10 shares 600

2) Total share holdings of XYZ company at Rs 600

Particulars No of shares Cost

Originally Bought shares 10 800

Bonus 1:2 5 0

Divident 125% (10 Facevalue * 125%) *15 shares

Sale

1)

if he sold only 10 shares

Sale consideration 6000 (600*10)

Cost of acquisition 8000 (800*10)

Loss 2000 (8000-6000)

Dividend Stripping 125 (10*10*1.25)

Net Loss 1875 (2000-125)

Note Div Stripping 10 shares * Face value of share 10* 125% dividend

2nd scenario

If he sold total 15 shares he held

Bonus shares ( 5 shares)

Sale consideration 3000 (5*600)

cost of acquisition 0

Profit 3000 (3000-0)

sale of initially acquired 10 shares

Sale consideration 6000 (600*10)

Cost of acquisition 8000 (800*10)

Loss 2000 (8000-6000)

Dividend Stripping 125 (10*10*1.25)

Net Loss 1875 (2000-125)

But this Net loss of 1875 can be set off against profit made from sale of 5 bonus shares

Profit on sale of 5 Bonus shares 3000

Net Loss on sale of initially acquired 10 shares 1875

Net Profit 1125

Please Note

If all these transactions took place with in 12 months its treated as short term,

There can be a scenario where initially aquired shares come under long term and bonus shares come into short term bracket

if the total shares ( acquired and Bonus) are sold after 12 months and provided the transaction took place through a stock exchange then

there wont be any tax payable (LTCG on shares are not taxable)

## zalakthakker said

Hi Punit,

have u given the exam update ur status.

## tanutng said

Hey All,

Finally i have cleared AFP exam. Thanks To All.This blog has been immensely helpful for preparation. Thanks a lot.

5 marks & 4 markers were out of my mind was too tough for me.

4 mark theory questn was on reverse mortgage features it was easy,other theory questions were not so easy not so tough.Have to read very properly and calmly.

most of 5 marks were on loans and mortgages,interest dedctn u/s 24 and standard dedctn.

One was to calculate PRE EMI value was for 3 marks but i cudnt get exact answer. I will upload the questions as i remembr.

## Prashant Shah said

Congratulations!!!!

## zalakthakker said

HI tanutng,

can pl post some qut which was there in exam

## vinay said

Prashant sir

i am into financial services field(a sub broker) and want to start practice as CFP too. Is there any way to get practical training say for few days like what software they use, how do they do it practically. Are there any financial firms which exclusively deal with financial planning where i can train myself for few days?

Please guide.

## Prashant Shah said

Dear Vinay

Pls let me know the place you belong to..

Regards.

## vinay said

Sir

i am from Sirsi, a small town in Karnataka.

## pulkit shah said

Kindly please solve me the following questions as i have exam in 2 days

1.company plans to give Bonus share of 1 for 2 shares of fair value 10 As on 24 april 2012.Post bonus the outstanding stock of company will be entitled to a dividend of 125 % .Sanjay wants to buy back 10 shares at prevailing price of 800 per share .If he sells his originally bought shares after stock quotes ex-bonus at 600 per share then what is capital gain/loss ?

2.You require corpus for holiday to withdrraw 75000pm(current price) from age of 45 till your lifetime . On retirement and post retirement withdrawal should be limited to 50000 pm (Current price ).Cost of escalation of holiday expenses is 6 % p.a .The corupus is accumulated throug equity MF by way of quarterly investment immediately .Once courpus is built up,funds for holidays for 5 year block periods would be switched from equity MF to debt MF .Find the amount of quarterly investment ?

3what would be the income tax liability for AY 14-15 if auragabad house remain vacant for 13-14 sanjay paying 15000 for muncipal tax and income from fd – 7625 and income from saving ac – 6792.

4) auragabad house remain vacant for 13-14 ,sanjay is paying 1500 for muncipal tax , fair mkt value – 4.20 lac , muncipal value is – 3.60 las what would be annual value.Immediate investment of Rs.40000 & 20000 in their respective PPF a/cs of Manish & Neelam and investment increases by 20% p a till maturity and investments are at maximum amount duing the 2 blocks of extensions. What would be the corpus.

