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NISM-Series-XXI -A: Portfolio Management (PMS) Mock Test - Demo

Q 1. Identify the TRUE statement with respect to the 'Psychographic Analysis' of investors? A. As per Bailard, Biehl and
Kaiser (BB&K) model, an investor broadly belongs to one of the five types of investor categories B. Due to extraneous
factors, an investor can sometime display behaviours other than his normal type
Only A is true
Only B is true
Both A and B are true
Neither A nor B is true
Q 2. The investment objective of Mr. Sundar is to have a regular income. He approaches a PMS firm for this purpose.
Among the given four choices, which will be the preferred choice of the portfolio manager?
New IPO's
Dividend paying equity shares
Zero coupon bonds
Small and Mid cap equity shares
Q 3. An investor has deposited Rs 50 lakhs with a fund manager. Out of this, only Rs. 35 lakhs was invested and this
earned Rs. 3,40,000. How much return did the investor effectively earn?
9.71%
8.33%
6.8%
5.7%
Q 4. Mr. Suresh wants to invest in long term corporate bonds as they are giving higher returns. However his portfolio
manager is of a strong belief that inflation and interest rates will be on a rise for the next 2-3 years. Which of these
is/are valid arguments to convince Mr. Suresh not to invest in long term corporate bonds?
Due to rising inflation, the profitability of corporates may be negatively affected leading to corporate default
The bond prices and market interest rates are inversely related
Both of the above
None of the above
Q 5. Mr. Mehta's initial contribution is Rs. 2 crores which then rises to Rs. 2 crores 30 lakhs in the first year. Therefore, a
performance fee will be payable on Rs. 30 lakhs. Is this statement True or False?
True
False
Q 6. __________ is the entity which holds the funds and securities of large clients such as banks.
Portfolio Manager
Custodian
Depository
Fund Manager
Q 7. A PMS firm has suddenly found that there is a shortage of working capital funds. From the options given below, which
will be most acceptable?
The PMS firm should borrow for short term from a commercial bank by pledging the securities of the client
The PMS firm should use the common pool of client’s funds in a scheduled commercial bank
The PMS firm should charge the client under PMS fees and reduce the distributions to be made to the client
The PMS firm should borrow from a commercial bank for short term
Q 8. The SEBI Fraudulent and Unfair Trade Practices Regulations prohibit a person to, directly or indirectly _________
securities in a fraudulent manner.
Buy
Sell
Deal
All of the above
Q 9. If there is an uncertainty with respect to the future payment, the investor would require return more than the nominal
required rate of return. The additional component is called ________.
Alpha
Risk free rate of return
Risk premium
Both Alpha and Risk free rate of return
Q Offer for sale (OFS) is method of share sale for ________ .
10.
listed companies
unlisted companies
startups
All of the above
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