n NISM Certifications
XXI NISM Series XXI-A
Medium

The value of a client's portfolio today is Rs. 50 lakhs. The desired value is Rs. 60 lakhs, and the maximum leverage allowed is 1.5. What is the maximum amount that can be invested in risky assets?

Practice question from NISM XXI A for PMS - Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Rs. 10 lakhs

  2. B

    Rs. 20 lakhs

  3. C

    Rs. 5 lakhs

  4. Rs. 15 lakhs

    Correct answer

Why this is the answer

Investments in risky assets = Multiplier × (Target portfolio value - Current portfolio value) = 1.5 × (60 - 50) = Rs. 15 lakhs.

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