A) 283500

B)241500

C) nil

d) loss of 15000 k

5) The Aurangabad house rent is 6% of the market value of the house. Maintenance and Property tax would be 15% while Income Tax would be 20%.. The net amount is invested in equity fund on quarterly basis. The rent is revises every 3 years as per the real estate appreciation rate. After 5 such revisions, the amounts are diverted to liquid fund along with the 25% switch from the balance. Will the corpus be sufficient to meet the higher education cost.

6)mahesh and neelam case study pl help me with below question of ppf ac

ppf ac bal ( mahesh ) 425000 , neelam 315000 maturity date 1-4-2017

7)mahesh case study.

Money back insurance plan of 20 year term with sum assured of Rs. 5 Lakh

annual premium, due end of March every year, is Rs. 23,750. Paid 16 premiums till date without interruption.

The policy provides 25% of basic sum assured to insured as survival benefit after 5th, 10th, 15th years from the

start of the policy.

if question is ask for calculate IRR

8)what is insurance required by mahesh till neelam life expectancy. neelam contribute 10 k toward household exp assume invt made in debt instrument ( memory base )

A- 102

B-75

C-78

D- 108

9))sanjay want to insure his house so on what value he will insure

a) muncipal value of local autority

b) stamp duty value of house

c)market value of house that is priviling in near by area

10) to find out the tax liability in the case of mahesh under 80D 6880 and also loss on house property it is given 45000

so we have to find the tax liability in that case

11) Neelam’s own expenditure in the household is Rs.15000 and would like to look for a insurance to cover expenses Varun becomes self supporting – ie after his 28 years. Though appeared easy I couldn’t get the answer.

thanks

can anyone who has cleared the final exam solve me the following questions it will be helpful for me in order to clear the exam

## Prashant Shah said

Dear Vinay,

Mumbai is the best place to find such training.

Regards,

Prashant.

## vinay said

Sir

thanks for the suggestion.

are there any firms you prefer? shall i request – “will you provide training”? I am ready to bear the expenses.

If so, please let me know.

## zalakthakker said

HI,

PL HELP ME WITH ANS

) mahesh want to pay off her loan after 3 yrs and this will arranged by rent recevied invested quterly at end @ 6.5

a) loan liability covered by 94%

b)loan libility coverd by 112%

## N.Shriram said

I am an MBA(Finance) and M.Com,I have enrolled for CFP course,may I know if it is necessary to enroll in a coaching centre for Challenge Status exam or can we prepare thru self study? And also kindly advise if I can directly prepare for Final exam or should I have to first study all the modules individually?

## Prashant Shah said

Dear N.Shriram,

Regret for late reply.

If your objective is to get through the exam, there is no need to take hardcore coaching and u can just learn the tricks. But if u want to learn financial planning u need a quality coaching class. Once again insist on quality coaching class.

Regards,

Prashant.

## N.Shriram said

Awaiting your kind reply..

## vinay said

Hi Shriram

For challenge status it might be better to enroll for coaching. Studying all the modules and solving the sample papers of all the modules will be helpful in understanding the concepts clearly.

## Harry said

Hi Vinay/Prashant ji,

There are few questions from Case 1- Ashwin Case study. the questions came to my friend exam. Can any body help with the answers for the same. These are 4/5 marks questions.

Q1. Ashwin wants to know that additional life cover required today in case he is no more…He has informed you that annual growth in his income expects 9% P.A for 1st 10 years and post 7% pa till retirement. His self expenses 25% of household expenses and taxes payable Rs. 1,00,000. Post death Sumedha will invest corpus in 40% balanced fund & 60% in Debt instruments.

Q2. You have suggested Mr. Ashwin to start a monthly investment on an immediate basis for Prateek and Aslia’s higher education till age 22 of Aslia as below in an Equity and Debt fund. He wants to know monthly SIP required in Equity & Debt fund?

New investment and portfolio rebalanced as per below asset allocation on specific intervals.

90:10 (E:D) for 1st four years

70:30 (E:D) for next four years

50:50 (E:D) for next four years.

30:70 (E:D) till prateek’s age of 18

100% debt fund post age of 18 of Pratik.

Note: You have further advised to increase monthly SIP every year by 7%, in line with his expected income growth.

Q3. Calculate immediate annual investment required till one year before the retirement to build the retirement corpus for Mr. Ashwin. (Post retirement corpus will be investing 40% to debt fund, 30% in a balanced fund, 20% Gold ETF and 10% diversified equity fund) (Ignore taxation and expenses)

He will increase his annual investment 8% P.A. as per his income growth.

