NISM Series X-A - TheMFCentral

NISM Series X-A (Investment Adviser Level 1): Mock Test

Mock Test: Focus on multiple-choice questions (MCQs) covering concepts, regulations, and case studies. Use mock tests for time management and reinforcing weaker areas, reviewing common question patterns.

NISM Series X-A: Mock Test 1

NISM Series X-A (Investment Advisor Level-1): Mock Test 1

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1. What does risk profiling help determine in investment advisory?

A. The amount of tax a client will pay

B. The type of assets a client should invest in

C. The client’s ability and willingness to take risks

D. The regulatory requirements applicable to a client

2 / 50

2. Which of the following is true regarding "inflation risk"?

A. It refers to the risk of capital loss in equities

B. It refers to the default risk in corporate bonds

C. It refers to the volatility in bond prices

D. It refers to the risk that inflation will reduce purchasing power

3 / 50

3. Which ratio is used to assess the risk-adjusted return of a mutual fund?

A. Sharpe Ratio

B. Current Ratio

C. Dividend Yield

D. Price-to-Earnings Ratio

4 / 50

4. What does SEBI stand for?

A. Securities and Exchange Board of India

B. Securities and Exchange Bureau of India

C. Securities and Economic Bureau of India

D. Securities and Equity Board of India

5 / 50

5. Which of the following is not considered a fixed-income security?

A. Equity Shares

B. Debentures

C. Government Securities

D. Corporate Bonds

6 / 50

6. Which type of mutual fund is best suited for short-term investment goals?

A. Liquid Funds

B. Debt Funds

C. Equity Funds

D. Hybrid Funds

7 / 50

7. The process of balancing the risk-reward profile of a portfolio by periodically adjusting the weight of asset classes is known as:

A. Compounding

B. Rebalancing

C. Averaging

D. Hedging

8 / 50

8. Which of the following is a goal of "estate planning"?

A. Management of personal debt

B. Tax saving on salary income

C. Transfer of wealth to heirs in a tax-efficient manner

D. Buying real estate for investment purposes

9 / 50

9. What does the term "systematic investment plan" (SIP) refer to?

A. An insurance policy with fixed returns

B. Periodic investment of a fixed amount in mutual funds

C. A fixed-term deposit in banks

D. A method of withdrawing funds periodically from a mutual fund

10 / 50

10. What does a client’s "risk capacity" indicate?

A. The client's emotional ability to take risks

B. The tax implications of investments

C. The client’s preference for investing in equity

D. The client’s financial ability to absorb losses

11 / 50

11. Which of the following is NOT a benefit of investing in mutual funds?

A. Professional management

B. Guaranteed returns

C. Liquidity

D. Diversification

12 / 50

12. Which of the following is an example of an actively managed fund?

A. Exchange-Traded Fund (ETF)

B. Liquid Fund

C. Large Cap Mutual Fund

D. Index Fund

13 / 50

13. Which of the following is considered a "real asset"?

A. Stock Certificates

B. Corporate Bonds

C. Mutual Fund Units

D. Real Estate Property

14 / 50

14. Which of the following is a key role of an Investment Adviser?

A. Providing legal advice on all matters

B. Market trading on behalf of the client

C. Acting as a mutual fund distributor

D. Offering personalized financial advice based on client’s risk profile

15 / 50

15. Which financial ratio is used to measure the ability of a company to meet its short-term obligations?

A. Current Ratio

B. Return on Equity (ROE)

C. Price-to-Earnings Ratio (P/E)

D. Debt-to-Equity Ratio

16 / 50

16. Which type of mutual fund primarily invests in debt instruments?

A. Equity Fund

B. Balanced Fund

C. Debt Fund

D. Sector Fund

17 / 50

17. Which of the following entities regulates the mutual fund industry in India?

A. AMFI

B. IRDA

C. SEBI

D. RBI

18 / 50

18. A client’s risk tolerance is assessed using which of the following methods?

A. Financial goals assessment

B. A detailed risk profiling questionnaire

C. Historical market data

D. Tax bracket analysis

19 / 50

19. What is the primary objective of diversification in a portfolio?

A. None of the above

B. Reducing overall risk

C. Maximizing returns

D. Increasing liquidity

20 / 50

20. What does the term "alpha" refer to in portfolio performance evaluation?

A. The difference between expected and actual returns

B. The excess return of a portfolio over its benchmark

C. The return on the portfolio compared to the market

D. A measure of portfolio volatility

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21. Under which section of the Income Tax Act is interest earned on savings bank accounts exempt up to ₹10,000?

A. Section 87A

B. Section 80TTA

C. Section 80C

D. Section 24

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22. Which of the following is NOT a feature of Exchange-Traded Funds (ETFs)?

