Paper/Subject Code: 46009/Finance: Wealth Management
TYBMS SEM :5
Finance :
Wealth Management
(Most Imp Short Notes with Solution)
Note:
1) All questions are compulsory subject to internal choice.
2) Figures to the right indicate full marks.
3) Use of simple calculator is allowed
Q.1 Yield Curve
The yield curve is a crucial financial concept that illustrates the relationship between interest rates and the time to maturity of debt securities, typically government bonds. It serves as a vital tool for investors, economists, and policymakers to gauge market expectations regarding future interest rates, economic growth, and inflation. This document provides a brief overview of the yield curve, its shapes, and its implications for the economy.
The yield curve is typically plotted with the interest rates on the vertical axis and the time to maturity on the horizontal axis. There are three primary shapes of the yield curve:
Normal Yield Curve: This upward-sloping curve indicates that longer-term bonds have higher yields than short-term bonds. It reflects investor confidence in economic growth and is often associated with a healthy economy.
Inverted Yield Curve: This downward-sloping curve occurs when short-term interest rates are higher than long-term rates. An inverted yield curve is often seen as a predictor of economic recession, as it suggests that investors expect future interest rates to decline due to a slowdown in economic activity.
Flat Yield Curve: A flat curve indicates that there is little difference between short-term and long-term interest rates. This can occur during periods of economic uncertainty or transition, where investors are unsure about future economic conditions.
The yield curve is not only a reflection of current economic conditions but also a predictor of future economic activity. Changes in the shape of the yield curve can signal shifts in monetary policy, inflation expectations, and overall market sentiment. Understanding the yield curve is essential for making informed investment decisions and assessing the broader economic landscape.
Q.2 Principle of Utmost good faith
The Principle of Utmost Good Faith is one of the most important principles of insurance contracts. It is a Latin term known as Uberrimae Fidei, which means “of the utmost good faith.”
Unlike ordinary commercial contracts, where the rule is caveat emptor (“let the buyer beware”), insurance contracts depend entirely on mutual trust and full disclosure between the parties — the insurer and the insured.
Insurance involves assessing and accepting risk, which is only possible when all relevant facts are known to both sides. Therefore, both parties are legally bound to act in good faith and disclose all material facts truthfully.
Meaning
The principle means that both parties entering an insurance contract must disclose all material facts known to them.
A material fact is any fact that would influence the insurer’s decision to accept the risk or determine the premium.
If any material fact is hidden, misstated, or not disclosed, the insurance contract becomes invalid because it is based on incomplete or false information.
Need for the Principle
Insurance contracts are based on trust rather than direct inspection or verification. The insurer cannot personally check every detail about the person or property being insured. Hence, they rely on the information given by the insured.
This makes good faith essential. Without it, the insurer may end up accepting a risk they wouldn’t have taken had they known the full truth.
Duties of the Insured
The insured has the primary duty of full disclosure. They must:
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Disclose all material facts related to the subject matter of insurance.
Example: Age, health conditions, previous illnesses, occupation, lifestyle habits (for life insurance); or safety measures, type of construction, previous fire incidents (for fire insurance). -
Avoid misrepresentation — All statements made must be true to the best of their knowledge.
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Inform the insurer of any changes in circumstances that may increase the level of risk during the policy term.
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Answer all questions honestly in the proposal form or during underwriting.
If the insured hides or misstates facts, the insurer can cancel the contract or reject the claim.
Duties of the Insurer
The principle applies equally to the insurance company. The insurer must:
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Clearly explain all policy terms and conditions to the insured.
This includes what is covered, what is excluded, and under what situations claims may be rejected. -
Avoid misleading statements in advertisements, brochures, or while selling the policy.
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Be transparent about premium rates, claim procedures, and policy limitations.
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Act fairly and promptly while settling claims.
Material Facts
A material fact is any piece of information that can affect the insurer’s decision about:
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Whether to accept or reject the risk.
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The amount of premium to be charged.
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The conditions to be applied to the policy.
Examples:
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Life Insurance: Age, health history, smoking/drinking habits, family medical history.