You have suggested below asset allocation for investment

1st 10 years 80% Equity and 20% Gold ETF

2nd 10 years 60% Equity and 40% Gold ETF

Balance years in 40% equity and 60% Gold ETF

Harry

## Shriram.N said

Thanks a lot for your kind suggestion Vinay…

## Harry said

Hi Vinay/Prashant ji,

There are few questions from Case 1- Ashwin Case study. the questions came to my friend exam. Can any body help with the answers for the same. These are 4/5 marks questions.

Q1. Ashwin wants to know that additional life cover required today in case he is no more…He has informed you that annual growth in his income expects 9% P.A for 1st 10 years and post 7% pa till retirement. His self expenses 25% of household expenses and taxes payable Rs. 1,00,000. Post death Sumedha will invest corpus in 40% balanced fund & 60% in Debt instruments.

Q2. You have suggested Mr. Ashwin to start a monthly investment on an immediate basis for Prateek and Aslia’s higher education till age 22 of Aslia as below in an Equity and Debt fund. He wants to know monthly SIP required in Equity & Debt fund?

New investment and portfolio rebalanced as per below asset allocation on specific intervals.

90:10 (E:D) for 1st four years

70:30 (E:D) for next four years

50:50 (E:D) for next four years.

30:70 (E:D) till prateek’s age of 18

100% debt fund post age of 18 of Pratik.

Note: You have further advised to increase monthly SIP every year by 7%, in line with his expected income growth.

Q3. Calculate immediate annual investment required till one year before the retirement to build the retirement corpus for Mr. Ashwin. (Post retirement corpus will be investing 40% to debt fund, 30% in a balanced fund, 20% Gold ETF and 10% diversified equity fund) (Ignore taxation and expenses)

He will increase his annual investment 8% P.A. as per his income growth.

You have suggested below asset allocation for investment

1st 10 years 80% Equity and 20% Gold ETF

2nd 10 years 60% Equity and 40% Gold ETF

Balance years in 40% equity and 60% Gold ETF

Harry

## Harry said

Can anybody help with the answer for the above questions.

Harry

## vinay said

Hi harry

i tried question no-2 and got the answer as – 6365- starting SIP amount. As the sip amount goes up every year i could not find any short cuts in calculation and hence have to calculate it for each year.

First i calculated the amount required for both-

at the end of year

prateek aslia total

14 634827.44 634827.44

15 446495.3 446495.3

16 471052.54 471052.54

17 496960.43 745440.64 1242401.07

18 524293.25 524293.25 1048586.51

19 553129.38 553129.38

20 583551.5 583551.5

21 615646.83 615646.83

Next i assumed and started with sip amount 5000 and went on calculating for each year as per given ratio and rebalancing. Also considered withdrawals from end of the year 14. I entered the formula in such a way that – i could change initial sip amount column so that all the calculations change accordingly. I cannot attach anything here otherwise i would have attached the spreadsheet.

Finally i started adjusting theinitial sip amount and got the answer as – 6365. But it is a tedious process and may not be suitble for exam purposes. I have done all the calculations in one shot and there might be some errors. Please check the answer and confirm.

## Rishabh Misra said

Hello prashant sir,

Just wanted to check what would be the PPF RATES to be taken if nothing specified in the exam planning to give the exam soon

## Prashant Shah said

Dear Rushabh

Ppf rate for exam is 8.7%. For rest of the rates u may check post of smaller savings scheme.

Regards.

## rishabhmisra said

Sir I was reading the blog the same conveys that ppf rate has to be changed with respect to that year applicable rate. I.e if the ppf account is opened in 2009 then that rates would br taken for that year and then with changing fy you need to change rate and current year it is 8.7. Hope it is not that way as we cant rember each year rates.

## Prashant Shah said

In that case u will have take respective years’ rate. Not to worry they will be provided in exams except the current.

Regards

## rishabhmisra said

Thank you sir.

While was going Vijay kumar in Q 8 they have taken the annual expenses while calculations for inflation as we as consumptions. While if I take the inflated number of monthly expenses I.e 21000 to 25 years then I get different answer. Why we have to take annual expenses in some sum and montly in others for calculating retirement corpus

## Ritika said

Dear Prashant Sir,

today only I cleared advance module..I have set of 31 important questions including all fpsb case studies i.e. Ashwin, Gurpreet, …all…I have hard copy how do I upload all questions for other students. I got 3-4 questions same in the exam.

