Practice Kit - Paper 1: No. Option A Option B Option C Option D Answer

NISM Mock Test 1
PRACTICE KIT PAPER 1

No.
QUESTION
OPTION A
OPTION B
OPTION C
OPTION D
A mutual fund distributor is paid commission for..
First 5 years of Investment done

by investor
First 3 years of Investment done

by investor
First 10 years of investment done by

investor
As long as investor held the

investment
The guideline issued by AMFI for intermediaries are known as...
AGNI
ACE
AMFI
none of above
The investment in MF portfolio are valued at
Face value of portfolio
cost of investment
Market value of portfolio
Book value of portfolio
Exit loads are generally lower for large investors.
TRUE
FALSE
Time stamping arrangement is must at..
Offices of distributors
AMC offices
Bank distributor's branch
Offices declared as point of

acceptance.
SEBI has put a stop on charging ____________ to the scheme.
Exit load
Entry Load
Recurring Expenses
CDSC
Unaudited accounts of the scheme must be published
through monthly fact sheet
Only at AMFI website
Once every six month in one

national & Regional news paper
Only on AMC's website
Capital gain or loss from mutual fund investment are classified as a short
term investment are if sold within
9 months
6 months
12 months
13 months
An investor invested Rs.100000/in a 370 day FMP and got Rs. 107750/-,
what is capital gain in this case?
7750
750
Insufficient details
10% Plus surcharge or 20% after

index benefit
10
Which of the following is true
STT is payable when investor

purchase equity MF

does redemption from equity MF

purchase debt MF
STT is payable when investor sale

debt MF
11
Liquid funds can not charge management fees of funds parked in a short
term bank deposits.
TRUE
FALSE
12
STT is charged on
Equity share trading
Derivatives trading
Equity MF
All of the above
13
Which of the following is not required for KYC norms.
Proof of investment
Proof of Identity
Proof of address
All of the above
14
The information on minimum investment amount, investor's service

centers, and how to make purchase is provided in.
Application form
Nomination Form
KIM
None of the above
15
Which of the following document is not require to be submitted by

charitable trust to invest in MF?
Trust deed
List of authorized signatories
Board resolution and Memorandum

and article of association
certificate of registration
16
SIP is a good investment strategy because..
Investor gets units at a discount to

NAV
It offers benefits of rupee cost

averaging
It helps regular income for investor
No load investment done
17
Relaxation from documentation requirements for micro SIP is available

for..
HUF
Non Individual
NRI
PIO
18
NRI can not make repartition investment in MF using demand draft.
TRUE
FALSE
Page 1
Answer
NISM Mock Test 1

19
An investor plans to invest Rs.12000 in a scheme whose NAV is 12 and

FV is 10, how many units is he likely to be obtained.
<1000
1000
1200
cant say
20
An investor is doing a liquid investment, fund is available and time is

12.30. NAV would be applicable for the ________
Next working day
Same day
Closing NAV of Day immediately

preceding the date of application
Closing NAV of Day immediately

preceding next business day
21
Investor invest 50 lakh in GILT at 3.30 pm with a local cheque. he gets

NAV of
Closing NAV of day fund are

available
Same day
Next business day
Next preceding day.
22
Time stamping needs to start with serial no 1 on every business day.
TRUE
FALSE
23
Funds pay dividend in
Dividend Option
Dividend Re-Investment option
Both of the above
Growth option
24
Offering for repurchase, constant amounts worth of units at regular interval

basis is called
SIP
STP
SWP
Value investment
25
A company's PE ratio may be low because it is unlikely to replicate it's

past performance
TRUE
FALSE
26
Fundamental analysts are called "Chartists"
TRUE
FALSE
27
If absolute return was 2.4% over 50 days, annualized return would

be____________
0.05
0.024
1.2
0.175
28
In case of liquid fund, investment less than 3 months old. which return
would be calculated?
Total return
CAGR
Absolute return
Simple annualized
29
In case of equity fund, if fund has higher allocation to cash in bullish

market the performance is likely to..
Be comparable to that of
benchmark index
Be worse than benchmark return
Better than benchmark return
cant say
30
CRISIL's indicator for highest safety in a debenture is
AAA
High
Good
P1+
31
During the period of turmoil, gold prices
Go down
Go up
Remain steady
Mirror equities
32
Performance of fund must always be measured relative to the.
Index
Benchmark
Asset Class
Investment objective
33
Difference between scheme's actual return and optimal return for it's risk is
Sharpe
Treynor
Alpha
Spread
34
While evaluating return for an index fund across a peer group, which of
the following is more important?
BETA Coefficient
Past performance
Tracking error
R-squared
35
Balance funds are for
Aggressive investors
highly aggressive investor
Moderate conservative
Highly conservative
36
The lower risk among equity fund is
Index Fund
Value Fund
Dividend yield fund
Growth fund
37
Probabilities of losing money in equity is negligible if investment horizon is

for at least
6 months
5 years
1 years
3 years
38
Returns in international fund is dependent on
Exchange rates
Asset class performance
Both of the above
None of the above
Page 2
NISM Mock Test 1

39
Mutual funds in India are not permitted to invest in
Gold
Real estate
Art
Secularized debt
40
A value fund is expected to have ________ exposure to front line stocks
Entire
High
Half of it's
Low
41
Index funds are safer because their NAV does not go down
TRUE
FALSE
42
Which of the followings are least comparable
Liquid and Savings account
Liquid and Current account
ETF and Index fund
GILT and Sector fund
43
An investor seeking capital appreciation, having high risk tolerance and

long term horizon must invest in
Bonds
Bank FD
Real-Estate
PPF
44
Credit rating enables an investors to judge the
Duration of loan
Extent of securities against the

borrowing
Risk of default by borrower
Interest rate risk
45
Which of the following is not government saving scheme?
Infrastructure Bonds
RBI Bonds
POST
KVP
46
An investor looking for capital appreciation, having a high risk tolerance

and long tem horizon must invest in
Bank FD
Equity
Bonds
Gold
47
Which of the followings is physical asset?
Securised debt
Real estate
Real estate fund
Gold future
48
In new pension scheme(NPS) Tier I account new pension scheme is

called pension account
TRUE
FALSE
49
Investor in MF can choose asset class but not investment manager
TRUE
FALSE
50
Financial Planning Involves
Helping client to select the out

performing stock
Assessing the clients financial

information
Advising client to invest only in

secured investments
None of the above
51
Value stocks
Have high current dividend
Yield high growth in earning
Are currently under valued
None of the above
52
A better performance than the return on index is given by
Passive fund manager
An active fund manager
All fund managers
Non fund manager
53
Emerging or new channel for distributors/marketing of mutual funds in

India is
Internet
Stock Exchange
All of the above
None of the above
54
Trail commission means paying
No commission at all
The entire commission upfront
Part of commission up front and

balance in phases
The entire commission after five

years
55
Agents are compensated by mutual funds
Through salaries
Through commission
Through an annual fees
Not in cash but in kind
56
The fund sponsors should have a sound financial track record of
7 years
5 years
12 months
3 years
57
Which of the following are self regulatory organization(SRO)
BSE
SEBI
AMFI
RBI
58
Bank owned mutual fund are supervised by
SEBI
Jointly by SEBI & RBI
RBI
AMFI
Page 3
NISM Mock Test 1