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Fire Insurance: Type of business, building structure, fire safety precautions.
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Marine Insurance: Type of cargo, condition of the ship, route and season of voyage.
If any of these facts are not disclosed or are wrongly stated, it can lead to cancellation of the policy.
Consequences of Non-Disclosure or Misrepresentation
Failure to follow the principle of utmost good faith can have serious results:
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Policy becomes void or voidable — The insurer can cancel the contract.
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Claim rejection — If the insured hides important facts, the insurer can refuse to pay any claim.
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Loss of premium — The insured may lose the premium paid.
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Legal action — In case of deliberate fraud or false information, the insurer may take legal steps against the insured.
Example
Suppose Mr. A takes a life insurance policy but hides that he has diabetes and a heart condition. Later, if he dies due to heart failure, the insurance company can deny the claim. This is because Mr. A failed to disclose a material fact — violating the principle of utmost good faith.
Importance of the Principle
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Builds trust between insurer and insured.
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Helps accurate risk assessment and fair premium calculation.
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Prevents fraud and disputes.
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Ensures transparency and fairness in insurance contracts.
3) Health Insurance
Health insurance is a type of coverage that pays for medical and surgical expenses incurred by the insured. It is an essential aspect of financial planning, as it helps individuals manage the costs associated with healthcare services. This document provides a concise overview of health insurance, its importance, types, and key considerations for individuals seeking coverage.
Health insurance is crucial for protecting individuals and families from high medical costs. It provides access to necessary healthcare services, including preventive care, hospitalization, and prescription medications. By paying a premium, policyholders can mitigate the financial burden of unexpected health issues, ensuring they receive timely and appropriate medical attention.
There are various types of health insurance plans, including employer-sponsored plans, government programs like Medicare and Medicaid, and individual plans purchased through private insurers. Each type has its own benefits, coverage options, and eligibility requirements, making it essential for individuals to assess their specific needs and circumstances when selecting a plan.
When considering health insurance, individuals should evaluate factors such as premiums, deductibles, copayments, and out-of-pocket maximums. Additionally, understanding the network of healthcare providers and the scope of covered services is vital to ensure that the chosen plan aligns with personal health needs.
4) Public Provident Fund
The Public Provident Fund (PPF) is a long-term savings scheme backed by the Government of India, designed to encourage individuals to save for their future while also providing tax benefits. It is particularly popular among those looking for a secure investment option with attractive interest rates and minimal risk. This document provides a concise overview of the key features, benefits, and rules governing the PPF.
Features of PPF :
Tenure: The PPF has a lock-in period of 15 years, which can be extended in blocks of 5 years.
Interest Rate: The interest rate is set by the government and is typically higher than that of traditional savings accounts. It is compounded annually.
Minimum and Maximum Investment: The minimum investment required is ₹500 per year, while the maximum limit is ₹1.5 lakh per financial year.
Tax Benefits: Contributions to the PPF are eligible for tax deductions under Section 80C of the Income Tax Act, and the interest earned is tax-free.
Withdrawal Rules: Partial withdrawals are allowed after the completion of 5 years, subject to certain conditions.
Benefits of PPF :
Safety: Being a government-backed scheme, the PPF is considered a safe investment option with guaranteed returns.
Tax Efficiency: The dual benefit of tax deductions on contributions and tax-free interest makes PPF an attractive choice for tax planning.
Loan Facility: Account holders can avail loans against their PPF balance after the third financial year, providing liquidity in times of need.
5) HNWI
High Net Worth Individuals (HNWIs) are individuals or households with a significant amount of liquid assets, typically defined as having at least $1 million in investable assets, excluding primary residence. This demographic is crucial in the financial and investment sectors, as they often seek specialized services and investment opportunities that cater to their wealth management needs. HNWIs play a vital role in the economy, influencing market trends and philanthropic endeavors.
HNWI characteristics often include a diverse investment portfolio, a focus on wealth preservation, and a tendency to engage in alternative investments such as private equity, hedge funds, and real estate. Financial institutions and wealth management firms often target this group with tailored services, including estate planning, tax optimization, and personalized investment strategies. Understanding the behavior and preferences of HNWIs is essential for businesses looking to engage with this affluent segment effectively.