## Prashant Shah said

Congratulations.

U can post them as a comment.

Regards

Prashant.

## Harry said

Dear Prashant Sir,

Ritika can email you the scanned copy of hard copy of questions with solutions and then you can share the same as document upload on this website, i think this solution can be worked out for everyone benefit here.

Please suggest solution for uploading the same by Ritika

Regards

Harry

## Prashant Shah said

Dear Harry,

I will contact Ritika to get those question.

Regards,

## Ritika said

I have 21 with solutions..

## R Varadarajan said

Dear Ritika,

Congratulations on clearing the AFP module. It is also commendable that you could develop some questions on the case studies & the solutions for the same. Please could you post them on this blog so that all the prospective students can benefit.

With best wishes. Please keep up your association with the members in the blog for the benefit of all !!

R Varadarajan

## zalakthakker said

Dear Ritika,

congratulation on clearing the exam . can u pl post question which was there in exam.

## venkat said

HI,Prashanth sir, yesterday i cleared AFP module and got A grade,i want to prepare for interview,plz let me know the what are the areas on which i hav to improve,and what type of skills have to learn?

## Prashant Shah said

Congratulations for the outstanding performance.

I will get back for the interview part.

Regards.

## harsha said

hi venkat can you give me u r suggestions and important questions in advanced financial planning

## Swana said

Can anybody solve the below question

Interest rate is 9.10% on FD for the period of 15months.Calculate Effective rate for the said period?

## Prashant Shah said

FD rates are nominal and are compounded quarterly.

Hence find annual effective are to get the answer.

Regards,

## Swapna said

I need Effective rate for 15 months not 12 months,if FD’s are compounded quaterly.

Please solve above problem and revert to me.

## Prashant Shah said

Dear swapna,

Effective rate is indicated per annum.

However the calculation can be like,

say 9% is the nominal rate and 15 months mean 5 compounding.

(1.0225^5)-1.

U may check the options to get the correct answer.

## Harry said

Prashant Sir,

Did you get questions with solutions from Ritika

Hary

## R Varadarajan said

Please could you post the questions and solutions in the blog for the benefit of all. Thanks

## Prashant Shah said

Hi,

I have got questions from Ritika. All the questions are in image form taken with mobile camera. I have given the same to my IT staff to get it done in word form.

Regards,

Prashant.

## R Varadarajan said

Dear Prashant,

This has reference to the Sanjay’s case study and the question is repeated often

Sanjay ( 31 Yrs ) requires to build corpus for holiday to withdraw 75000 p a(current price) from age of 45 till his lifetime . On retirement and post retirement withdrawal should be limited to 50000 p a (Current price ).Cost of escalation of holiday expenses is 6 % p.a .The corpus is accumulated through equity MF by way of quarterly investment immediately till his retirement ( 62 Yrs ). Funds required for holidays for 5 year block periods would be switched from equity MF to debt MF .Find the amount of quarterly investment required.

Sanjay’s expected life : 80 years

ROI Equity & Equity MF schemes/ Index ETFs : 11.00% p.a. & Debt MF schemes- 7.00% p.a.

Please could you suggest the solution for the benefit of all.

fPS; I think we have to find The funds required for each block of 5 years with RRR (Debt ), find PV /FV at 62. Then find the Quarterly SIP. But I am not very sure of the working. Please could you help

Thanks

## R Varadarajan said

Dear Prashant,

This has reference to the Sanjay’s case study and the question is repeated often

Sanjay ( 31 Yrs ) requires to build corpus for holiday to withdraw 75000 p a(current price) from age of 45 till his lifetime . On retirement and post retirement withdrawal should be limited to 50000 p a (Current price ).Cost of escalation of holiday expenses is 6 % p.a .The corpus is accumulated through equity MF by way of quarterly investment immediately till his retirement ( 62 Yrs ). Funds required for holidays for 5 year block periods would be switched from equity MF to debt MF .Find the amount of quarterly investment required.

Sanjay’s expected life : 80 years

ROI Equity & Equity MF schemes/ Index ETFs : 11.00% p.a. & Debt MF schemes- 7.00% p.a.

Please could you suggest the solution for the benefit of all.

