NISM SERIES X-A: INVESTMENT ADVISER - (LEVEL 1)

1. Which of the following is a financial goal?

a) Rs.6 lakhs required for sister’s wedding c) Rs. 10 lakhs needed for purchasing a flat
b) A sizable sum needed to buy a new car in d) Rs.5 lakhs needed after two years to pay
two years time child’s tuition fees

2. Mr. Khanna requires Rs.10 lakhs in six months time to pay his son’s admission fees. An appropriate
investment to set aside money for his goal would be
a) Equity shares of high-growth companies c) Short term debt fund
b) Real estate d) Long term corporate bond

3. Jaya needs Rs.5 lakhs urgently for an emergency medical procedure. Which investment is she most likely to
tap?
a) Shares of Hindalco Ltd c) Gold jewellery
b) Bank deposit d) 5-year bonds of a finance company

4. A conservative investor wants to accumulate Rs.20 lakhs in 3 years time. What would be an appropriate
investment option for him?
a) Shares of selected growth companies c) Property
b) Bank deposits and good quality bonds d) Gold funds

5. Investment A appreciates in value by 20% after one year. Investment B appreciates by 40% after three years.
Which gives a higher return?
a) Investment B, because it has a higher absolute return
b) Investment A, because it can be exited after just one year
c) Investment B, because it has a higher holding period
d) Investment A, because it has a higher annualized return

6. The concept of time value of money implies that

a) Money should be invested immediately without wasting time
b) Due to inflation, money has a lower purchasing value in future
c) The timing of investment influences final returns
d) Current cash inflows can be re-invested to earn a return that increases future value

7. An investor in mutual funds typically enters the fund at a certain value, and exits at another value after a
specified holding period. The appropriate measure to assess his return is
a) Absolute return c) Holding Period Return
b) Annualized return d) IRR

8. An investment in 7% tax free bonds is compared with an investment in a 9% bank deposit where interest is
taxable. Both have a one year investment horizon. Which of the following is true?
a) The bond interest is tax free so it is better
b) For an investor who is not taxable, the bank deposit offers a better return
c) For an investor with a 30% tax rate, the bank deposit gives higher post tax return
d) For an investor with a 10% tax rate, the bank deposit gives lower post-tax return

9. A retired person is depending on a monthly annuity income to finance his expenses. The greatest risk faced
by his cash flows is
a) Business risk c) Interest rate risk
b) Exchange rate risk d) Inflation risk
10. Investment in a government security issued at a fixed interest rate is subject to
a) Credit risk c) Interest rate risk
b) Business risk d) Liquidity risk

11. An investor purchases equity shares of a cement manufacturing company. The returns from his investment
do not face
a) Interest rate risk b) Credit risk
This study source was downloaded by 100000764701401 from CourseHero.com on 03-23-2023 20:07:19 GMT -05:00

https://www.coursehero.com/file/109185237/343204984-NISM-SERIES-X-A-Site-Model-Paperdocx/
 c) Business risk d) Inflation risk

12. An investor holds a large portfolio of shares from different companies and industries. Her portfolio is likely
to be protected from
a) Credit risk c) Liquidity risk
b) Inflation risk d) Unsystematic risk

13. Interest on a NSC

a) Is paid out annually c) Is accumulated and paid at the end of the
b) Is compounded and paid out quarterly term

14. Which of the following instruments under Section 80C enjoys an EEE status?
a) ELSS b) PPF c) SCSS

15. FMPs achieve lower mark-to-market risk by investing in

a) shorter term securities that mature before the tenor of the fund
b) floating rate securities with reset tenor less than six months
c) securities whose maturity matches that of the fund

16. Short term debt funds carry

a) High mark to market risk b) Low mark-to-market risk c) No mark-to-market risk

17. Which of these asset classes is most likely to meet the objective of generating regular income?
a) Equity b) Cash and equivalents c) Debt

18. Which of these asset classes is primarily used to meet regular needs for liquid cash?
a) Debt b) Cash and equivalents c) Equity

19. The long term goal of an investor is to build a corpus that is adequate to serve his income needs after
retirement. The portfolio when constructed, should have a higher allocation to
a) Debt b) Cash equivalents c) Equity

20. An investor who seeks a high level of return and is willing to bear the risks of such investments is likely to
be recommended
a) Aggressive portfolio b) Conservative portfolio c) Moderate portfolio

21. Which of the following products is a pure insurance product?

ULIP
a) Money back policy b) Term insurance policy c) Whole life policy

22. In which of the following situations will the insured not have insurance cover?
a) Surrendered policy c) Term policy
b) Paid-up policy d) Both (a) and (b)
23. The premium payable on a ULIP is higher for the same sum assured as a term policy because
The period of cover is shorter
a) A portion of the premium is used for investment
b) The pool of insured is smaller c) The risk is higher

24. The term of insurance in non-life insurance is typically

a) Decided by the insured c) One year
b) Decided based on sum insured d) Flexible

25. Growth-oriented investments are suitable for which stage of retirement savings?
a) Accumulation stage c) Income stage
b) Distribution stage d) Investment stage

26. Inflation does which of the following to retirement planning?

This study source was downloaded by 100000764701401 from CourseHero.com on 03-23-2023 20:07:19 GMT -05:00

https://www.coursehero.com/file/109185237/343204984-NISM-SERIES-X-A-Site-Model-Paperdocx/
 a) Reduces the periodic savings required c) Increases the retirement corpus required
b) Reduces the return generated by an d) Increases the value of the corpus created
investment

27. The retirement corpus may require review

a) Every year c) Closer to the distribution period
b) Every time there is a significant change in d) Not at all
financial situation

28. Which of the following is a solution to manage inadequacy of retirement corpus closer to retirement?
a) Invest in riskier assets c) Reduce periodic savings
b) Postpone retirement d) Increase corpus target

29. Commission received from business forms part of income from ___________.
a) Business and profession c) Salary
b) Capital Gains d) Other sources

30. Long term capital gain from sale of shares is ____________________.

a) Taxed at 10% c) Taxed at 20%
b) Exempt from tax d) Taxed at 15% with indexation

31. The Rajiv Gandhi Equity Savings Scheme, 2012 allows exemption up to _______ for investments made in
eligible securities up to Rs. 50,000.
a) 100% b) 50% c) 40% d) 60%

32. For a person to be qualified as a NRI, he must have stayed outside India for a minimum period of _____
days in a previous financial year.
a) 365 b) 280 c) 182 d) 150

33. Which of the following persons is expected to comply with registration requirement under SEBI
(Investment Advisers) Regulations, 2013:
a) Fund Manager of an AMC
b) A distributor of a mutual fund who only receives commission from the AMC.
c) An IFA who charges advisory fees to investors
d) A Chartered Accountant practicing his profession

34. The minimum tangible assets to be maintained by an individual investment adviser are Rs. _______.
a) 1 lac b) 25 lacs c) 5 lacs d) 10 lacs

35. Registration and regulation of securities market intermediaries is the function of _____.
a) AMFI b) SEBI c) PFRDA d) SRO

36. A person who has a complaint against an insurance company must lodge his complaint with___.
a) SCORES
b) IGMS
c) CGMS
d) RBI

This study source was downloaded by 100000764701401 from CourseHero.com on 03-23-2023 20:07:19 GMT -05:00

https://www.coursehero.com/file/109185237/343204984-NISM-SERIES-X-A-Site-Model-Paperdocx/
Powered by TCPDF (www.tcpdf.org)