59
A passive fund manager
Researches stocks extensively
Does not buy and sell stocks often
Does not have to go through the

process of stock selection
Does not have to track stocks
60
Debt securities bought at a discount to their face value are generally
Interest bearing
Zero coupon bonds
Paying interest at a floating rate
None of the above
61
When interest rates rise, bond prices
Also rise
Are not affected
Falls
Fluctuate either up or down
62
The maturity period of RBI relief bonds is
5 years
7 years
6 years
8 years
63
A trail commission is justified when
An investor cancels his investment
The investor redeems his

investment in a very short time
An agent invests his own money, not

that of client
An Agent retain the Investment
64
A debt fund distributes 10% dividend . how much tax does the investor
have to pay on this dividend
10.00%
20.00%
12.00%
None
65
What is the current PPF rate
8.00 Percentage
8.50 Percentage
7.75 Percentage
7.50 Percentage
66
What is the recurring expense on first 100 cr for equity schemes
2.00 Percentage
1.75 Percentage
2.25 Percentage
2.50 Percentage
67
Risk adjusted return is measured by
Sharpe ratio
Standard deviation
Treynor ratio
A&C
68
Intra day trading can be done on the basis of-
Fundamental analysis
Technical analysis
Economic analysis
Political analysis
69
Mid cap stocks are risky in the time of
Boom
Recession/Economic turmoil
Political instability
All of the above
70
Who Appoints the AMC
Custodian
R&T
Trustee
Distributors
71
Which of the following has lowest risk
Liquid fund (mmmf)
Gilt funds
Diversified debt fund
Diversified equity fund
72
Long term capital gains in a debt fund without indexation for an investor is
10.00%
15.00%
20.00%
No tax
73
What of the following is not a reason for investor to prefer mutual fund
over Bank FD
Tax benefits
Possibility of capital gain
Deposit insurance
Investment convenience
74
In the NPS each investment manager appoints own distributor
TRUE
FALSE
75
Need of Life insurance in life is
Must
Not required
76
All investor have similar requirements at similar stage in the life/wealth

cycle
TRUE
FALSE
77
Name of asset allocation strategy if it is fixed @ 50 %
Tactical Allocation
Strategic Allocation
78
Model portfolio should be determined based on commission income

possibility for distributor
TRUE
FALSE
Page 4
A
can be done without
None of above
A
B
A&B
None of above
B
B
NISM Mock Test 1

79
Which of the following is true for model portfolio
Stipulated by SEBI
Guaranteed by AMC
Decided by financial planner
Common across industry
80
As the no of earning member in a family increases risk appetite
Increases
Decreases
Stays constant
None of above
81
Equity investment through sip can be suggested for investor looking for
Long term growth
Short term target
Portfolio churning
Tax benefit
82
How to compare index fund
performance
expenses
Tracking error
None of above
83
What type of bond fund carries least interest rate risk
Short term bonds
Long term Bonds
Mid term Bonds
All of above
84
Arbitrage fund are not equity fund
TRUE
FALSE
85
Which of the following is true for FMP
NAV do not fluctuate
Capital Guaranteed
Fixed income
None of above
86
Index funds are_____________fund
Passive fund
Active fund
Both
None of above
87
The role of insurance is more critical for physical assets than financial
assets
TRUE
FALSE
88
When price of gold goes up a buyer of gold future contract see it's value
Go up
Go down
Retain the same value
None of above
89
The investment portfolio is created based on
Market views of fund manager
Investment objective of fund
risk appetite of investor
profile of unit holder
90
Commodities as an asset class does not include
Food crops
Industrial metals
Real Estate
Gold
91
Subsequent to NFO, open ended funds are
open for purchase by existing

investor & new investor
open for purchase only for existing

investor
available on stock market
None of above
92
If a fund seeks to grow in value overtime it can be said that it's investment
objective is
capital appreciation
safety of capital
Capital adequacy
Regular income
93
Hybrid funds are invested in
across equity market capitalization
International markets
both equity and debt
None of above
94
Mutual fund are constituted in India as
Companies
Trusts
Partnerships
NGO
95
Mutual Fund sponsor can be compared to
Depositor of a company
Company director
Promoter of Company
CEO of a company
96
Which of the following is not a function of R&T agent
Creating maintaining and updating

the investor record
Updating unit capital of fund
Processing dividends & redemption

payouts to investors
Settling investment transaction of

the fund
97
Prior approval of SEBI needs to be taken before a person is appointed as

trustee
TRUE
FALSE
98
Person, other than Indian residents, should also comply with RBI
guidelines for investment in Indian mutual funds
TRUE
FALSE
Page 5
NISM Mock Test 1

99
The first step of financial planning is
Evaluating the various alternatives
data gathering and goal setting
Page 6
establishing the client planner

relationship
Plan Review
NISM Mock Test 2

No.
QUESTION
OPTION A
OPTION B
OPTION C
OPTION D
In case of market correction _______ , takes more hit than _______ Fund.
Growth , Value
Momentum , Value
Value , Growth
Growth , momentum
Sponsor's net worth should be positive for
Last 5 years
last 2 years
last 3 years
last year
At time of NFO, which document compulsorily filed with SEBI
SID
SAI
Annual Report
Memorandum and Articles of

Association
Collection and payment of fund is a responsibility of
Custodian
R&T
Banker
AMC
Other than Indian residents, rest have to also comply RBI regulations
TRUE
FALSE
Which of the following not included in KIM
Details of Key personal of AMC
Tax benefit of MF
Expense and Load structure of

scheme
Due diligence certificate of AMC
Function of OD is
Give detailed information about

scheme to investors
Give current NAV
Gives Fund suggestion
None of the above
What should be the Sector Fund Allocation for a single income family having
small investable surplus
0.00%
70.00%
50.00%
30.00%
Which expense can be not charged to scheme?
Expenses on investor
communication
Service tax
Fees of custodian
General administration expense

of AMC
10
Low PE indicates that stock is cheap and you should buy it
TRUE
FALSE
11
Which of the following need not be included in KIM?
Detail of sponsor
Minimum investment amount and

cut off time
12
As per income tax act, Arbitrage Funds are taxed as per debt scheme
TRUE
FALSE
13
Which is purely treated as an international asset
Equity
Gold
14
Transfer of security from one scheme to another scheme is allowed in MF
TRUE
FALSE
15
Calculate the sales price of a unit when NAV is 15 and exit load 1%
15
14.85
15.15
15.5
16
If you get a cheque of 1 cr in a Gilt Fund at 2.30 pm, NAV date will be
NAV at 2.30pm
NAV at 3pm
Same day NAV
NAV of fund realization date
17
Who allots Amfi Registration Number?
AMFI
SEBI
AMC
none of the above
18
Which distribution channel don't have a huge branch network?
Institution
Corporate distributor
Bank
IFA
19
Dividends in the hands of investors are taxable at the rate of
10.00%
15.00%
33.00%
Tax Free
20
Last step in the process of designing model portfolio
Sector selection
Asset allocation
Scheme selection
Client selection
Page 7
Answer
B
Risk profile of the scheme
Opening and closing dates of

NFO
A
B
Real Estate
Debt
B
A
NISM Mock Test 2

21
Goal based approach of financial planning focuses on
Risk profiling
Achievement of the goal of

investors
Tax liability of investors
Investible surplus of the investor
22
What is the rate of return of PPF
20 Percentage
8 Percentage
8.50 Percentage
9.25 Percentage
23
What is the indicator of the risk adjusted performance ratio?
Beta
Standard Deviation
Sharpe's Ratio
Variance
24
Interest Rate sensitivity in Bond fund depends on
Credit Profile
Avg Maturity
YTM
Current Yield
25
SEBI doesn't allow passing of commission to
Distributor
Investor
Bank
IFA
26
If you get a 50L in equity fund at 3:30 pm today,investor will get the NAV of
Yesterday
Today
Tomorrow
NAV of fund realization date
27
Index against which performance of a fund is measured, is called
Tracking Error
Benchmark
Ex-mark
28
FMP are essentially a closed ended Scheme
TRUE
FALSE
29
The information regarding Which category of investors can invest in MF, is

given in
Offer document
SAI
MIN
SIN
30
Who can not be the distributor of the AMC
IFA
Bank
Employees of AMC
All of the above
31
Asset allocation means
Putting all eggs in Same basket
Investing according to Market
Investing in different assets
investing only in Equity Gold and