PS; I think we have to find The funds required for each block of 5 years with RRR (Debt ), find PV /FV at 62. Then find the Quarterly SIP. But I am not very sure of the working. Please could you help

Thanks

## Prashant Shah said

You are right. We will have to solve the same for individual blocks.

Say the amount required from 45 to 50 for each year will be discounted at the rate of debt mf. Same will be repeated for all the blocks. Get all the PV to present year and then find quarterly investment for 31 years.

Regards.

Prashant.

## R Varadarajan said

Dear Prashant,

Please could you give the solution to the above problem for the benefit of all.

Thanks

R Varadarajan

## Cfp said

Hi,

here 75000 and 50000 amounts are there. To calculate required amount which one should consider. And have to consider one of the value and compute fv for 5 years on it and then compute pv of the result till the age of 31. This will continue for the remaining 6 block periods. so on the sum of all pv is the fv amount to compute the sip payment.

Please suggest.

## Swapna said

Dear Prashant sir,

Regarding Ravinder Saxena Case study(2009) question no.2.

The question tells that he needs some amount for higher education to their three children.My approach is that first we have to

calculate Future Value of three children and then need to findout individual PMT’s.

Why do we calculate Present Value?He is not investing right now in the Balanced MF and he wants to know SIP amount to meet

the education expenses

Kindly clarify the above doubt

## Prashant Shah said

Dear Swapna,

In this case investment and withdrawal overlaps. Hence on the time-line the comparison point is year-0. Hence the approach is correct. This is movement on the time-line.

Feel free to ask further.

Regards,

Prashant V Shah.

## Swapna said

Dear Prashanth Sir,

Regarding Ravinder Saxena Case study(2009) question no.9

Processing fee is 2% on loan amount then it becomes 16,000/- So,total is 8,16,000/-

but in the solution it is 8,16,327/-.

Is there any Tax for Rs.327/-

## R Varadarajan said

Dear Swapna,

There is no question of any Tax. But the calculation of the Loan amount with the Interest is incorrect. Since the Financing Institution charges 2% processing fee on the Total Loan , he should get the Net amount of Rs.8,00,000/-after adjusting the processing fee ( ie ) 98% of the loan amount should be Rs.8,00,000. Hence Total loan amount would be = (800000x 100/98) = 816326.53 or Rs.81632.These are very minute points which should be remembered while answering such questions. With best wishes

R Varadarajan

## Swapna said

Dear Varadarajan Sir,

Regarding Senior Citizen Saving Scheme,if one of the joint holder deceased then the surviving parent operate account!

Kindly let me know the features of above scheme.

## Prashant Shah said

Yes surviving holder can operate the account but with his/her individual ceiling.

Regards.

## Swapna said

Dear Prashanth Sir,

In Case study of Vinod Gupta Q.No.6

I want to know Why option B is correct.why not option A?

Kindly clarify it

## Swapna said

Dear Prashanth

I’m going to take Adv-5 exam on 18th of this month.Practice of 2009 case studies are enough for the exam!

## Prashant Shah said

Also solve 2010 case studies and six sample questions given by fpsb. Master goal seek function to get through easily.

## Swapna said

FPSB provided only Sample papers not Questions do you have any sample questions?

## HARSHA said

dear swapna do u have questions for the case studies A-F which is provided by FPSB

## HARSHA said

dear prashanth sir can u post questions which is send by rithika

## Prashant Shah said

Compilation is still on. It may take time.

## Nithiyaa P V said

Dear Prashanth sir,

In 2010 case study Ms.irawati senna , can you please explain me concept of NFO. why in question number 11 we have to deduct NFO amount to find out PV of gold ETF.

## Bhagyashree said

Dear Prashant sir, can you please get those questions from ritika a little sooner I have my exams this month. And I also need to know which software are we allowed to use for calculation as it sometimes becomes difficult to do it on calculator.

## Prashant Shah said

Sure. I will try to get it done asap. U may be allowed to use excel or open office.

## mahaboob said

Hi sir i cleared my final module on dec -09. than q soo much sir for u and u r blog. it is very useful for me…..

## R Varadarajan said

Congratulations Mehboob on clearing the Final Module. Please could you post the cases & the questions you had received, from your memory for the benefit of others. Congratulations again

## Prashant Shah said

Congratulations for the success. Now step is to start ur own practice. And also help other to get through the exam. All the best.

Regards.

Prashant.

