NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Evaluating the Financial Position of Clients
Mr. Arjun Menon earns Rs 1,50,000 gross monthly, takes home Rs 1,20,000, and saves Rs 30,000 monthly, of which Rs 12,000 goes to an EPF contribution deducted before take-home pay is computed. His EMI is Rs 36,000. His adviser wants the savings ratio on gross income and the EMI-to-take-home ratio. Which pair is correct, treating the Rs 30,000 as total savings including EPF?
The correct pair is 20% and 30%. Savings of Rs 30,000 over gross income of Rs 1,50,000 is 20 percent, while the EMI of Rs 36,000 over take-home pay of Rs 1,20,000 is 30 percent. Other options use the wrong income base.
- A25% and 30%
- B20% and 30%Correct
- C20% and 24%
- D25% and 24%
Explanation
Savings ratio on gross = 30,000 / 1,50,000 = 20%. EMI ratio on take-home = 36,000 / 1,20,000 = 30%. Dividing savings by take-home gives 25%, and dividing EMI by gross gives 24%, both wrong bases.
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