Silver
32
MIP is a Debt Scheme
TRUE
FALSE
33
Asset allocation should be in line with
Financial Goal
Age of Client
Risk Appetite
All of the above
34
A young investor having objective of capital appreciation should invest in
GILT
Liquid
Equity
debt
35
In NPS class-C predominantly invests in
Equity
Debt
Gold
Real Estate
36
Fund's risk relative to market is measured by
tracking error
Sharps' Ratio
Treynor
Beta
37
Which one is false about debenture
Issued by PSU
High credit risk
It has maturity
Duration is greater than 1 yr
38
Investor has read the OD and then the invested in the fund and fund goes
down, then he
Gets remedy from SEBI
Cant sue the AMC
Gets remedy from AMC
Gets remedy from NSE
39
STT charge on
equity Derivatives
Equity MF
Equity Schemes
All of Above
40
Which function AMC can't do in house
Custodian
Accounting
Distribution
Fund management
41
Value of Bond goes down when
Interest rate goes down
Interest rate goes up
IRR goes down
YTM goes down
Page 8
NISM Mock Test 2

42
Which one is not exempted in wealth tax
Gold sector fund
Gold deposit
Gold ETF
Gold
43
Institutional distributors needs to be
Registered with SEBI
Registered with AMFI
Listed on stock exchange
All of Above
44
Standard risk are
Uncommon to all
Common to all
Specific to a scheme
Systematic
45
Request for purchase can be made
In units and amount
In units only
In units or amounts
In amount only
46
In NPS investors get choice of the asset class but don't get choice of
investment manager
TRUE
FALSE
47
In case of online transaction, transaction time is applicable
Time shown in the computer of

investor
Time as web per web server
48
If investors invest through demat can AMC asks for KYC requirement
TRUE
FALSE
49
According to the asset allocation rule, equity exposure should be equal to
Age
100-age
Age-100
100.00%
50
Mutual fund is made up of
Pool of trustees fund
Pool of institutional investors
Pool of investment managers
Pool of investment money
51
Who can not invest in mutual funds?
Foreign companies
Banks
insurance companies
NBFC
52
Which is same as of OD?
SID
SID+SAI
SAI
KIM sumarry of SAI + SID.
53
Mutual fund distributor in India are member of AMFI.
TRUE
FALSE
54
Mutual fund in India is regulated by SEBI(Mutual Fund) act 1996.
TRUE
FALSE
55
Which of the following is appointed by trustee?
Custodian
Distributor
AMC
R&T
56
KIM has to be updated
Twice in a year
Quarterly
Once in a year
Once in two year
57
Which of the following is more risky?
Liquid fund
Index fund
growth fund
gilt fund
58
Material changes in KIM need to be updated
once in a year
Half yearly
Whenever material changes take

place
Once in two year
59
If an investor wants full exposure of gold his investment should be into
Gold ETFs
Physical gold
Shares of gold mining company
All of the above
60
If an investor invest 1 lakh rupees in a debt fund after 365 days it's value is
107756/- what is CAGR?
7.75%
7.47%
10% or 20% with indexation
insufficient data
61
If an investor invest Rs.100,00,000 in Equity MF Scheme at 3.30 pm through

outstation cheque he will get NAV of
Same day closing value
When fund gets credited
Previous day closing value
Next day closing value
62
Trail commission to advisor helps in --
Retaining the investor for long

term.
Portfolio Churning
New client acquisition
None of the above
Page 9
B
Mid night
Next day morning
B
B
NISM Mock Test 2

63
Exit load __________
Is ame for all schemes
Is same for all amc's
Varies from investor to investor
Varies from scheme to scheme.
64
Which fund is an actively managed fund?
Index fund
Diversified equity fund
Growth fund
B&C
65
Arrange in correct sequence
Risk profile, fund allocation,

portfolio construction.
Risk profile, portfolio construction,

fund allocation.
Portfolio construction,risk profile,

fund allocation.
Fund allocation. risk profile,

portfolio construction
66
Which of the following is against the ethics & Code of conduct guide line of
AMFI
Churning investor's money to get

better returns
All the associates of a distributor

should be amfi approved.
Keeping the interest of all unit

holders
All of the above
67
Minimum contribution of a sponsor in an AMC should be-
50.00%
60.00%
40.00%
25.00%
68
PAN card is not required in case of-
NRI
Minor & Senior Citizen
Corporate institution & trust.
None of the above
69
FMP can give better interest than a Bank Deposit.
TRUE
FALSE
70
The insurance associated with new pension schemes are regulated by-
PFRDA + IRDA
IRDA
PFRDA
None of the above.
71
In India mutual funds are-
Govt. institutions
Company
Trust
NBFC
72
Initial issue expenses in a liquid fund has to be-
0.000125
0.25 percentage
none of the above
73
A schemes NAV value increases for the period of 2 yrs . it will show-
Absolute return
Simple return
compounded annualized return
all of the above
74
In KIM it has been mentioned that the 65% investment will be in equity and
equity related instrument. this is called-
Policy of scheme
Objective of scheme
portfolio of scheme
None of the above.
75
KIM is attached with ?
Transaction slip
Application Form
Both A and B
Neither a nor b
76
Which is technical analysis-
Volume & price behavior
Mark to market
book value analysis
all of the above.
77
Who keeps detail report of transaction-
Custodian
AMC
R&T
Distributor
78
Formula to find out the Standard Deviation in excel is
stdev
sd
stddev
stddv
79
Time stamp machine contains-
Time stamping serial no
Machine identification
location code
all of the above
80
The expected return & yield of the scheme is mentioned in KIM
TRUE
FALSE
81
How frequently NAV of an equity scheme are calculated
Daily
Weekly
Quarterly
once in financial year.
82
If beta of a scheme is less than one the the fund is-
More risky compare to market
Less risky compare to market
neither risky nor profitable.
beta doesn't make any impact

on scheme performance
83
What is not true objective of life insurance-
Risk coverage
Investment
Both
None of the above
Page 10
NISM Mock Test 2

84
Unit capital is issued at-
10
25
50
100
85
Fund management cost is more in-
Passive fund
Gilt fund
Liquid fund
Active fund.
86
Independent trustee are appointed by-
Sponsor
SEBI
AMFI
All of the above
87
Distributors are paid-
Commission
Fees
Salary
All of the above
88
KYC is required for-
Guardian in case of minor
HUF
Sole proprietorship firm
All of the above.
89
KYC is compulsory -
For every investment
50000
50000 and above
first time investment
90
Formula for CAGR calculation is
Interest * No of years
(P1-P0)/PO*100
((End Value/Start Value)^(1/

(Period)) -1
None of above
91
The NAV of a fund is 15 applicable exit load is 1%, purchase NAV would be-
14.85
15
15.25
15.65
92
In case of breach of Code of conduct license is canceled by-
AMFI
SEBI
Sponsor
AMC
93
Which is true in case of PPF?
Partial withdrawal facility is

available after one year
Investment & return are tax free.
Both
None of the above
94
A fixed term plan series is-
As open ended fund
A closed ended fund
A fixed term bank deposit
A fixed term corporate bond
95
The P/E ratio is an important measure of a company's anticipated performance.

it is calculated using.
Market price and dividend
Market price and earning per share
Market capitalization and dividend
Market price and face value
Page 11
NISM Mock Test 3

