NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Introduction to Personal Financial Planning
Meera's monthly expenses are Rs 40,000, including a home loan EMI of Rs 12,000. Her adviser recommends an emergency fund equal to 6 months of essential expenses. Meera's liquid savings are Rs 1,50,000. What is the shortfall in her emergency fund, taking all Rs 40,000 as essential expenses?
The target emergency fund is 6 times Rs 40,000, which is Rs 2,40,000. Meera has Rs 1,50,000 in liquid savings, so the shortfall is Rs 90,000. The EMI is included because loan obligations must continue during an emergency.
- ARs 90,000Correct
- BRs 1,50,000
- CRs 60,000
- DRs 2,40,000
Explanation
Target = 6 x 40,000 = Rs 2,40,000. Shortfall = 2,40,000 - 1,50,000 = Rs 90,000. Using only the EMI-excluded expenses (28,000 x 6 = 1,68,000) would be wrong because EMI is a committed obligation that must be covered.
Did you get it right without looking?
One question tells you little. A timed set on Introduction to Personal Financial Planning shows your real accuracy, how long you take and where you lose marks.
More Introduction to Personal Financial Planning questions
- Which of the following is correctly classified as a liability that should be shown on a client's personal balance sheet?
- In the financial planning process followed by an investment adviser, which step comes immediately after gathering the client's data and dete…
- Meera Iyer has annual income of Rs 12,00,000. Her annual cash outflows are: living expenses Rs 6,00,000, EMI payments Rs 2,40,000 and insura…
- Ramesh, aged 30, has monthly expenses of Rs 40,000 and keeps an emergency fund covering 6 months of expenses. He holds the fund in a liquid …
- In the personal financial planning process, which step comes immediately after gathering the client's data and goals and analysing the clien…
- In the personal financial planning process, which step comes immediately after gathering the client's data and defining the client's goals?