n NISM Certifications
X NISM Series X
Medium

What is a drawback of the Expense Protection Method for estimating retirement expenses?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Difficult to estimate investment returns accurately

  2. Overlooks possible future expenses

    Correct answer

  3. C

    Expenses may be overestimated

  4. D

    Difficult to estimate current income

Why this is the answer

This method may miss or underestimate future expenses, especially if certain items are overlooked, leading to under-preparedness.

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