[Money and Markets] The Smart Investor Quiz

1: Your wealth has doubled from Rs. 1 lakh to 2 lakh. What is the % fall when it drops back to 1 lakh?

2: Continuing with the above example, what’s the rate of return so far on your investment.

3: Nifty price index has gone from approx. 12,000 points to 24,000 points in the last 4 years. What’s the CAGR or compounded average rate of return?

4: With the same rate of return as above, how much time is Nifty likely to take to go from 24000 points to 48000 points?

5: Today, If I have Rs. 2 crore and I retire. I will have no more income and this portfolio will need to take care of my expenses. My expense is Rs. 10 lakhs a year. How long will the portfolio be able to fund my expenses?

6: In the same case as above, let’s say I am 45 age now and I want to plan my expenses till age 90. What approx. withdrawal rate should I use to let the portfolio last that long?

7: What is the asset allocation indicator telling you – Buy, Sell or Invest More in Equities?

8: If your portfolio is worth Rs. 1.5 crores today and it returns 18% on an average every year, in how many years will it become 24 crores?

9: If the same portfolio returns only 12% on an average every year, how many years will it take to reach 24 crores?

10: If you are spending Rs. 1 lakh per month today and prices are rising at 12% average per year, in how many years will this 1 lakh worth of expense become Rs. 2 lakhs per month.