No.
QUESTION
OPTION A
OPTION B
OPTION C
OPTION D
Which one of the following is not an eligible investor?
Insurance Companies
Govt Institutions
Foreign Citizens
Provident Fund
For a customer holding units in demat , the AMC also requires to

do his KYC ?
TRUE
FALSE
Which investment below gives international exposure
International Funds
Gold Fund
None
Both
On doing risk profiling which asset allocation does it give ?
Strategic Asset Allocation
Fixed Asset Allocation
Flexible Asset Allocation
Tactical Asset Allocation
In a balance fund with net assets of 750 crores what is the

expenses that can be charged ?
10.13
15.38
17.86
16.125
I invest Rs 50 lacs at 2.30 pm with a local cheque for funds other

than liquid scheme, which NAV will you get ?
Next day NAV
Same days closing NAV
Previous day NAV
Closing NAV of the day preceding

next business day
What is the DDT for an individual in liquid fund ?
0.25
0.2
0.13
0.1
If client invest in liquid fund at 11.30 am and the fund gets cleared
on the same day which NAV the client gets ?
Next day NAV
Closing NAV of the day preceding next

business day
Same days closing NAV
Previous days closing NAV
What is true about premium paid in a life insurance company ?
Customer can decide premium
Premium can be availed under Sec 80

c
Premium can be shown as exp
Premium is volatile
10
The person with whom the units are pledged is known as
Pledger
Pledgee
11
What is the highest expense ratio in a Fund of Fund scheme ?
2.25%
1.75%
12
SEBI is sole regulatory authority for MF are answerable
TRUE
FALSE
13
How is company fixed deposit compare to bank fixed deposit ?
Low Risk
Highly Volatile
Less Safe
Lower Return
14
Within how many days the dividend warrants to be dispatched on

declaration?
15
10
30
15
A distributor needs different ARN for each AMC ?
TRUE
FALSE
16
A conservative investor need not be advised to invest in ?
Gilt Fund
Liquid Fund
17
The New Pension scheme is both regulated IRDA and PFRDA as it

has an insurance component ?
TRUE
FALSE
18
Which is the fastest way of remitting funds on real time basis?
NEFT
D/D
SWIFT
RTGS
19
Which of the following is a financial asset ?
Govt Security
Gold
Real Estate
None of the above
20
Which of the following is an SRO ?
AMFI
SEBI
BSE
RBI
Page 12
Answer
C
B
B
0.75%
1.50%
C
A
B
High Yield Bond Fund
Short Term Plan
C
B
NISM Mock Test 3

21
NFO other than ELSS can remain open for maximum _________
7 days
15 days
21 days
30 days
22
In NFO the account statement is to be dispatched within days

on closure of NFO ?
5 days
15 days
20 days
30 days
23
Companies issuing short term debt is called
CD
Tbills
Debentures
CP
24
Within a category one can decide on investments based on Sharpe

Ratio
TRUE
FALSE
25
Which of the following exempt from DDT ?
Equity Oriented Fund
Liquid Fund
26
The arbitrage funds are taxed like debt funds
TRUE
FALSE
27
Which of the below is not in a Transition phase ?
Buying of house
Providing for daughter marriage
Shifting of job for higher income
Providing for foreign study for son
28
The NAV of scheme is impacted by ?
No of Investors
Unit Capital
Market Value of Portfolio
Size of Fund
29
Technical analysis is projecting trend based on human behavior ?
TRUE
FALSE
30
Sub distributors work with
Online platform
Banks
IFA
Distribution companies
31
Initial issue expense that can be charged to fund
NIL
1.00%
2.00%
1.75%
32
According to Performance Advertisements the return shown for

equity funds over 1 years are
Annualised Yield
Simple Return
Absolute return
CAGR
33
In New Pension Scheme portfolio of Assets class E predominantly

investment in
Equity
debt
Govt. Sec.
34
Expense ratio is most important in case of
Index Fund
Offshore Fund
Active Fund
Fund of Fund
35
Code of ethics for employees of AMC is described by
SEBI
AMFI
Internal Audit Team
Trustee.
36
Recurring expenses in Equity scheme has a limit up to
1.50%
0.50%
1.25%
2.50%
37
In Transition phase of Wealth Cycle investor tends to increase the

proportion of_______ assets in his portfolio.
Equity
Liquid
Gold
None of above.
38
Which of the following is a Financial Asset?
Gold
Real State
Bank deposit
None of above.
39
Index fund can give better returns from its Benchmark.
TRUE
FALSE
40
The young BPO executives should not be advised to invest in long

term schemes because of their lavish life style ?
TRUE
FALSE
41
Term Stock picking is used in which of the following?
Bottom up approach
Top down approach
Both
None of above.
42
What is the applicable rate of STT in case of repurchase of Equity

scheme?
0.13%
0.33%
0.02%
0.25%
Page 13
A
Income Fund
Gilt fund
A
B
NISM Mock Test 3

43
Market value is 152 crore, Dividend accrued but not received= 8

crore, liabilities = 2 crore Total no of outstanding units is 75 lakhs.
What will be the NAV of the scheme?
200
210.67
213.33
None of above.
44
Investor selects an MF based on
Investment Philosophy
Investment Strategy
Investment Policy
Investment Objective
45
______ has been appointed by Trustee
Custodian
R&T
AMC
Distributor
46
Risk May be defined as
Asset Allocation
High Transaction Cost
Financial Loss
Portfolio Rebalancing
47
Financial Planner defines that client does not have resources to

meet goals. He should
Inform the Client
Avoid telling as client will be dishearted
Avoid telling as he may lose the client
Increase risk to generate higher

return
48
Which of the following account in NPS is a Saving Account
Tier I
Tier II
Tier III
Tier IV
49
Mutual Fund is exempted from Wealth Tax
TRUE
FALSE
50
KYC is required for investment more than
20000
10000
Not required
Needed for a single rupee

investment
51
If a minor Invests Rs 10,000 in MF, KYC is needed or not
KYC for Minor is needed only if

investment exceeds Rs 20000
KYC for Minor is needed only if

investment exceeds Rs 50000
If investor is a minor, KYC should be

of his guardian even for a single
rupee investment
KYC is not at all required for

minors
52
Since Preparation of WILL is a long process, it has to be avoided
TRUE
FALSE
53
Close ended fund allows investors to sale their units
By allowing fixed number of Units to

sale
By selling number of units in a fixed

interval
by listing MF in stock exchange
54
______ Allots the ARN Number
AMC
SEBI
NISM
AMFI
55
Application for MF would be rejected if paid in
Cheque
DD
Cash
Bankers cheque
56
Mutual Fund Investor can't pledge units
TRUE
FALSE
57
Change in the value of NAV is
Standard Risk
Systematic Risk
Unsystematic Risk
58
Which one is called cum-dividend NAV?
NAV on the date when trustee

approves dividend
NAV of the date when notice is issued

to meet trusteed to finalize dividend
NAV after the date of dividend
None of the above
59
When scheme is first launched and investor invests in MF... it is

called
NFO
IPO
Purchase
Re-Purchase
60
KIM Document is a summary of
SID
SAI
OD
SID+SAI
61
If investor invests in a Guilt fund at 3:30 p.m., he would get the

units at which NAV ?
Current NAV
Previous Days NAV
NAV of Next Business Day
Same day NAV
62
If investor invests in a Equity fund at 3:30 p.m., he would get the

units at which NAV ?
Same day NAV
NAV of Next Business Day
Previous Days NAV
Current NAV
63
The guideline issued by AMFI for intermediaries are known as
AGNI
ACE
AMFI
None of the above
64
Time stamping arrangements is must for
Offices of Distributors
AMC Offices
Bank Distributors Branch
Offices declared as point of

acceptance
Page 14
B
C
B
A
NISM Mock Test 3

65
Unaudited accounts of the scheme must be published in the news

paper
Every 3 months
Every 6 months
Every 12 months
None of the above
66
An Investor Invests Rs 100000 in a 365 days FMP and got Rs

107750, what would be capital gain in this case ?
7750
750
Insufficient Data
1000
67
STT is charged on
Equity Share Trading
Derivative Trading
Equity MF
All of the Above
68
An investor plans to invest Rs 12000 in a scheme whose NAV is

