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NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Evaluating the Financial Position of Clients

Mr. Vikram Shah has total assets of Rs 80 lakh, of which financial assets are Rs 30 lakh, and total liabilities of Rs 20 lakh. His annual savings are Rs 3 lakh and annual gross income is Rs 15 lakh. What is his net worth, and what is his savings ratio?

Net worth is Rs 60 lakh and savings ratio is 20%. Net worth equals total assets of Rs 80 lakh less liabilities of Rs 20 lakh, and the savings ratio is annual savings of Rs 3 lakh divided by gross income of Rs 15 lakh.

  1. ANet worth Rs 50 lakh; savings ratio 20%
  2. BNet worth Rs 60 lakh; savings ratio 20%Correct
  3. CNet worth Rs 60 lakh; savings ratio 10%
  4. DNet worth Rs 10 lakh; savings ratio 20%

Explanation

Net worth = total assets minus liabilities = 80 - 20 = Rs 60 lakh. Savings ratio = 3 / 15 = 20%. Using financial assets only (30 - 20) gives Rs 10 lakh, which wrongly excludes other assets; Rs 50 lakh is not derived from the data.

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