Skip to content

NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Case Studies in Comprehensive Financial Advice

Caselet: Mr. Nair, aged 50, needs a corpus of Rs 2 crore in 10 years. He currently has Rs 40 lakh earmarked for this goal in an investment expected to grow at 8% a year. Assuming (1.08)^10 = 2.16, what will his existing investment grow to, and what is the shortfall approximately?

The existing Rs 40 lakh grows to Rs 86.4 lakh and the shortfall is about Rs 1.136 crore. Multiplying 40 lakh by 2.16 gives 86.4 lakh, and subtracting this from the Rs 2 crore target leaves Rs 113.6 lakh to be funded by fresh investments.

  1. ARs 86.4 lakh; shortfall Rs 1.136 croreCorrect
  2. BRs 80 lakh; shortfall Rs 1.20 crore
  3. CRs 86.4 lakh; shortfall Rs 2.864 crore
  4. DRs 43.2 lakh; shortfall Rs 1.568 crore

Explanation

Future value = 40 lakh x 2.16 = 86.4 lakh. Shortfall = 200 - 86.4 = 113.6 lakh = Rs 1.136 crore. Rs 80 lakh uses simple interest. Rs 2.864 crore adds instead of subtracting, and Rs 43.2 lakh uses only a 1.08 factor.

Did you get it right without looking?

One question tells you little. A timed set on Case Studies in Comprehensive Financial Advice shows your real accuracy, how long you take and where you lose marks.

Practise Case Studies in Comprehensive Financial AdviceFree diagnostic mock

More Case Studies in Comprehensive Financial Advice questions