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

1. Which of the following is a financial goal?

a) Rs.6 lakhs required for sisters c) Rs. 10 lakhs needed for
wedding purchasing a flat
b) A sizable sum needed to buy a d) Rs.5 lakhs needed after two years
new car in two years time to pay childs tuition fees
e)
f) 2. Mr. Khanna requires Rs.10 lakhs in six months time to pay his sons admission
fees. An appropriate investment to set aside money for his goal would be
a) Equity shares of high-growth c) Short term debt fund
companies d) Long term corporate bond
b) Real estate
e)
f) 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 d) 5-year bonds of a finance
b) Bank deposit company
c) Gold jewellery
e)
f) 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 c) Property
companies d) Gold funds
b) Bank deposits and good quality
bonds
e)
f) 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
g)
h) 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
i)
j) 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
e)
f) 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
g)
h) 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
e) 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
e)
f) 11. An investor purchases equity shares of a cement manufacturing company. The
returns from his investment do not face
a) Interest rate risk c) Business risk
b) Credit risk d) Inflation risk
e)
f) 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
e)
f) 13. Interest on a NSC
a) Is paid out annually c) Is accumulated and paid at the
b) Is compounded and paid out end of the term
quarterly
d)
e) 14. Which of the following instruments under Section 80C enjoys an EEE status?
a) ELSS b) PPF c) SCSS
d)
e) 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
f)
g) 16. Short term debt funds carry
a) High mark to market b) Low mark-to-market c) No mark-to-market
risk risk risk
d)
e) 17. Which of these asset classes is most likely to meet the objective of generating
regular income?
a) Equity b) Cash and c) Debt
equivalents
d)
e) 18. Which of these asset classes is primarily used to meet regular needs for liquid
cash?
a) Debt b) Cash and c) Equity
equivalents
d)
e) 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
d)
e) 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 b) Conservative c) Moderate portfolio
portfolio portfolio
d)
e) 21. Which of the following products is a pure insurance product?
f) ULIP
a) Money back policy b) Term insurance c) Whole life policy
policy
d)
e) 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)
e) 23. The premium payable on a ULIP is higher for the same sum assured as a term
policy because
f) 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
d)
e) 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
e)
f) 25. Growth-oriented investments are suitable for which stage of retirement
savings?
a) Accumulation stage c) Income stage
b) Distribution stage d) Investment stage
e)
f) 26. Inflation does which of the following to retirement planning?
a) Reduces the periodic savings c) Increases the retirement corpus
required required
b) Reduces the return generated by d) Increases the value of the corpus
an investment created
e)
f) 27. The retirement corpus may require review
a) Every year c) Closer to the distribution period
b) Every time there is a significant d) Not at all
change in financial situation
e)
f) 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
e)
f) 29. Commission received from business forms part of income from ___________.
a) Business and profession c) Salary
b) Capital Gains d) Other sources
e)
f) 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
e)
f) 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%
e)
f) 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
e)
f) 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
g)
h) 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
e)
f) 35. Registration and regulation of securities market intermediaries is the function
of _____.
a) AMFI b) SEBI c) PFRDA d) SRO
e)
f) 36. A person who has a complaint against an insurance company must lodge his
complaint with___.
a) SCORES b) IGMS d) RBI b)
c) CGMS a)