6) Components of Wealth Management
Wealth management is a comprehensive and personalized financial advisory service designed to help individuals, particularly high-net-worth individuals (HNWIs) and their families, manage, grow, and preserve their financial assets over the long term. It goes beyond traditional financial planning by integrating various aspects of a client's financial life into a cohesive strategy.
The key components of wealth management typically include:
Financial Planning: This forms the cornerstone, involving a thorough assessment of a client's current financial situation (income, expenses, assets, liabilities), setting clear financial goals (e.g., retirement, education, major purchases), and creating a roadmap to achieve them.
Investment Management: A core element, this involves developing and managing a diversified investment portfolio aligned with the client's risk tolerance, time horizon, and financial goals. This includes asset allocation across various asset classes (stocks, bonds, real estate, alternative investments) and ongoing monitoring and rebalancing of the portfolio.
Tax Planning and Optimization: Wealth managers devise strategies to minimize tax liabilities on income, investments, and wealth transfer. This involves utilizing tax-efficient investment vehicles, maximizing deductions, and planning for capital gains and estate taxes.
Estate Planning: This component focuses on the efficient and tax-effective transfer of wealth to heirs or beneficiaries according to the client's wishes. It involves drafting wills, setting up trusts, and considering charitable giving strategies to preserve legacy and minimize estate taxes.
Risk Management and Insurance: Identifying and mitigating financial risks is crucial. This includes assessing and addressing potential threats to wealth through appropriate insurance coverage (life, health, disability, property, liability) and other risk mitigation strategies.
Retirement Planning: A specialized aspect of financial planning, it focuses on building a sufficient corpus for a secure and comfortable retirement, including selecting suitable retirement accounts, contribution strategies, and withdrawal plans.
Cash Flow Management and Debt Management: Effective management of income and expenses, along with strategic debt reduction, is essential for optimizing financial resources and freeing up capital for investment.
Other Specialized Services: Depending on the client's needs, wealth management may also encompass business succession planning, philanthropic advisory, and even concierge services.
7) New Pension Scheme
The New Pension Scheme (NPS), also known as the National Pension System, is a voluntary, defined contribution retirement savings scheme launched by the Government of India.
Features of NPS:
- Voluntary and Flexible: Individuals can choose to contribute regularly or periodically, and there's flexibility in contribution amounts (within minimum limits).
- Defined Contribution: Unlike older "defined benefit" pension schemes, the final pension amount in NPS depends on the contributions made and the market-linked returns generated on those investments.
- Market-Linked Returns: Funds contributed are invested by professional fund managers in a diversified portfolio comprising equities, corporate bonds, and government securities.
Subscribers can choose their investment mix (Active Choice) or opt for an automatic allocation based on age (Auto Choice). - Low Cost: NPS is known for its very low administrative and fund management charges, making it a cost-effective retirement savings option.
- Portable: The NPS account (identified by a unique Permanent Retirement Account Number or PRAN) is portable across jobs and locations, ensuring continuity of savings even with career changes.
- Two Account Types:
- Tier I Account: This is the primary pension account, with withdrawal restrictions and associated tax benefits.
A portion of the corpus is mandated for annuity purchase upon retirement. - Tier II Account: This is an optional savings account offering greater flexibility in terms of withdrawals, but it generally does not provide the same tax benefits as Tier I.
- Tier I Account: This is the primary pension account, with withdrawal restrictions and associated tax benefits.
- Tax Benefits: NPS offers attractive tax benefits on contributions under various sections of the Income Tax Act, including Section 80CCD(1), 80CCD(1B), and 80CCD(2) for employer contributions.
- Retirement Planning: The core objective of NPS is to encourage systematic savings for retirement, helping individuals build a substantial corpus to ensure financial security in their post-retirement years.
