NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Evaluating the Financial Position of Clients
Meera, aged 35, earns a gross annual income of Rs 12,00,000. Her total monthly EMIs are Rs 30,000 and she pays Rs 10,000 monthly as rent. Her net worth is Rs 40,00,000 and her annual savings are Rs 2,40,000. What is her savings ratio (savings to gross income)?
Her savings ratio is 20%. It is annual savings of Rs 2,40,000 divided by gross annual income of Rs 12,00,000. EMIs, rent and net worth are not part of this ratio, which simply compares what is saved with total income earned.
- A20%Correct
- B25%
- C30%
- D16.7%
Explanation
Savings ratio = annual savings / gross annual income = 2,40,000 / 12,00,000 = 0.20 = 20%. The 25% option wrongly uses a different base, and 30% and 16.7% come from unrelated figures such as EMIs or net worth.
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