## Sample Paper of Investment Planning for CFP by FPSB

Posted by Prashant Shah on January 30, 2013

FPSB has just released a sample paper of Investment planning.

Click to download questions: http://www.fpsb.co.in/Upload/CFPSampleQPaper/SamplePaper_IP.pdf

Click to download solutions: http://www.fpsb.co.in/Upload/CFPSampleQPaper/SuggestedSolutions_IP.pdf

Sample papers for all the subjects have been published now.

Looking at all those it seems that we may have to sharpen the concepts well and be equipped better for the new course.

We may expect better coverage of all the topics in examination.

All the best.

## Roopa Soni said

Dear Vinayak Sir,

Request you to give solution of this numerical with the help of calci.

This numerical is from the FPSB sample paper.

An individual has recently purchased a house worth Rs. 40 lakh for self-occupation by availing housing loan of Rs. 28 lakh at 9.25% p.a. rate of interest. The tenure of loan is 18 years. He has Rs. 12 lakh financial assets at present. He is expected to save annually Rs. 2 lakh which he investes on a quarterly basis beginning a quarter from now in an instrument which is expected to provide return of 9% p.a. What would be his net worth five years from now? The value of the house which is for consumption purposes is not considered in the net worth so arrived.

Ans is 668338

## Roopa Soni said

Dear Sir,

Request you to see the section 3,question no 8.(FPSB sample paper )

Sir, in that question they want us to calculate home equity?please describe what is home equity and how to calculate it?

## Manish said

Dear roopa home equity refers to your ownership in the house, over the period of time ur ownership towards ur home increases bcoz ur o/s loan amt decreases. the opposite of this is reverse mortgage. In reverse mortgage ur home equity decreases bcoz in reverse mortgage u r not obliged to pay the loan amt. the ownership of ur house will be transferred to bank if u unable to pay the loan amt at the end of the predeterimined period.you can refer the solution for more clarity u just need to find out the o/s loan amt and taxes and deduct both from the current value of flat.

## rishabh agrawal said

Thank you so much sir. 🙂

## Roopa Soni said

Request you to give solution of this numerical with the help of calci.

This numerical is from the FPSB sample paper.

An individual has recently purchased a house worth Rs. 40 lakh for self-occupation by availing housing loan of Rs. 28 lakh at 9.25% p.a. rate of interest. The tenure of loan is 18 years. He has Rs. 12 lakh financial assets at present. He is expected to save annually Rs. 2 lakh which he investes on a quarterly basis beginning a quarter from now in an instrument which is expected to provide return of 9% p.a. What would be his net worth five years from now? The value of the house which is for consumption purposes is not considered in the net worth so arrived.

Ans is 668338

## Prashant Shah said

Dear Roopa,

For investments:

PV = 12,00,000

PMT = 50,000 (END)

N = 20

I/Y = QUARTERLY NOMINAL RATE OF 9%

FV = ?

FOR LOAN:

PV = 28,00,000

N = 18*12

I/Y = 9.25%/12

PMT = ?

NOW USE AMORT FUNCTION AND FIND THE CAPITAL OUTSTANDING AFTER 60 PAYMENTS.(P1=1 AND P2=60)

NET THE VALUE OF INVESTMETN AND OUTSTANDING LOAN TO GET THE ANSWER.

Regards,

Prashant V Shah.

## Roopa Soni said

Dear Prashant Sir,

Thanks for providing the solution.I would also like to thank Manish Sir and Vinayak Sir.I am really grateful to all of you.I have cleared the retirement planning module by following the manish sirs advise and guidance.Exam had a lot of questions from your blog(practice sets) mostly four marks. Now am planning for investment planning and tax planning.Request for a guidance as the syllabus has changed.

kindly guide for investment planning.

Sir,please update the changes applicable for AY 2013-14(tax planning)

except slab rates is there are other things also which have changed?please update.

## Manish said

Dear roopa congratulations on clearing retirement module and wish u all the best for rest of the modules.

## Anuja said

Q:A bond with par value of rs 1000 and coupon rate of 11% (payable semi-annually, next coupon due immediately) and maturing after 5 years is available at Rs.942.50 in the market. If the coupon received can be reinvested till maturity at average rate of 8.5% pa. What could be realized rate of return from such investment if the bond is held till maturity?

Options: .

a.13.33%

b. 13.15%

c. 13.90%

d. 13.60%

My Solutions:

Step1: Coupon Reinvestment

S=E

N=5*2=10

I=8.5

PV=0

PMT=-55

FV=?668

P/Y=2

C/Y=2

FUTURE VALUE+(FV)1000=1668

CURRENT PRICE=942.5

HENCE: (1668/942.5)^(1/5)-1)*100= 12.68%

ANS DOES NOT MATCH..

PLEASE HELP

## Prashant Shah said

Dear Anuja,

I have solved this question and solution is also posted earlier.

refer to the solution:

PMT = 55(BGN)

N = 11

I/Y = 4.25

FV = 783 (ACCUMALATED VALUE OF INTEREST)

TOTAL ACCUMULATION = 1783

REALISED YIELD:

PV = -942.5

FV = 1783

N = 10

I/Y =?

CONVERT SAME INTO ANNUAL EFFECTIVE TO GET 13.6%

## anuja said

Thanks a lot Prashant sir. But in 1st step we get the fv as 783 only when p/y is taken as 1. I am not able to understand. How p/y can be 1 when n is 11( because semiannual coupons..)..

Please help

## Karan said

1. Mr. A is of 35 yrs with spouse and a kid of an age 5 yrs. His strategic asset allocation is 50:35:15 in equity, debt and liquid. He is able to invest rs 1.5lakh pa immediately to work various life goal. At age 40 the allocation would change to 40:50:10 in equity, debt and liquid asset with annual investment going up to 2.5 lakh for 5 more years. At age 45, for next 10 year he adapts the conservative wealth protection allocation 25:70:5 in eq, debt & liquid asset with 3 lakh pa investments. The per annum return expected in this stage are; from equity : 12%.11% & 10%, from debt : 9%,8% & 7%, from liquid asset : 6,5%,5.5% & 4.5%.What amount could he accumulate by his age 55 years?

a. 113.9 lakhs

b. 97.21 lakhs

c. 66.65 lakhs

d. 117.91 lakhs

i solved this question and get 117.91 Lakhs…Please advice is this correct

## Prashant Shah said

Dear Karan,

Your answer is absolutely perfect. And I am also done with all the questions. So post all the answers with adequate workings.

Regards,

Prashant V Shah.

## Suresh Patel said

So please give us solution for the same question………

## Karan said

Thanks a lot Sir…will post all the Ans with solutions..