Upon retirement, a portion of the accumulated corpus can be withdrawn as a lump sum, while the remaining is used to purchase an annuity, providing a regular pension income for life
8) Tax Deducted at source
Tax Deducted at Source (TDS) is a mechanism implemented by tax authorities (like the Income Tax Department in India) to collect taxes at the very source of income.
TDS applies to a wide range of income types, including:
- Salaries
- Interest on fixed deposits
- Rent payments
- Professional fees (e.g., for doctors, lawyers, consultants)
- Commission payments
- Contractor payments
- Certain winnings (e.g., from lotteries)
Key aspects of TDS:
- Payer's Responsibility: The deductor (payer) is responsible for deducting the correct amount of TDS at the specified rates and depositing it with the government within prescribed timelines.
- Recipient's Credit: The deductee (recipient) receives the net amount after TDS.
This deducted amount is then reflected in their tax credit statement (like Form 26AS in India) and can be claimed as a credit against their final tax liability when they file their income tax return. - Advance Tax Collection: TDS acts as a form of advance tax payment, helping the government collect revenue consistently throughout the year.
- Preventing Evasion: It also helps in preventing tax evasion by ensuring that tax is collected at the point of income generation.
- Forms and Certificates: Deductors are required to file periodic TDS returns and issue TDS certificates (e.g., Form 16 for salaries, Form 16A for non-salary payments) to the deductees, detailing the tax deducted.
9) Post Office Monthly Investment Scheme (MIS)
The Post Office Monthly Investment Scheme (MIS), officially known as the Post Office Monthly Income Scheme, is a popular small savings scheme in India, backed by the Government of India.
- Objective: To provide a steady stream of income to investors, particularly retirees, senior citizens, and those looking for a low-risk, predictable monthly payout.
- Investment: You make a one-time lump sum deposit into the scheme.
- Maturity Period: The scheme has a fixed tenure of 5 years.
- Interest Rate: The interest rate is fixed by the Ministry of Finance and is reviewed quarterly.
As of the latest updates (April-June 2025 quarter), the interest rate is 7.40% per annum, paid out monthly. - Monthly Payouts: As the name suggests, the interest earned on your deposit is paid out to you every month. This can be directly credited to a Post Office Savings Account or a bank account via ECS.
- Investment Limits:
- Single Account: Maximum investment of ₹9 lakh.
- Joint Account (up to 3 adults): Maximum investment of ₹15 lakh.
- Minimum investment is ₹1,000.
- Safety: Being a government-backed scheme, it offers high capital protection, making it a very safe investment option.
- Taxation: The interest earned from MIS is taxable as per the investor's income tax slab. However, there is no Tax Deducted at Source (TDS) on the interest. The principal invested does not qualify for tax benefits under Section 80C.
- Premature Withdrawal: Allowed after 1 year, but with penalties.
If withdrawn between 1 and 3 years, a 2% penalty on the principal is deducted. If withdrawn between 3 and 5 years, a 1% penalty applies.
- Eligibility: Any resident Indian adult can open an account individually or jointly.
A guardian can open an account on behalf of a minor (a minor above 10 years can also open an account in their own name). NRIs are not eligible.
10) Importance Of Yield Curve
The yield curve is a powerful and closely watched economic indicator that graphically plots the yields (interest rates) of bonds with equal credit quality but varying maturity dates.
Important:
Economic Barometer and Recession Predictor:
- Normal Yield Curve (Upward Sloping): This is the most common shape, where longer-term bonds offer higher yields than shorter-term bonds.
It signals a healthy, growing economy where investors expect future interest rates to rise due to economic expansion and inflation. - Inverted Yield Curve (Downward Sloping): This occurs when short-term yields are higher than long-term yields.
It's a rare and historically reliable predictor of a forthcoming economic recession. Investors, anticipating a slowdown or recession, flock to the safety of long-term bonds, driving their prices up and yields down, while central banks may be keeping short-term rates high to combat inflation. - Flat Yield Curve: This indicates uncertainty about future economic conditions, often occurring as the economy transitions between expansion and contraction, or vice-versa.
- Normal Yield Curve (Upward Sloping): This is the most common shape, where longer-term bonds offer higher yields than shorter-term bonds.
