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

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

1 / 50

1. What does SEBI stand for?

A. Securities and Equity Board of India

B. Securities and Economic Bureau of India

C. Securities and Exchange Bureau of India

D. Securities and Exchange Board of India

2 / 50

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

A. Goods and Services Tax (GST)

B. Customs Duty

C. Income Tax

D. Excise Duty

3 / 50

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

A. It can be eliminated through diversification

B. It is specific to individual assets

C. It affects the entire market

D. It has no impact on equity markets

4 / 50

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

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

B. Management of personal debt

C. Tax saving on salary income

D. Buying real estate for investment purposes

5 / 50

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

A. Equity Funds

B. Hybrid Funds

C. Liquid Funds

D. Debt Funds

6 / 50

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

A. Price-to-Earnings Ratio

B. Sharpe Ratio

C. Current Ratio

D. Dividend Yield

7 / 50

7. 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. G-Sec (Government Security)

C. Certificate of Deposit

D. Commercial Paper

8 / 50

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

A. Mutual Fund

B. Savings Account

C. Fixed Deposit

D. Futures Contract

9 / 50

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

A. 5 years

B. 1 year

C. 7 years

D. 3 years

10 / 50

10. What does "liquidity risk" refer to?

A. The risk of fluctuating interest rates

B. The risk of capital loss due to inflation

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

D. The risk that an investment will not generate returns

11 / 50

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

A. Income from fixed deposits

B. Interest on Public Provident Fund (PPF)

C. Agricultural Income

D. Dividend Income from Equity Mutual Funds

12 / 50

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

A. Maximizing returns

B. None of the above

C. Reducing overall risk

D. Increasing liquidity

13 / 50

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

A. Balance Sheet

B. Cash Flow Statement

C. Asset Allocation Statement

D. Profit and Loss Statement

14 / 50

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

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

B. Market trading on behalf of the client

C. Providing legal advice on all matters

D. Acting as a mutual fund distributor

15 / 50

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

A. Guaranteed returns

B. Diversification

C. Liquidity

D. Professional management

16 / 50

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

A. To invest in stocks

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

C. To save for retirement

D. To create a fixed income stream for retirement

17 / 50

17. 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

18 / 50

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

A. Broker

B. Fiduciary

C. Agent

D. Trader

19 / 50

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

A. Liquid Fund

B. Exchange-Traded Fund (ETF)

C. Index Fund

D. Large Cap Mutual Fund

20 / 50

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

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

B. They are issued only by private companies

C. They offer high liquidity

D. They can be traded on stock exchanges daily

21 / 50

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

A. Corporate Bonds

B. Real Estate Property

C. Stock Certificates

D. Mutual Fund Units

22 / 50

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

A. Investing only in equity

B. Diversifying across multiple issuers

C. Investing only in long-term bonds

D. Holding all investments in one company

23 / 50

23. 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

24 / 50

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

A. Financial goals

B. Investment time horizon

C. Risk tolerance

D. All of the above

25 / 50

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

A. Fixed Deposits

B. Equity Shares

C. Bonds

D. Debt Mutual Funds

26 / 50

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

A. Tax bracket analysis

B. Financial goals assessment

C. Historical market data

D. A detailed risk profiling questionnaire

27 / 50

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

A. To maintain a balance between equity and debt investments

B. To invest in real estate

C. To invest only in debt instruments

D. To invest only in equities

28 / 50

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

A. Corporate Bonds

B. Debentures

C. Government Securities

D. Equity Shares

29 / 50

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

A. The tax implications of investments

B. The client’s preference for investing in equity

C. The client's emotional ability to take risks

D. The client’s financial ability to absorb losses

30 / 50

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

A. ETFs guarantee a fixed return on investment

B. ETFs trade like stocks on an exchange

C. ETFs generally have lower expense ratios than mutual funds

D. ETFs have intraday liquidity

31 / 50

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

A. Equity Shares

B. Fixed Deposits

C. Corporate Bonds

D. Debt Mutual Funds

32 / 50

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

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

B. The type of assets a client should invest in

C. The regulatory requirements applicable to a client

D. The amount of tax a client will pay

33 / 50

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

A. Purchasing real estate

B. Investing in equities

C. Ensuring sufficient savings for post-retirement years

D. Building an emergency fund

34 / 50

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

A. Balanced Fund

B. Equity Fund

C. Debt Fund

D. Sector Fund

35 / 50

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

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

B. It has no effect on debt mutual funds

C. It is a type of unsystematic risk

D. It primarily affects equity investments

36 / 50

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

A. Callable Bond

B. Zero-Coupon Bond

C. Convertible Bond

D. Perpetual Bond

37 / 50

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

A. Diversification helps reduce unsystematic risk

B. Diversification eliminates all types of risk

C. Diversification guarantees higher returns

D. Diversification reduces regulatory risk

38 / 50

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

A. The percentage of total assets invested in equities

B. The annual returns generated by the fund

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

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

39 / 50

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

A. Fixed Deposits

B. Public Provident Fund (PPF)

C. Government Bonds

D. Index Funds

40 / 50

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

A. Rebalancing

B. Averaging

C. Compounding

D. Hedging

41 / 50

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

A. Gold

B. Liquid Mutual Funds

C. Government Bonds

D. Real Estate

42 / 50

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

A. Dynamic Bond Fund

B. Sector Fund

C. Gilt Fund

D. Credit Risk Fund

43 / 50

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

A. 3 years

B. 6 months

C. 1 year

D. 5 years

44 / 50

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

A. Corporate Bonds

B. Fixed Deposit

C. Treasury Bills

D. Equity-Linked Savings Scheme (ELSS)

45 / 50

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

A. Investing in a single asset class

B. Minimizing investment in risky assets

C. Dividing investments among different asset classes

D. Investing only in government securities

46 / 50

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

A. ₹1,50,000

B. ₹1,00,000

C. ₹2,00,000

D. ₹2,50,000

47 / 50

47. 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 24

C. Section 80C

D. Section 80TTA

48 / 50

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

A. AMFI

B. SEBI

C. IRDA

D. RBI

49 / 50

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

A. A fixed-term deposit in banks

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

C. An insurance policy with fixed returns

D. Periodic investment of a fixed amount in mutual funds

50 / 50

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

A. It refers to the volatility in bond prices

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

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

D. It refers to the default risk in corporate bonds

Your score is

The average score is 72%

Next Set … Coming Soon

NISM Series V-A Mock Test | NISM Series XXI-A PMS Mock Test |

For the latest and accurate information, please visit the NISM website at https://certifications.nism.ac.in/nismaol/.