Rs 12, how many units he will likely to be obtained
<1000
1000
1200
Cant Say
69
Company's Earning per share would be indicated by following
P/E Ratio
Current Ratio
EPS
Leverage Ration
70
Beta of Index would be
Less than 1
Equals to 1
more than 1
None of the above
71
While evaluating return for an index fund across a peer group,

which of the following is more important
Beta Coefficient
Past performance
Tracking error
R-Squared
72
The fund sponsors should have a sound financial track record of
12 months
3 Years
5 Years
7 Years
73
What is the current PPF Rate ?
7.50%
7.75%
8.00%
8.50%
74
Father wants his son to be a doctor and study will start after 5
years. The current expense is 2500000. How to calculate the
expense after 5 years
A = P + (1+r) ^ n -1
A = P x (1+r) ^ n
A = P / (1+r) ^ (1/n) -1
A = P / (1+r) ^ n
75
Appropriate benchmark for G-sec fund
I-sec+ I -bex
CRISIL liquid fund index
MIBOR
CRISIL - MIP bladed index
76
Which of the following has lowest risk ?
Liquid Fund
GILT Fund
Diversified debt fund
Diversified Equity fund
77
If I require 500000 after 2 years, which method will I follow ?
Discounting method with interest rate
Discounting method with inflation rate
Compounding method with interest

rate
Compounding method with

inflation rate
78
Mutual Fund Sponsors can be compared to
Depositor of a company
Company director
Promoter of a company
CEO of a company
79
Which of the following can be charged to the scheme
Salary of Fund Administratives
Office rent
General Administration Expenses
Fees of Custodian
80
Low PE compared with peer group or industry standard indicates

that stock is cheap.
TRUE
FALSE
81
What would be the redemption value of a Unit if NAV is 15 and Exit

load is 1%
15
14.85
15.5
15.15
82
Last step in the process of designing model portfolio
Sector Selection
Asset Allocation
Scheme selection
Client Selection
83
For a distribution channel, 60% of the employees should have

AMFI Registration Number
TRUE
FALSE
84
Equity Fund's Risk relative to market is measured by
Tracking error
Sharpe's Ratio
Treynor
Beta
85
Standard Risk is
Common to all
Uncommon to all
Systematic
Specific to all
86
Request of Purchase can be made
Along with requisite form and Cheque
Only With Cheque
Only Purchase requisite form
Page 15
NISM Mock Test 3

87
If an investor invests 1,000,000 at 3:30 p.m through outstation

cheque, he will get NAV of
Same day closing NAV
When fund gets credited
Previous day closing NAV
Next Day NAV
88
Liquidity risk is highest in
Mid Cap stocks
Front Line Stocks
Index Stocks
Gilt Security
89
Mr A Holds 2000 Units, scheme declared 1:4 bonus. How many

units will Mr A Gets ?
400
500
8000
Depends on NAV
90
Investor can sue the trust for breach of trust
TRUE
FALSE
91
Distributors do not get commission on self business
TRUE
FALSE
92
Which of the following is an SRO ?
AMFI
SEBI
AMC
93
What remains constant in a close ended fund ?
Unit Capital
NAV
Both
94
SEBI regulates
Mutual Funds
Depositories
RTA
95
Unit holders can hold their units in demat form
TRUE
FALSE
96
KIM needs to be updated every
3 months
6 months
97
Trail commission are linked to valuation of portfolio in the market
TRUE
FALSE
98
Risk can be measured by
Variance
Standard Deviation
Beta
Any of the above
99
According to the Certified Financial Planner - Board of Standards

(USA), the third stage in Financial Planning is
Establish and Define the client

planner relationship
Gather client data
Define client goals
Analyse and Evaluate Client's

Financial Status
Page 16
None of above.
D
A
All of the Above
D
A
Once a year
No need to update it
C
A
NISM Mock Test 4

No.
QUESTION
OPTION A
OPTION B
OPTION C
OPTION D
Commodity as an asset class does not include
Fiber
Spices
Energy
Art
Financial Planning is just a process and so Financial Planner can use

any profile found in the web
TRUE
FALSE
5 star fund indicates
Lowest Expense ratio
Lowest Load
Investor should invest in MF with few offices as office expense is

charged to the fund
TRUE
FALSE
NAV changes with
Number of investor
Number of Units remaining

invested
Size of Portfolio
Market value of the portfolio
Investor select an MF based on matching
Investment Philosophy
Investment Policy
Investment Objective
Investment Strategy
Indian investor in a US $ based fund benefit when $ becomes
Weak
Strong
Euro Becomes Weak
Steady
Understanding the psychology helps in risk profiling
TRUE
FALSE
Securities of a fund are held by
Custodian
AMC
R&T
Broker
10
Risk may be defined as
Asset Allocation
High Transaction Cost
Portfolio re balancing
Probability financial Loss
11
Financial Planner finds that client does not have resources to meet
goals. He Should
Inform the Client
Avoid telling as client will be

disheartened
Avoid telling as he may lose the client
Increase risk to generate higher

return and meet the goal
12
Which of the following is with drawable in NPS
Tier I
Tier II
Tier III
Tier IV
13
Mutual fund is exempted from Wealth Tax
TRUE
FALSE
14
KYC is required for investment more than
50 K
5K
Any Amount
100K
15
Which of the distribution channel does not have wide branch network
Bank
Distribution House
Broking company
IFA
16
Which of the following is not a function of R&T
Process Dividend and

redemption
Maintain the records
Settling investors transaction of fund
Calculation of NAV
17
AMFI interacts with _______ on all issues related to MF industry
RBI
SEBI
Govt
All of the above
18
CVL system generates Acknowledge along with
PAN
MIN
KYC
Folio
19
High portfolio turnover ratio implies
High Cost
Low Expense
High return
Non Performance
20
Since preparation of WILL is a long process, it has to be avoided
TRUE
FALSE
21
Benefit of Demat a/c is that
Direct credit of bonus units
Single contact point for change of

address
22
Among equity fund , growth fund has highest risk
TRUE
FALSE
Page 17
Answer
D
B
Highest Performance
Best Portfolio
C
B
B
Single point for portfolio valuation
All of the above
D
B
NISM Mock Test 4

23
What determines the interest rate sensitivity
Credibility
Quality
24
Fundamental Analyst are also called " Chartist"
TRUE
FALSE
25
Fundamental Analyst's decision are base on
EPS in dollar
Trialling EPS
26
Debenture is physical asset because the paper has some value
TRUE
FALSE
27
Investing in Gold ETF helps
Guarantees high return
Not permitted in India
Provide risk cover
Reduce storage cost and risk
28
Which of these activity are carried out before getting SEBI approval
Updating the SID with NFO

dates
Approval of the features by trustee

and AMC board
Dispatch product literature
Printing KIM and application form
29
Childhood and transition are similar stage of LIFE cycle and WEALTH
cycle stage
TRUE
FALSE
30
Investor with a long term investment horizon for growth are likely to
invest in
Equity Fund
ST Debt Fund
31
Some allocation to GOLD is likely in most model portfolio
TRUE
FALSE
32
Approval of SEBI is needed to appoint a person as Trustee
TRUE
FALSE
33
What is the drawback of PPF
One withdrawal at the end of

Seventh Year
Interest and Withdrawals are not

taxable
Half yearly Compounded interest
Not Guaranteed by Govt
34
Commission paid at the time of investment are called
Upfront Commission
Rebate
Trail
AUM Retention Fee
35
Investors in NPS can choose asset class but not fund managers
TRUE
FALSE
36
Settlement responsibility in BSE / NSE Platform are with
AMC
Clearing House Concerned
Stock Exchange
Member
37
Which of the following information does time stamp include
Machine Identifier
location code
Serial No
All of the above
38
Comprehensive FP should be restricted to five years
TRUE
FALSE
39
Closed ended fund has
Fixed AUM
Fixed Unit Capital
Fixed NAV
Assured Dividend
40
To which of the following PAN does not apply
PIO
NRI
Minor & Senior Citizen
None of above
41
Father wants to start his business, this is
Asset Allocation
Financial Goal
Appreciation
Financial Planning
42
In India one can invest in MF only through distributor
TRUE
FALSE
43
SIP is called RCA (Rupee Cost Averaging)
TRUE
FALSE
44
Liquidity risk arises in
Closed ended fund
Open ended fund
Gold
Debt
45
A mutual fund is
A pool of trustee money
A pool of investment institutions
A pool of investment managers
A pool of investment fund
46
The name and background of key personnel in AMC
Are not included in SID
Declared on MF website
Are included in SAI
Are not relevant so not disclosed
Page 18
YTM
Avg Maturity
D
B
Historic EPS
Projected EPS
D
B
B
Income fund
liquid Fund
NISM Mock Test 4