Forecasting Interest Rates and Inflation:
- The shape of the yield curve reflects the collective expectations of bond market participants regarding future interest rates and inflation.
An upward slope suggests expectations of rising rates and inflation, while an inverted curve implies expectations of future rate cuts (due to an economic slowdown) and potentially lower inflation.
- The shape of the yield curve reflects the collective expectations of bond market participants regarding future interest rates and inflation.
Monetary Policy Guidance:
- Central banks (like the RBI in India or the Fed in the US) closely monitor the yield curve.
It provides insights into how the market perceives their current and future monetary policy actions. For example, a steepening curve might indicate that the market expects central banks to tighten policy, while a flattening or inverting curve might signal expectations of future easing. It's also central to the transmission of monetary policy, as changes in policy rates influence the entire curve, affecting borrowing costs for businesses and consumers.
- Central banks (like the RBI in India or the Fed in the US) closely monitor the yield curve.
Pricing of Financial Products:
- The yield curve serves as a benchmark for pricing a wide array of financial products, including loans, mortgages, corporate bonds, and derivatives.
Banks, for instance, often borrow short-term (at lower rates) and lend long-term (at higher rates), making their profitability sensitive to the spread between short and long-term yields.
- The yield curve serves as a benchmark for pricing a wide array of financial products, including loans, mortgages, corporate bonds, and derivatives.
11) Responsibilities of the insured
The "insured" refers to the person or entity who is covered by an insurance policy. While the insurer has obligations to pay claims, the insured also has crucial responsibilities that are vital for the policy's validity and the smooth processing of claims. Failing to meet these responsibilities can lead to claim rejection or policy cancellation.
key responsibilities of the insured:
Provide Accurate and Complete Information:
- At Proposal Stage: The insured must disclose all material facts honestly and completely when applying for the policy. "Material facts" are any facts that could influence the insurer's decision to accept the risk, set the premium, or determine the terms of the policy (e.g., pre-existing medical conditions in health insurance, previous accidents in motor insurance, or specific business operations in commercial insurance). This is based on the principle of "utmost good faith" (uberrima fides).
- During Policy Term: Any significant changes to the disclosed information or risk profile (e.g., change of address, significant lifestyle changes, modifications to property, or increased business risk) must be communicated to the insurer promptly.
Pay Premiums on Time:
- The insured is responsible for ensuring that premiums are paid by the due date. Timely payment is fundamental for the policy to remain active and for coverage to continue. Non-payment can lead to lapse of the policy, meaning no coverage will be available for future incidents.
Take Reasonable Care to Prevent Loss/Damage:
- The insured must act prudently and take reasonable steps to prevent or minimize loss or damage to the insured property or person. This means not being reckless or negligent. For example, a homeowner should lock their doors, and a driver should adhere to traffic laws. Insurance is meant to cover unforeseen events, not losses resulting from deliberate neglect.
Notify the Insurer Promptly of a Claim/Loss:
- In the event of an incident that could lead to a claim, the insured must inform the insurer as soon as reasonably possible, typically within a specified timeframe (e.g., 24-48 hours for motor accidents, immediately for fire). Delays in notification can prejudice the insurer's ability to investigate the claim and may lead to rejection.
Cooperate with the Insurer During Claim Investigation:
- The insured must provide all necessary documents, evidence, and information requested by the insurer or their appointed surveyors/investigators to assess the claim. This includes submitting police reports, medical records, repair estimates, photographs, and any other relevant proof. Lack of cooperation can hinder the claim process.
Mitigate Further Loss (Post-Incident):
- After an incident, the insured has a responsibility to take reasonable steps to prevent further loss or damage to the insured subject matter. For example, after a burst pipe, the homeowner should try to stop the water flow to prevent more damage to the property.
Do Not Exaggerate or Fabricate Claims:
- The insured must not inflate the value of a loss or make fraudulent claims. Such actions constitute fraud and can lead to immediate claim rejection, policy cancellation, and even legal consequences.