## mahaboob said

it’s my pleasure help to the blog visitors as of my knowledge. sir could u suggest me which side i choose can i join in CFP firm or in finance companies. recently i completed my MBA. i am from hyderabad, hear CFP firms are very low just like finger counting numbers…

## Prashant Shah said

Hi,

U may initially start career in BFSI. With a clear objective of setting ur own practice say after a year or two.

Keep helping our friends on this blog.

Regards.

## mahaboob said

thanq sir…

## Bhagyashree said

How many questions are asked per case study? And is it possible to solve all the questions in 4 hours?

## Prashant Shah said

There will be 15 questions per case study. You will have 2 such case studies.

Regards.

## Swapna said

Dear Prashant

Kindly let me know the interest rates of PO MIS,PPF,Senior citizen account..

## Prashant Shah said

All the rates are updated in small savings post under investment planning. Pls check.

## Swapna said

Dear Prashant Sir,

I’ve exam on 18th of this month.As per FPSB website for each case study

2 marks*5Q=10marks

3 marks*4Q=12marks

4 marks*2Q=8marks

5 marks*4Q=20marks

I just want to know Shall I get Questions in the same pattern or they will change?

## Prashant Shah said

All the questions will be as per the suggested classification.

Regards.

## Swapna said

Dear Sir,

But in 2010 case studies they didn’t follow such classification..

## Prashant Shah said

I agree. But now you will have questions in standard structure.

Regards.

## Swapna said

Dear Prashant,

Could you please provide list of Allowances and thier exempt limits for current FY for calculating Tax liability..

Please do the needful..

## Bhagyashree said

Sir,

What is the doubling period for Kvps 8 yrs and 7 months or 8 yrs and 4 months and 4 months?

## aarvi1948 said

As per the latest KVP rules the doubling period is 100 months – which is 8 years and 4 months

## Prashant Shah said

Thanks Aarvi for the quick reply. New KVP rules will be applicable in our exam from Feb 2015. Currently KVP is not part of curriculum.

Regards

## Nina Sundaran said

Dear R Varadarajan,

Your input to the queries is so appreciable.

I need you help. Am planning to give AFP paper. but I have no materials in my hand. I only have FPSB materials and Prashant Sir materials which is posted in this site.

I took a break for 1 year because of my marriage. Now I have no idea regarding the final paper. I need to refresh all. what will be the preparations that I should be taken to appear for the final paper

Do you have any materials for the final paper? If you have any materials kindly send it to me. It will be really helpful for me.

## Prashant Shah said

Dear Nina.

All relevant material is available on this site.

Regards.

## Nina Sundaran said

Dear Prashant Sir,

Ok sir thank you. I will check

## aarvi1948 said

Dear Nina,

As advised by Mr Prashant Shah, all the materials required are available in this blog. You should also go through the sample papers and solutions in FPSB Website. Best of Luck

R Vararadarajan

## Nina Sundaran said

Dear Varadharajan,

ok sir thank you..

## Nina Sundaran said

Dear Prashant Sir,

This site is really helpful for the candidates. It is really appreciable sir. Keep going on.

## Prashant Shah said

Dear Nina.

Thanks for all the appreciation. Keep connected and help others do their best.

Regards.

## Nina Sundaran said

Dear Prashant Sir,

Definitely will help others sir. Going to prepare for the paper. but dont know from where to start. anyway am going to try my level best sir.

## Bhagyashree said

Sir,

when are you going to upload the extra questions and solutions which ritika gave you. Please upload it soon

## Pradnya said

hello sir,

i am preparing for my final module exam, please help me in understanding below query

With reference to urvashi solanki case study

Q 7 ) Urvashi wants to invest regularly Rs. 50,000 p.a. for 20 years in National Saving Certificate (NSC)

starting from today. She would reinvest the maturity amount in each year from the beginning of the

7th year till the 20th year along with regular yearly investments in the NSC. From the 21st year she

would invest the maturity proceeds of NSC in a liquid MF scheme. She wants to know the total corpus

which would be available at the time of her retirement? (Please ignore taxes and charges if applicable)

I don’t understand how rs 130000 came in the 7 th year, which function to use i.e CASH ? , how to solve step by step. It will be better if you explain me the problem

## aarvi1948 said

Urvashi is 34 and will need the MV af 60 , after 24 years. She will invest @ Rs.50000 p a in NSC for 20 years by reinvesting the MV and from 21st year th investment would be in liquid funds suitbly so that all maturity values converge the