47
Annual report should announce the unclaimed amount and no. of

investor
TRUE
FALSE
48
STCG in GOLD is applicable if the holding period is less than
12 months
36 months
6 months
9 months
49
_______ allots the ARN number
AMC
AMFI
SEBI
NISM
50
Application for MF would be rejected if paid in
Cheque
DD
Cash
Bankers cheque
51
Role of Credit rating agencies is highest in
Debt Fund
Gold Fund
Real Estate Fund
Equity
52
Investors in PPF gets deduction up to
100000
10000
70000
75000
53
Cut-off time are
Agreed between AMC &

Distributor
Different for every RTA
Prescribed by SEBI
Different from AMC to AMC
54
Money market in which MF invests are regulated by
AMFI
SEBI
RBI
Stock exchange
55
For with-holding tax on income earned by NRI depends on nature of

income, nature investment and investor's country of domicile
TRUE
FALSE
56
Gilt fund is a good alternative to Capital Appreciation
TRUE
FALSE
57
Which of the following is growth asset
Savings a/c
Current A/c
Real Estate
Govt Security
58
Which is prohibited in AMC's Code of ethics
Inter Scheme transfer
Front Running
Security transaction through associated

broker
Distributor of MF through AMC
59
Loads are applicable to
Transfer of Closed ended

Scheme
Redemption
Purchase and redemption
Purchase
60
Bank on receipt of money from abroad issue
IEC
FIRC
MIN + Folio
61
Mutual Fund investor can't pledge units
TRUE
FALSE
62
Standard risk factors are
Not market risk
Specific to scheme
not relevant to investor
common to all scheme
63
Unit holders are entitled to
Receive information that can

effect their investment
protection of capital even if market

goes down
Sue the MF or Trust
Assured return even if there is no

guarantee
64
Appropriate benchmark to large cap
BSE small cap index
Sensex
BSE 500
BSE Mid cap Index
65
If market crashes after bull run which fund is more safer
Growth
Value
Sector
Theme
66
Insurance in case of MF is
Up to 1 Lac per scheme
1Lac per fund
More than 1 lac
None of the above
67
Net Avg asset of the scheme is 300cr and Investment transaction

value for the same is 1000 cr in a year. What is the avg holding
period (months)?
0.3
0.36
Insufficient Data
3.6
68
Mutual Fund transaction on stock exchange are governed by stock

exchange redressal system
TRUE
FALSE
69
Which one is called Cum-Dividend-NAV?
NAV on the date when trustee

approves dividend
NAV of the date when notice is

issued to meet the trustees to
finalize the dividend
Page 19
B
B
B
NAV after the date of dividend
None of the above
NISM Mock Test 4

70
IF Gold price appreciates investors should invest in
Gold sector fund
Gold ETF
71
When scheme is first launched, AUM of the scheme would be nil
TRUE
FALSE
72
An investor looking to select a hybrid fund with tax benefits must

choose.
Conservative MIP
Balance fund Equity oriented
Balance fund Debt oriented
Aggressive MIP
73
Encroachment risk is higher for
Land
Building
Gold
Art
74
Unaudited report has to be published in newspaper every
3 months
6 months
12 months
3 financial year
75
Tax differal is advantage
Growth
Dividend payout
Dividend reinvest
Capital gain
76
The expense ratio is affected by
Fund size
Average account size
Portfolio composition
Stock market conditions
77
In a mutual fund investors subscription are accounted for as
Liabilities
Unit capital
Deposits
None of the above
78
A disclosure should be made in the offer document if an AMC has

invested more than the following percentage of its net assets in group
companies.
0.5
0.25
0.4
0.1
79
Open ended fund can invest in unlisted securities up to-
0.05
0.0475
0.06
0.0525
80
Fund of Fund scheme invest in-
Mutual Fund scheme
International fund
Index fund
Gilt fund.
81
A scheme can distribute dividend on its-
Realized profit.
Profit after tax
realized & non realized profit
none of the above
82
A newly married couple should invest into --
Debt fund
Balance fund
Equity fund
Liquid Funds
83
If an investor wants to invest in Mutual fund through exchange

platform he can buy from
Existing investor
Broker
AMC
Distributor
84
Standard risk factors are
Changes from scheme to

scheme.
Common for all scheme
Both
None of above
85
The presence of market makers provide liquidity in case of ETF
TRUE
FALSE
86
Net asset Rs.500cr./ total transaction value is Rs. 1000 cr what is

portfolio turnover ratio
0.5
data insufficient
87
Avg net asset of scheme is 3000,total transaction of a scheme 10,000

what is portfolio turnover ratio
0.3
3.33
88
What is an ideal sector allocation in a sectoral fund
<5
>5
Not more than 2
>10
89
Which of the following is true with respect to the automatic

reinvestment plan?
It allows the investor to reinvest

the amount of dividend
It ensures that the investor reaps

the benefit of compounding
Some funds allow the investor the

invest the dividend in the other
schemes also
All of the above.
90
Which of the following is not true for Exchange Traded Funds (ETF)?
ETF combines the best

features of open end and
closed end.
Its pricing is linked to the index
It offers the investors the benefit of

flexibility of holding a single share as
well as the diversification and cost
efficiency of index
ETFs recover heavy load from the

investors.
91
In which of the following the investor generally bears the highest

expenses?
Exchange traded funds
Balanced funds
Commodity funds
Fund of funds.
Page 20
Index Fund
Gilt edge Security
B
A
NISM Mock Test 4

92
Which of the following is not the advantage of mutual funds?
Reduction of transaction costs
Convenience and flexibility
Tailor made portfolio
Liquidity.
93
Investor who wants long term exposure to gold should opt for
ETF Gold
Gold Sector Fund
Gold Future
Jewellery's
94
Which is the short term Govt Security
Commercial Paper
T-Bills
Certificate of Deposit
Gilt
95
Which is the most Illiquid Asset?
Gold
Equity
Debt
Real state
Page 21
NISM Mock Test 5

No.
QUESTION
OPTION A
OPTION B
OPTION C
OPTION D
Answer
Bank lends against
Pledged units
Dividend
Nomination
Redemption
SID is approved by
Investor
Sponsor
AMC and Trustee
Custodian
Cut-off time for NAV
decided by AMC
same for all scheme
by trustee
Prescribed by SEBI
preparation of WILL is pessimistic exercise, so it is better to avoid
TRUE
FALSE
Which document is not required for institutional investor
P & L account
Memorandum of the articles of

association
PAN card
Authorized signatory list
Distributors are provided commission for up to
3 yrs
5 yrs
10 yrs
investors stay invested
SEBI is responsible to develop a cadre of well trained agents and

distributors
TRUE
FALSE
High regular income yield is indicator of scheme weakness
TRUE
FALSE
Who promotes MF
Sponsor
custodian
AMC
trustee
10
Liquidity risk is highest in
Mid cap stocks
Front line stocks
Index stock
Gilt security
11
A unit holder is not responsible for
reading OD
selecting stocks in a portfolio of

the mutual fund scheme
regular monitoring investment
awareness of risk factors
12
Accepted standard for return calculation in financial market is
abs return
CAGR
total return
simple annualized return
13
STT is applicable on
Purchase of debt fund
Redemption of debt fund
Redemption of equity fund
All of above
14
Mr A holds 1200 units , scheme declares 1:3 bonus. How many units will
Mr A gets
300
400
3600
depends on NAV
15
Corporate deposit interest rate depends on
liability of borrower
asset of borrower
credit rating
profit of borrower
16
Commodity does not include
Art
Energy product
spices
Fibres
17
The value of investment in mutual funds..
Increase gradually every day.
Change with the value of the

investment portfolio
Decrease gradually every day
Be volatile in long-term
18
The first ever mutual fund scheme in India was launched in
1964
1951
1970
1994
19
Investors buy units of open-ended funds during the continuous offer at the
NFO price
Market Price
Both
none of the above
Page 22
NISM Mock Test 5