12) ULIP Pension Scheme
A ULIP Pension Scheme (Unit Linked Insurance Plan Pension Scheme) is a popular financial product in India that uniquely blends life insurance coverage with market-linked investment opportunities, specifically designed to build a corpus for retirement.
- Dual Benefit: A portion of your premium secures life insurance, while the larger part is invested in funds (equity, debt, or balanced) of your choosing, similar to mutual funds.
- Market-Linked Growth: Your returns depend on the performance of these chosen funds, offering the potential for higher returns compared to traditional plans, but also carrying market risk.
- Retirement Focus: It's structured with a long-term perspective and typically has a mandatory 5-year lock-in period to encourage disciplined savings for your post-retirement needs.
- Tax Benefits: Premiums paid are eligible for deduction under Section 80C, and the maturity/death benefits are generally tax-exempt under Section 10(10D) of the Income Tax Act, 1961 (subject to conditions, particularly the Rs. 2.5 lakh annual premium limit for policies issued after Feb 1, 2021).
- Flexibility: Most ULIPs allow you to switch between fund options to adapt to market conditions or your changing risk profile.
- Charges: Be aware that ULIPs come with various charges (premium allocation, mortality, fund management, etc.) which can impact your net returns, especially in the initial years.
13) Limitation of Ratio analysis
Ratio analysis is a valuable tool for evaluating a company's financial health and performance, but it has several significant limitations that analysts and decision-makers must consider:
Reliance on Historical Data: Ratios are calculated using past financial statements, which may not accurately reflect current or future financial conditions.
A company's situation can change rapidly due to new investments, market shifts, or economic downturns, making historical ratios less relevant for predicting future performance. Ignores Qualitative Factors: Ratio analysis focuses solely on quantitative, financial data.
It overlooks crucial qualitative aspects of a business, such as management quality, employee morale, customer satisfaction, brand reputation, innovation, and market trends. These non-financial factors can significantly impact a company's success but are not captured by ratios. Differences in Accounting Policies and Methods: Companies may use different accounting methods (e.g., inventory valuation methods like FIFO vs.
LIFO, depreciation methods), which can lead to variations in financial figures and, consequently, in ratios. This makes it difficult to compare ratios across different companies, even within the same industry, without adjusting for these differences. "Window Dressing" and Manipulation: Financial statements can be manipulated or "window-dressed" by management to present a more favorable financial picture.
This can involve practices like accelerating revenue recognition, delaying expense payments, or making last-minute adjustments to make certain ratios appear better. Such manipulation can distort the true financial health of a company. Lack of Standardized Definitions: There's no universal standard for calculating all ratios. Different firms or analysts might use slightly different formulas for the same ratio, which can lead to inconsistencies and make comparisons challenging.
Industry-Specific Differences: Ratios that are considered good in one industry might be poor in another.
For example, a high debt-to-equity ratio might be normal for a capital-intensive manufacturing company but a red flag for a tech company. Comparing companies across different industries without considering their unique business models and capital structures can lead to misleading conclusions. Seasonal Effects: For businesses with seasonal operations (e.g., retail, tourism), annual ratios might mask significant fluctuations in performance throughout the year.
A single annual ratio might not capture the full picture of the company's financial performance during peak and off-peak seasons. Inflationary Effects: Financial statements are often based on historical costs, and ratios derived from them may not account for changes in price levels due to inflation.
This can distort comparisons of performance over different periods, especially during times of high inflation. Limited Scope: Ratios provide a snapshot of specific relationships but don't explain the underlying causes of those relationships.
A seemingly good ratio might hide operational inefficiencies or strategic missteps, and a poor ratio might be due to temporary factors that don't indicate long-term problems. No Absolute Standards: There are no universally accepted ideal ratios. What constitutes a "good" or "bad" ratio depends on the industry, company size, economic conditions, and specific goals. Ratios are most useful when compared against industry benchmarks, historical trends for the same company, or direct competitors.
14) Scope of Wealth Management
Wealth management is a comprehensive service that combines financial planning, investment management, tax planning, and other financial services to meet the specific needs of affluent individuals or families. Its primary goal is to grow, protect, and transfer wealth effectively.
