NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Evaluating the Financial Position of Clients
Rohit Nair earns a gross monthly income of Rs 1,00,000. His total monthly EMIs are Rs 30,000 (home loan Rs 22,000 and car loan Rs 8,000). What is his debt service ratio (EMIs to gross monthly income)?
The debt service ratio is 30 percent. Total EMIs of Rs 30,000 (22,000 plus 8,000) divided by gross monthly income of Rs 1,00,000 gives 0.30. Using only the home loan would understate the ratio.
- A22%
- B8%
- C30%Correct
- D70%
Explanation
Debt service ratio = total EMIs / gross income = 30,000 / 1,00,000 = 30%. Taking only the home loan gives 22% (missed car loan), and 70% is the remainder of income after EMIs, not the ratio.
Did you get it right without looking?
One question tells you little. A timed set on Evaluating the Financial Position of Clients shows your real accuracy, how long you take and where you lose marks.
More Evaluating the Financial Position of Clients questions
- 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 cont…
- Meera has monthly take-home income of Rs 80,000. Her monthly EMIs are: home loan Rs 22,000, car loan Rs 8,000 and personal loan Rs 6,000. Wh…
- Sunita, 40, has a net worth of Rs 90 lakh, of which Rs 30 lakh is a self-occupied house. She has total assets of Rs 1.2 crore, annual gross …
- Rohan earns a gross monthly income of Rs 1,00,000 and pays EMIs totalling Rs 35,000 per month on a home loan and a car loan. What is his deb…
- Caselet: Arjun Nair, 35, plans to retire in 20 years. He wants a corpus of Rs 1,61,05,100 at retirement and can invest at 10% p.a. compounde…
- Which of the following is generally treated as a discretionary expense when preparing a client's cash flow statement?