20
The investment objective of which of these funds would be to seek capital

appreciation?
Dividend yield fund
Growth Fund
Liquid Fund
Income Fund
21
If we have a view that gold price will appreciate, which mutual fund
scheme should we invest in?
Gold sector
Gilt edged securities
Index fund
Gold ETF
22
One of the advantage if ETF is..
Investor can see where his

money is invested
These schemes can generate

higher returns than mutual fund.
Investors can buy of sell units on

stock exchanges at price that
closely track valuation at that
time.
ETF offer tax benefits.
23
Mutual funds are constituted in India as a..
Companies
Trust
Partnership firms.
NGO
24
Mutual fund sponsor can be compared to ..
A depositor in company
A company director
Promoter of a company
CEO
25
Which of these entities enables collection and payment of fund.
Broker
Banker
R&T Agents,
Custodian
26
The constituents of mutual fund are appointed with the approval of ..
Sponsor
Trustees
SEBI
AMC
27
The applicable guidelines for mutual funds are set out in SEBI (Mutual
Fund) regulation, 1996..
TRUE
FALSE
28
Bank sponsored mutual funds are also regulated by
AMFI
Stock Exchanges,
RBI
SEBI
29
AMFI code of ethics prescribes that mutual fund scheme portfolios should
be managed in interest of
Identified class of unit holder
All classes of unit holders
Retail individual
Institutional unit holders
30
Although AGNI is mandated. there are no penalties for breach of code of

conduct.
TRUE
FALSE
31
To achieve growth by investing in equity and equity related investments,

balanced with income generation by investing in debt and money market
instruments is likely to be the investment objective of ___________ .
Equity fund
Money market fund
32
Annual report of AMC should necessarily mention the unclaimed amount

and the number of such investors for each scheme.
TRUE
FALSE
33
Unit holders enjoy rights to the asset of the funds...
According to the plan chooses by

them.
As per decided by trustees
equally for all holders
In proportion of holding
34
For fund of fund NAV is to be updated on-line in the website of AMFI and
the mutual fund website..
Before 9 pm same day
Before 10 am following day
after 10 pm same day
Before 9 pm following day
35
Which of the following is not a mandatory services standard as per SEBI.
Periodic disclosure of the fund's

holding
Periodic disclosure of AMC'c

accounts
On-line purchase and sells of

units
Dispatch of dividend within 30

days
36
Investors can sue trustees for breach of trust.
TRUE
FALSE
37
Which of the following is the function of an offer document
To enable comparison of MFs
To give the FM's commentary on

market
To report the performance of

scheme
To give investors information

about scheme
38
NFO other than ELSS can remain open for _________
15 days
30 days
45 days
Forever
39
Which of the following contain detail information on the portfolio

characteristics and operational features of a scheme?
Key Information of Memorandum
Statement of additional
information.
Scheme information document
Addendum
Page 23
Balance fund
Debt Fund
NISM Mock Test 5

40
Which of the following is not fundamental attribute of scheme?
Name ff Fund Manager
Investment Pattern
Type of risk profile
41
Which of the following is a synopsis of the offer document?
Trust deed
Memorandum of Association
Statement of additional
information
Key information of memorandum
42
The format of KIM
Given by SEBI
Given by AMFI
Varies to fund to fund
By Stock Exchange
43
Some MF companies allow investors to transact through their website.
TRUE
FALSE
44
There is no need for educational qualification to be MF advisor.
TRUE
FALSE
45
Distributors are compensated by mutual fund companies primarily

through..
Salaries
Annual fees
Share in AMC's profit
Commission
46
Which of the following statement is true?
Distributors do not get upfront

commission on self business but
they get trail commission
Distributors do not get trail

commission on self business but
get upfront commission.
Distributors get upfront and trail

on self business
Distributors do not get upfront

and trail on self business.
47
AMFI is SRO for mutual fund and regulates all mutual Fund
TRUE
FALSE
48
AMFI code of ethics prescribes that mutual fund schemes portfolios

should be managed in the interest of
identified special classes of unit

holders
all classes of unit holders
49
Transfer of investment from one scheme to another is allowed
TRUE
FALSE
50
If the investor wishes to change the distributor
He will need to give written

request to the fund house
he needs to give the NOC from

previous distributor
51
Investor can sue the trust for breach of trust
TRUE
FALSE
52
Since NFO is a marketing decision ,CIO has limited role in deciding it's
structure
TRUE
FALSE
53
Info provided in the SAI
addendum made in the scheme
Updation in OD
Updation in KIM
None of above
54
Which of the following form a part of fundamental attributes of a fund
Fund manager
Investment objective of fund
Load
None of above
55
What remains constant in closed ended fund?
Unit capital
NAV
both
None of the above
56
Where do high-yield funds invest?
Junk Bonds
Gilt fund
Equity growth Fund
Treasury bills
57
High yield bond schemes invest in junk bonds?
TRUE
FALSE
58
Which ratio measures risk-adjusted return?
Sharp Ratio
Treynor ratio
Both
None of the above
59
Which funds have features of both open ended & close ended?
Interval Fund
Balance Fund
Sector Fund
Thematic Fund
60
Which approach is used by Fund managers for picking up the Value

stocks.
Bottom up approach
Top down
Both
None of the above
Page 24
B
retail individual class
None of above
B
A
AMC may allow or disallow
All of above
NISM Mock Test 5

61
Can liquid funds invest in short term bank fixed deposit?
Yes
No
62
Expenses in fund of funds?
Less then direct Investment in

scheme
More than direct investment in

scheme
Equal to direct investment in

scheme
None
63
Which fund has highest risk?
Liquid
Income
G-securities
Liquid Plus
64
Childhood & transition phase is common in life cycle & wealth cycle?
TRUE
FALSE
65
What is not mandatory in application form?
Occupation
Status of Individual
66
Is KIM a synopsis of offer document?
TRUE
FALSE
67
Absolute return is best judged if the investment horizon is
<1yrs
>1 yr
Anytime
<2Yrs
68
Dividend distribution tax in liquid fund payable by investor?
Nil
12.50%
10.38%
30.00%
69
What is the rate of TDS in liquid mutual Fund?
Nil
12.50%
10.38%
30.00%
70
Who can distribute mutual fund through stock exchange?
Equity Broker with out

certification
NISM certified & AMFI registered

member
Both
None of the above
71
What is the beta of index fund?
More than 1
Less than 1
None of the above
72
When a time stamping machine is installed should it be informed to

trustees
TRUE
FALSE
73
The difference between the yield on gilt and the yield on a non
government debt security is called its yield spread.
TRUE
FALSE
74
Liquid schemes invest in securities
Less then 91 days maturity
More then 91 days maturity
Less then 1 year maturity
More then 1 year maturity
75
Mutual fund is
Trust
Company
Society
None of the above
76
Who is keeps the custody of security of Mutual Fund ?
AMC
R&T
Custodian
Sponsor
77
AMFI is a SRO ?
TRUE
FALSE
78
AGNI is
Code of Conduct For