Key areas within the scope of wealth management include:
Investment Management:
Designing and managing a diversified investment portfolio aligned with the client’s financial goals and risk tolerance.Financial Planning:
Creating a personalized roadmap covering retirement planning, education funding, insurance needs, and estate planning.Tax Planning:
Structuring investments and income to minimize tax liability within legal frameworks.Estate & Succession Planning:
Ensuring smooth transfer of wealth to heirs while preserving family legacy and minimizing legal complications.Risk Management:
Assessing and mitigating financial risks through appropriate insurance and asset protection strategies.Philanthropic Planning:
Helping clients fulfill charitable goals through structured giving strategies and trusts.
15) Health Insurance Mediclaim
Health Insurance, often referred to as Mediclaim, is a type of insurance policy that provides financial coverage for medical expenses incurred due to illness, injury, or hospitalization. It helps individuals and families manage the high costs of healthcare.
Features of Health Insurance / Mediclaim:
Coverage of Medical Expenses:
Includes hospitalization costs, surgery, doctor’s consultation fees, diagnostic tests, and sometimes even pre- and post-hospitalization expenses.Cashless Facility:
Many health insurance providers have tie-ups with hospitals (network hospitals) where treatment can be availed without upfront payment, subject to policy terms.Tax Benefits:
Premiums paid for health insurance qualify for tax deduction under Section 80D of the Income Tax Act.Types of Policies:
Individual Mediclaim – Covers a single person.
Family Floater Plan – Covers the entire family under one sum insured.
Critical Illness Cover – Provides a lump sum on diagnosis of specified serious illnesses.
Group Mediclaim – Offered by employers to their employees.
Add-on Benefits:
Policies may offer add-ons like maternity benefits, ambulance charges, health check-ups, and more.
Importance:
With rising healthcare costs, having a Mediclaim policy provides financial security, reduces out-of-pocket expenses, and ensures timely medical treatment without financial stress.
16) Active Investment Management
Active Investment Management is an investment strategy where a portfolio manager or investor actively makes decisions about buying and selling securities with the goal of outperforming a specific benchmark index, such as the Nifty 50 or S&P 500.
Characteristics:
Hands-On Approach:
Fund managers or analysts continuously monitor market conditions, economic trends, and company performance to make informed decisions.Goal of Outperformance:
The main objective is to generate higher returns than the market average or a specific benchmark index.Frequent Trading:
Active managers may frequently buy and sell stocks or other assets based on short- or long-term opportunities.Research-Driven:
Investment decisions are based on in-depth research, forecasts, and professional judgment rather than simply tracking the market.Higher Costs:
Due to frequent transactions and professional management, active funds often have higher management fees and operating costs compared to passive investments.
Advantages:
Potential for higher returns.
Flexibility to react to market changes.
Opportunity to take advantage of mispriced securities.
Disadvantages:
Higher costs and fees.
Risk of underperformance.
Dependent on manager skill.
17) Long term Capital gain Tax
Long-Term Capital Gains (LTCG) Tax is the tax levied on profits earned from the sale of capital assets held for a specified period, generally more than 12 months (for listed equity shares and equity mutual funds) or 36 months (for other assets like real estate, debt mutual funds, etc.).
Features:
Applicability:
LTCG tax applies to assets such as:Equity shares
Mutual funds
Real estate
Gold
Bonds and debentures
Tax Rate (India – as per current norms):
Equity-related gains: 10% on gains exceeding ₹1 lakh in a financial year (without indexation).
Other assets: 20% with indexation benefits (to adjust for inflation).
Indexation Benefit:
For non-equity assets, the cost of acquisition is adjusted using the Cost Inflation Index (CII), reducing taxable gains and, thus, the tax liability.Exemptions:
Certain exemptions are available under Sections 54, 54EC, and 54F of the Income Tax Act if the capital gains are reinvested in specified assets (like residential property or certain bonds).
18) Sukanya Samriddhi Scheme
he Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme launched under the "Beti Bachao, Beti Padhao" initiative, aimed at encouraging savings for the education and future of the girl child in India.