1. MV of the funds invested in the 1st year would be Rs.80051 ( I=4%, n= 4, pv=-50000, & type 1) Since the reinvestment has to be in multiple of 100 ( NSC rules ) this will be rounded off to Rs.80000. Adding the 50000 fresh invesment of that year, total invesment of 7th year would be 80000+50000 = 130000. Similar effect for the years 8 – 12. For the 13the year, the investment amount would be MV of Rs.130000 invested in the 7th year + 50000 (fresh investment of 13th( that ) year), which will be 258000 ( I=4%, n=12, Pv=-130000) Same will continue for years 14-18. Similar treatment investment for the year 19 & 20. Thereafter, there will no fresh investments , but the MVs of NSCs would go to Liquid fund at interest rate of 5.5% 6, 5,4,3 years. The MV of the investments made in the year 19 & 20 would go to Liquid fund for 2 years and 1 year. This would ensure that the entire funds would be available in the 27th year. Trust this clafies.

With best wishes,

R Varadarajan

## Nithiyaa P V said

Dear Prashanth sir ,

Can you please upload the questions sent by ritika . . i am planning to give my exams this month end . those questiond will be very useful for my preparation .

Thanks

Nithiyaa

## Harry said

Prashant Sir,

Questions from Ritika is pending for everybody benefit

Please upload the same sir

Harry

## Prashant Shah said

I know. But could not covert pics to text. I will upload those pics.

## Harry said

Thanks Prashant Sir, we would be awaiting for those pics to uploaded here as early as possible.

## Nithiyaa P V said

Yes sir, we are really waiting for those pictures to be uploaded sir…

## Rohit said

Hi Prashant Sir,

I am appearing for the last module exam on 23rd Jan 2015. Will the small savings schemes interest rates, tenures and withdrawal rules be the same as the ones you updated on 1st Feb 2014?

## Prashant Shah said

Yes they will remain same till 4th feb.

## Harry said

Prashant Sir,

Awaiting for the files for Questions which Ritika gave

Can you upload the files or provide the dropbox link here so that everyone can download the same

Harry

## Shashi said

Prashant sir Hi,

I am Shashi apearing for cfp advance module on this 29 jan, now am very nervous for exam cos my registration is also end with this march, and a i have cleared this final exam anyhow… sir how to prepeared pls advice.

## Prashant Shah said

Solve past case studies and sample on fpsb site.

## Koushik Sur said

Dear Prashant Sir, have completed CFP in a regular pathway. After completion of initial 4 papes within 3 mnth, took a gap of 9 mnth and finally cleared the final paper last week. Thanks to you and your blog for helping me to get good grade.Thanks once again.

## Shashi said

Dear Rohit,,

congrats, for last exam.

my final exam on this 29 jan pls advice some tips

## Koushik Sur said

I got the combination of Ashwin and Sahanubhuti. In both the case studies all questions were based on time line. Practice Retirement Planning module thoroughly. Also some tricky things like, tax calculation or asset allocations or suggestions on better returns includes with time line questions.

I got 1 question which gives 4 asset allocation strategies as 4 options. we have to select the right strategy.

Another is like, better return of FMPs than FDs.

Also got capital gain questions in both case studies.

Theory was based on code of ethics, accidental insurance, FPSB is a SRO, taxation on gift, taxation on home loan.

## Harry said

Dear Prashant Sir,

I have cleared the final AFP exam with B Grade in the first attempt only. Thanks for your blog for all the helpful information. It was really a helpful experience for being here.

Wish all the members here all the best for their exam.

Harry

## Prashant Shah said

Congratulations..

## Rajat said

Harry , Please share some important points i have a paper on 30 jan.

## HIMANSHU said

Hi Harry Congratulations!!

Please share some question, which type of question you got in your exam. I have also my examination on 30th Jan

## Harry said

I got Ashwin and Sahanbuti Case, Questions were mainly on time value

Corpus Questions, Networth, Insurance needs,

Got two XIRR questions also, so one should practice the same on excel.

Theory questions were Accidental insurance, Vehicle insurance, CFP marks

I am also recollecting and noting down all the questions, would share the questions with all the boarders here.

Harry

## HIMANSHU said

Thanks Harry , Prashant sir & your bolgs.