A. ETFs trade like stocks on an exchange

B. ETFs have intraday liquidity

C. ETFs guarantee a fixed return on investment

D. ETFs generally have lower expense ratios than mutual funds

23 / 50

23. Which of the following statements is true about diversification?

A. Diversification reduces regulatory risk

B. Diversification helps reduce unsystematic risk

C. Diversification eliminates all types of risk

D. Diversification guarantees higher returns

24 / 50

24. An individual seeking regular income with low risk should consider investing in:

A. Fixed Deposits

B. Equity Shares

C. Debt Mutual Funds

D. Corporate Bonds

25 / 50

25. What is a key feature of "tax-free bonds"?

A. They offer high liquidity

B. They can be traded on stock exchanges daily

C. They are issued only by private companies

D. The interest income from the bonds is exempt from tax

26 / 50

26. Which of the following is considered a "direct tax"?

A. Excise Duty

B. Customs Duty

C. Goods and Services Tax (GST)

D. Income Tax

27 / 50

27. Which of the following is an example of a derivative product?

A. Futures Contract

B. Mutual Fund

C. Savings Account

D. Fixed Deposit

28 / 50

28. In which of the following scenarios would a "term insurance policy" be most appropriate?

A. To invest in stocks

B. To save for retirement

C. To create a fixed income stream for retirement

D. To provide financial security to dependents in case of the policyholder's death

29 / 50

29. Which of the following is an example of an equity-related product?

A. Index Funds

B. Fixed Deposits

C. Government Bonds

D. Public Provident Fund (PPF)

30 / 50

30. Under SEBI guidelines, an Investment Adviser must act in which capacity?

A. Agent

B. Broker

C. Trader

D. Fiduciary

31 / 50

31. A bond issued at a discount and redeemed at face value is called:

A. Convertible Bond

B. Perpetual Bond

C. Zero-Coupon Bond

D. Callable Bond

32 / 50

32. Which financial statement summarizes a company’s revenues and expenses over a period of time?

A. Cash Flow Statement

B. Asset Allocation Statement

C. Profit and Loss Statement

D. Balance Sheet

33 / 50

33. What does "liquidity risk" refer to?

A. The risk of fluctuating interest rates

B. The risk that an asset cannot be sold quickly without incurring a loss

C. The risk that an investment will not generate returns

D. The risk of capital loss due to inflation

34 / 50

34. Which of the following is NOT a tax-free income in India?

A. Dividend Income from Equity Mutual Funds

B. Agricultural Income

C. Income from fixed deposits

D. Interest on Public Provident Fund (PPF)

35 / 50

35. Which of the following investment products offers tax benefits under Section 80C of the Income Tax Act?

A. Fixed Deposit

B. Equity-Linked Savings Scheme (ELSS)

C. Corporate Bonds

D. Treasury Bills

36 / 50

36. Which of the following is considered a high-risk, high-return investment?

A. Fixed Deposits

B. Debt Mutual Funds

C. Bonds

D. Equity Shares

37 / 50

37. A client’s total asset allocation should consider which of the following factors?

A. Financial goals

B. All of the above

C. Investment time horizon

D. Risk tolerance

38 / 50

38. What is the primary objective of a "balanced mutual fund"?

A. To maintain a balance between equity and debt investments

B. To invest only in debt instruments

C. To invest in real estate

D. To invest only in equities

39 / 50

39. Which of the following is true about "interest rate risk"?

A. It is a type of unsystematic risk

B. It refers to the risk that bond prices will fall when interest rates rise

C. It has no effect on debt mutual funds

D. It primarily affects equity investments

40 / 50

40. What is the minimum validity period of a financial plan recommended by SEBI?

A. 5 years

B. 6 months

C. 3 years

D. 1 year

41 / 50

41. Which of the following is an example of an illiquid asset?

A. Real Estate

B. Liquid Mutual Funds

C. Government Bonds

D. Gold

42 / 50

42. . What is the primary goal of retirement planning?

A. Ensuring sufficient savings for post-retirement years

B. Purchasing real estate

C. Building an emergency fund

D. Investing in equities

43 / 50

43. Which of the following can help reduce credit risk in a bond portfolio?

A. Holding all investments in one company

B. Investing only in long-term bonds

C. Diversifying across multiple issuers

D. Investing only in equity

44 / 50

44. Which of the following is not a category of debt mutual funds?

A. Sector Fund

B. Dynamic Bond Fund

C. Gilt Fund

D. Credit Risk Fund

45 / 50

45. Which of the following is true regarding systematic risk?

A. It has no impact on equity markets

B. It affects the entire market

C. It can be eliminated through diversification

D. It is specific to individual assets

46 / 50

46. What is the lock-in period for an Equity-Linked Savings Scheme (ELSS)?

A. 7 years

B. 1 year

C. 5 years

D. 3 years

47 / 50

47. The concept of 'asset allocation' refers to:

A. Investing in a single asset class

B. Dividing investments among different asset classes

C. Investing only in government securities

D. Minimizing investment in risky assets

48 / 50

48. The maximum tax deduction available under Section 80C is:

A. ₹1,00,000

B. ₹2,00,000

C. ₹2,50,000

D. ₹1,50,000

49 / 50

49. The "expense ratio" in a mutual fund refers to:

A. The total sales charges applicable on the purchase of units

B. The annual fee charged by the fund for managing the portfolio

C. The annual returns generated by the fund

D. The percentage of total assets invested in equities

50 / 50

50. Which of the following instruments is issued by the Government of India and has a maturity of more than one year?

A. Treasury Bill

B. Certificate of Deposit

C. G-Sec (Government Security)

D. Commercial Paper

Your score is

The average score is 72%

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