NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. Financial markets enable economic growth by

a. Creating demand and supply for goods and services
b. Providing access to funds for productive enterprise
c. Enabling appreciation in the price of securities
d. None of the above

2. Which of the following markets is directly influenced by the policies of the RBI?
a. Forex markets
b. Commodities markets
c. Insurance market
d. Pension market

3. The terms on which a security is issued is primarily decided by

a. Regulators
b. Government
c. Investors
d. Issuers

4. The market for trading in securities already issued is called

a. Future market
b. Follow on market
c. Secondary market
d. Forward market

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. An unlisted company cannot make a public issue of debentures. State whether True or
False.
a. True
b. False

2. An investor bids Rs.45 in a book built public issue where the cut-off is discovered as
Rs.50.
a. The investor will get full allotment of shares.
b. The investor will get proportionate allotment based on over subscription of shares.
c. The investor will be allotted shares at Rs.50.
d. The investor will not get an allotment of shares.

3. Payment for a public issue can be made through which of the following modes after
Jan1, 2016?
a. Cash
b. ASBA
c. Local cheque
d. All of the above

4. The share capital of a company will NOT increase when there is a

a. Fresh issue of shares
b. Offer for sale
c. Private placement
d. Preferential allotment

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. The asset class in which a fund will invest will be defined by

a. The risk profile of the fund
b. The return requirements of the investor
c. The investment objectives of the fund
d. The investment horizon of the investor

2. The interest rate risk in a debt fund will depend on

a. The tenor of securities
b. The credit quality of the portfolio
c. The coupon of the securities
d. None of the above

3. In a fund of fund the portfolio consists of

a. Debt securities
b. Equity instruments
c. Derivative instruments
d. Units of other schemes

4. The dividend distribution tax applicable for individuals in equity funds

a. Is at 15%
b. Is at 25%
c. Is at 30%
d. Does not apply

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. What is the tax benefit available on the Senior Citizen Savings Scheme?
a. Interest is exempt from tax
b. Investment gives Section 80C benefits
c. Maturity value is exempt from tax
d. All of the above

2. Corporate bonds with high credit rating

a. Have higher coupon
b. Have higher face value
c. Have lower default risk
d. All of the above

3. A call option is likely to be exercised if

a. Market price is higher than strike price
b. Strike price is higher than market price
c. Premium moves down
d. Market moves down

4. Which of the following investment is unlikely to provide inflation-hedged returns?

a. Gold
b. Real estate
c. Commodities
d. Bonds

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. 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
b. Exchange rate risk
c. Interest rate risk
d. Inflation risk

2. Investment in a government security issued at a fixed interest rate is subject to

a. Credit risk
b. Business risk
c. Interest rate risk
d. Liquidity risk

3. An investor purchases equity shares of a Sugar producing company. The returns from
his investment do not face
a. Interest rate risk
b. Operations risk
c. Business risk
d. Market risk

4. An investor holds a large portfolio of shares from different companies and industries.
Her portfolio is likely to be protected from
a. Systematic risk
b. Unsystematic risk

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. 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

2. 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

3. Simple absolute return is an appropriate measure of return for

a. Calculating returns for periods less than one year
b. Comparing returns across time periods
c. Calculating returns where there is only capital appreciation
d. Calculating returns where there is only periodic income

4. Annualization of returns enable

a. Comparison over different investment amounts
b. Comparison over different investment horizons
c. Comparison over different levels of investment risks
d. Comparison over different levels of return

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. Which of the following is a financial goal?

a. Rs.6 lakhs required for sister’s wedding
b. A sizable sum needed to buy a new car in two years’ time
c. Rs. 10 lakhs needed for purchasing a flat
d. Rs.5 lakhs needed after two years to pay 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
b. Real estate
c. Short term debt fund
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 XYZ Ltd.
b. Bank deposit
c. Gold jewellery
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
b. Bank deposits and good quality bonds
c. Property
d. Gold funds

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

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

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

3. The long term goal of a young 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

4. 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

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

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

a. ULIP
b. Money back policy
c. Term insurance policy
d. Whole life policy

2. In which of the following situations will the insured not have insurance cover?
a. Surrendered policy
b. Paid-up policy
c. Term policy
d. Both (a) and (b)

3. The premium payable on a ULIP is higher for the same sum assured as a term policy
because
a. The period of cover is shorter
b. A portion of the premium is used for investment
c. The pool of insured is smaller
d. The risk is higher

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

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

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. Growth-oriented investments are suitable for which stage of retirement savings?

a. Accumulation stage
b. Distribution stage
c. Income stage
d. Investment stage

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

a. Reduces the periodic savings required
b. Reduces the nominal return generated by an investment
c. Increases the retirement corpus required
d. Increases the value of the corpus created

3. The retirement corpus may require review

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

4. Which of the following is a solution to manage inadequacy of retirement corpus closer

to retirement?
a. Invest in riskier assets
b. Postpone retirement
c. Reduce periodic savings
d. Increase corpus target

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. Commission received from business forms part of income from ___________.

a. Business and profession
b. Capital Gains
c. Salary
d. Other sources

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

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

3. For a person to be qualified as a NRI, he must have stayed outside India for more than
_____ days in a previous financial year.
a. 365
b. 280
c. 182
d. 150

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NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination

Sample Questions

1. 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

2. The minimum tangible assets to be maintained by an individual investment adviser are

Rs. _______.
a. 1 lakh
b. 25 lakhs
c. 5 lakhs
d. 10 lakhs

3. Registration and regulation of securities market intermediaries is the function of

_____.
a. AMFI
b. SEBI
c. PFRDA
d. SRO

4. A person who has a complaint against an insurance company must lodge his complaint
with___.
a. SCORES
b. Integrated Grievance Management System (IGMS)
c. Central Grievance Management System (CGMS)
d. RBI

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