Features:
Eligibility:
Can be opened by parents or legal guardians of a girl child.
The girl must be below 10 years of age at the time of account opening.
Account Details:
Only one account per girl child is allowed.
A maximum of two accounts per family (for two girls) can be opened.
Investment Limits:
Minimum deposit: ₹250 per year.
Maximum deposit: ₹1.5 lakh per year.
Tenure:
Deposits can be made up to 15 years from the date of account opening.
The account matures after 21 years from the date of opening.
Interest Rate:
The interest rate is set by the government quarterly and is higher than most other small savings schemes.
Tax Benefits:
Offers EEE (Exempt-Exempt-Exempt) status:
Contributions qualify for deduction under Section 80C.
Interest earned and maturity amount are tax-free.
Withdrawal:
Up to 50% of the balance can be withdrawn after the girl turns 18 years, for education or marriage.
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2019 | Nov | ||
2022 | Nov | ||
2023 | April | Solution | |
2023 | Nov | ||
2024 | Nov | ||
2025 | April | Solution | |
Elective: Marketing : E-Commerce & Digital Marketing (CBCGS) | |||
Year | Month | Question Papers | Link |
IMP Q. |
|
| Solution |
2018 | Nov | ||
2019 | April | ||
2019 | Nov | ||
2022 | Nov | ||
2023 | April | ||
2023 | Nov | ||
2024 | Nov | ||
2025 | April | Solution | |
Elective: HR : Strategics HRM (CBCGS) | |||
Year | Month | Question Papers | Link |
IMP Q. |
|
| Solution |
2018 | Nov | ||
2019 | April | Solution | |
2019 | Nov | ||
2022 | Nov | ||
2023 | April | ||
2023 | Nov | ||
2024 | Nov | ||
2025 | April | Solution | |
Elective: Marketing : Sales & Distribution (CBCGS) | |||
Year | Month | Question Papers | Link |
IMP Q. |
|
| Solution |
2018 | Nov | ||
2019 | April | ||
2019 | Nov | ||
2022 | Nov | ||
2023 | April | ||
2023 | Nov | ||
2024 | Nov | ||
2025 | April | Solution | |
Elective: HR : Performance Management & Career Planning (CBCGS) | |||
Year | Month | Question Papers | Link |
IMP Q. |
|
| |
2018 | Nov | ||
2019 | April | ||
2019 | Nov | ||
2022 | Nov | ||
2023 | April | ||
2023 | Nov | ||
2024 | Nov | Solution | |
2025 | April | Solution | |
Elective: Finance : Financial Accounting (CBCGS) | |||
Year | Month | Question Papers | Link |
IMP Q. |
|
| Solution |
2018 | Nov | ||
2019 | April | Solution | |
2019 | Nov | ||
2022 | Nov | ||
2023 | April | Solution | |
2023 | Nov | ||
2024 | Nov | ||
2025 | April | Solution | |
Elective: Marketing : Customer Relationship Management (CBCGS) | |||
Year | Month | Question Papers | Link |
IMP Q. |
|
| Solution |
2018 | Nov | ||
2019 | April | ||
2019 | Nov | ||
2022 | Nov | ||
2023 | April | Solution | |
2023 | Nov | ||
2024 | Nov | ||
2025 | April | Solution | |
Elective: Human Resource: Industrial Relation (CBCGS) | |||
Year | Month | Question Papers | Link |
IMP Q. |
|
| |
2018 | Nov | Solution | |
2019 | April | ||
2019 | Nov | ||
2022 | Nov | ||
2023 | April | ||
2023 | Nov | ||
2024 | Nov | Solution | |
2025 | April | Solution | |
Elective: Finance : Risk Management (CBCGS) | |||
Year | Month | Question Papers | Link |
IMP Q. |
|
| Solution |
2018 | Nov | ||
2019 | April | ||
2019 | Nov | ||
2022 | Nov | ||
2023 | April | Solution | |
2023 | Nov | ||
2024 | Nov | ||
2025 | April | Solution | |
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