I have Cleared AFP with Grade A got Ashwin & MaheshNeelam. Exam is typically on time value & got 2 question in mahesh on Insurance return.

## Prashant Shah said

Dear Himanshu.

Congratulations…

## Pradnya said

with ref to sp-3 quest on mr pramod, i want to know how the taxation of debt oriented mf will change as per new assessment year. since LTCG Will be after 3 yrs of completion.

## Prashant Shah said

Ltcg on debt mutual fund is calculated only after 3 years that to with indexation. 10% is not applicable anymore. Try to solve this and let me know whether you get it right or not.

## Cfp said

Hi,

please share 2010,11,12 and 13 case studies.

## Prashant Shah said

Hi,

There are no case studies available for the period after 2010 as fpsb changed monthly exam to daily online exam.

Regards

Prashant.

## Cfp said

Thanks , if possible will u please share few scenarios regarding “goal seek” function

## shraddhasoni said

Hello,

please help me with this question ,this is with reference to sahanubhuti case study ;

To Fund the Boarding school expenses of sambhavi you had advised through Bank savings for the 1st year expense. You also recommend her to start a monthly SIP for 2 years in a liquid fund and remaining years by investing equal amounts in an Equity MF and a Balance MF. Sahanubhuti wants to know the SIP amount required.

## jaspreet singh thukral said

hii

i am apeariang for afp examon 16 june, kindly refer some questions or case studies which i can solve as practice.

## mounikadas said

can u please share ur experience of ur exam which may help me im giving final module on this september 20

## Sasidhar said

In the solution of question:9 of Vijay case study, how come the unpaid premium is 7500/- and not 2500/- ? Can any one clarify please.

## anushka jain said

Virkant plans to invest regularly on a quaterly basis an amount of Rs. 3000 in his PPF a/c till its maturity. The amounts are proposed to be deposited in the first five days of july, october january, and april every year. He has made no transaction in his PPF a/c since the begning of this financial year. Vikrant wants to know the approximate maturity amount of his PPF a/c. ( Referance case : Vikrant SAHABJI , nov :2009).

the question said, He has made no transaction in his PPF a/c since the begning of this financial year.

can u plz explain what exact meaning of this line?

## Prashant Shah said

Dear Anushka,

Calculation for the said question is easy.

1st qtr investment will fetch return for 12 months

2nd qtr investment will fetch return for 9 months

for 3rd and 4th qtr eligible period for interest is 6 and 3 months respectively.

amount of interests will be 240, 180, 120 and 60.

Make a total of all i.e. 12000+600 = 12600 is an accumulation for the year.

Take the same amount as PMT and go ahead with the question.

Regards.

## Prashant Shah said

Dear Anushka,

Calculation for the said question is easy.

1st qtr investment will fetch return for 12 months

2nd qtr investment will fetch return for 9 months

for 3rd and 4th qtr eligible period for interest is 6 and 3 months respectively.

amount of interests will be 240, 180, 120 and 60.

Make a total of all i.e. 12000+600 = 12600 is an accumulation for the year.

Take the same amount as PMT and go ahead with the question.

‘He has made no transaction in his PPF a/c since the beginning of this financial year.

can u plz explain what exact meaning of this line’

Here you need to calculate simple interest and complete the financial year and go ahead with above method.

Regards.

## vikas rawat said

PPF Balance as on 31 march 2009- Rs 25000

after 1 year =fv(8%;1;0;-25000;0)= 27000

Jan month 2010- 3000

interest for 3 month= 3000*8%*3/12= 60

Total=30060

amount of interests will be 240, 180, 120 and 60.

Make a total of all i.e. 12000+600 = 12600 is an accumulation for the year.

=fv(8%;6;-12600;30060;0)

=Ans 140134

## sai said

Hello Sir,

If am going to attend CFP EXAM 5 in APRIL 2018, could you please tell me which assessment year(2017-18 or 2018-19) will be applicable to EXAM 5 from APRIL 2018.

## Prashant Shah said

Hello regret for vary late response,

The applicable AY in your exam is 2017-18 up to April end.

Best wishes,

Prashant

## Sweta Kanodia said

hi ! m appearing for AFP in next month i.e march 2019 plz help what should i study xcept roger m urvashi case study.

## pankaj sharma said

sir i am apperaring AFP Exam in 27 mar 2019. plz help what should i study ??????