Intermediaries
Rules & Regulations
Terms & Conditions
Non of the above
79
NFO opening and closing detail mention in
KIM
SID
OD
All of above
80
KIM is to updated
Once in quarter
Once in month
Once in year
weekly
81
Recurring expenses includes
Investment advisory fee
Charged by the AMC, R&T fee
Marketing and selling fee
All of above
Page 25
B
Mode of holding
PAN
A
A
NISM Mock Test 5

82
Offer Document of Mutual Fund is approved by SEBI
TRUE
FALSE
83
Stock exchange brokers are permitted to distribute MF after passing the

certifying exam
TRUE
FALSE
84
If the post tax rate of return on an investment is 8% and the inflation rate
is 6% the real rate of return is
2.00 Percentage
1.89 Percentage
8.00 Percentage
Non of the above
85
A client is investing Rs. 1 Cr. in gilt fund which day NAV he will get?
Same day closing NAV
Next Day NAV
Previous day NAV
NAV of the day when funds are

realized.
86
How many minimum client is required for a scheme to run
20
10
30
50
87
There is no TDS on dividend distribution and redemption
TRUE
FALSE
88
Which documents are needed for KYC?
PAN card
Address proof
Photo id proof
All of above
89
Which id proof is not valid identity proof for KYC (individual)
Credit card
Address proof
Driving license
All of the above
90
For additional purchase
Only transaction slip to be filled
Transaction slip with purchase

cheque
Only cheque
None of the above
Page 26
NISM Mock Test 6

No.
QUESTION
OPTION A
OPTION B
OPTION C
OPTION D
Answer
Which of the following entities reaches MF product beyond geographical locations
The Brokers
The Custodian
The Distributer
R & T Agents.
SEBI is sole regulatory authority for MF are answerable
TRUE
FALSE
Where the investor desires to hold MF unit in DMAT form the AMC will still be required to
Perform KYC to such investors
TRUE
FALSE
Offer document enable investor to compare the of MF scheme with another MF scheme
TRUE
FALSE
which of the following investors belong to institutional group?
HUF
NRI
Proprietary firm
FII
shall mention the dividend

declared or paid in Rs per unit
along with face value of each
unit ofthat scheme and the
prevailing NAV at the time
ofDeclaration of Dividend
All of the above
Performance advertisement
Shall identify Nature of scheme
shall only advertise

compounded annualise yield
Calculated using the prescribe
procedure
Benefits of STP is
Paper work is minimized
Idle funds situation reduced
Both
None
Company has issued 10 core equity shares. It earns profit of Rs. 105 core on which it has
Paid tax of Rs. 5 core and distributed dividend of Rs 20 core. What is EPS ?
10
10.5
12
11.5
Floating Rate Interest is ?
government yield+ spread
yield spread
base + spread
payable only on maturity
10
Market price of which of the following investment instruments will fluctuates more ?
Long Tenor debt
Short tenor Debt
Floating Rate Securities
Debentures
11
Asset considered for Asset Allocation ideally be
Similar
only Physical
Only Financial Asset
Mix of different kind of Asset
12
Which of the following is most unlikely to have a model portfolio with 20% alloacation to
sector fund?
Young Executive early in his

career.
Well Placed Mid Level

Executive
Investor in Distribution Phase
Senior Executive with Well

Settled Children
13
A distributor can be empaneled by AMC only if
Such distributor and its

representative has/have
cleared certifying Exam
Such distributor is approved by

AMFI
Such Distributor is registered

with Stock Exchange
Approved by SEBI
14
AGNI is mandated by ?
AMFI
AMFI and SEBI
RBI
SEBI
15
Junk Bond Scheme is also be known as High Yeild Scheme ?
TRUE
FALSE
16
According to Some studies Asset Allocations and Investment Policy can better explain the
portfolio performance as compared to Stock selection and Investment Timimg?
TRUE
FALSE
17
Which Of the following benefits of starting Health Inurance Policy early?
Higher Money Back after 5

years
Protection against Insurance

Company rejecting claim on
the ground of pre-existing
illness
Both of the above
None Of the above
18
Which of the gollowing is Government Savings Scheme?
Infrastrucure Bond
RBI releif Bond
Post Office recurring Deposit
All of the above
Page 27
NISM Mock Test 6

19
Duration of PPF deposit is
15 years
6 years
7 years
3 years
20
Relaxation from Documetation required for MICRO SIP is available for
Only Individuals other than

NRIs and PIOs
Individual Including NRI and

PIOs
Individuals Including NRI but not

PIOs
Individuals including PIOs

but not NRIs
21
Intial Phase of Life Cycle is Accumulation?
TRUE
FALSE
22
Life insurance is meant for
Tax planing
Risk protection
Investment
Savings
23
Real Estate mutual fund is
Beyond means of retail

investor's
Provided benefits of real estate

& MF investing
Are popular investment options
Are not easy to liquidate
24
Black swan refer to
Probabilities of large losses
MF ratings
Kind of offer documents
Incentive to distributer
25
A five star rating in MF schemes indicates that
Lowest expense ration
Lowest load
Demonstrate superior
performance
Best portfolio
26
Which of the bond fund carries least amount of interest risk
Dynamic bond
G-sec fund
Income fund
Money market fund
27
Asset allocation must primarily based on
Investment needs
Insurance needs
Taxation needs
Financial goals
28
Faced with the financial difficulties a family is likely to do all this except following
Move to a larger house in a

better locality
Economise Expenses
Wifes starts working
Husband takes additional

part time job
29
Pre-retirement stage
Annual investment amount

gets reduced
Parents reach towards peak

of their earning capacity
Saving for retirement gets

minimized
Saving for investment is not

required
30
Teir I account of new pension scheme is called pension account ?
TRUE
FALSE
31
Which is false ?
Government is trying to convert

financial Asset to physical
asset
Investment in bank FD can be

transfered to loan
Investment share can be

translated into projects
Investment in MF helps the

real economic
32
Minimum Networth requirement of the AMC is
Rs 10 crore
Rs 5 crore
Rs 4 core
Rs 2 crore
SID is due within
Within 3 months of the end of

the financial Year
With 3 months from the

begining of Next financial year
Within 3 months from the end of

the next financial year
Within 6 months of the end

of the financial Year
34
Legally SAI is the part of SID
TRUE
FALSE
35
Income tax allows setting of certain types of capital gain losses against certain type of
Income which of the following is true in case of such provision.
Capital losses can be offset

again salary
Long term capital losses from

equity MF can Be offset
against long term gain from
property
Short term capital losses can be

offset against dividend income
for the year In which the loss has
occurred
Long term capital losses in

equity MF is not available
for setting of against
business or Salary income
36
The __________ is the main driver of returns in a mutual fund scheme .
Return
Profit of invested company
Portfolio
None of the above
37
Fundamental Analysis entails review of the company's
Financial Statements
Quality of Management
Competitive Position
All of the above
38
___________________ ratio indicates how much investors in the share market are
prepared to pay (to become owners of the company ) , in relation to the company's earnings
.
Earnings per Share
Price to Earnings ratio
Book Value Per Share
Price to Book Value
33
If a scheme is launched in the second six months of financial year the the 1st
update of the
Page 28
NISM Mock Test 6

39
A ____________ fund maintains a portfolio that is in line with the passive fund .
Active fund
Index Fund
Equity fund
Debt fund
40
Value investment style is an approach of picking up stocks which are valued __________ ,
based on fundamental analysis .
Lower
High
Medium
A&B
41
Which is approcach is also called stock picking .
Top down Approach
Bottom up Approach
Either A & B
None Of the above
42
If the proceeds on redemption are higher than the amount invested then it is called
__________ .
Capital Gain
Capital Loss
No Profit No Loss
None Of the above
43
Treasury Bills are short term debt instruments issued by the ____________ on behalf of
the Goverment of India .
SEBI
Reserve Bank of India
Central Government
State Government
44
Commercial papers are short term Debt Securities issued by corporates.
TRUE
FALSE
45
Credit rating companies are like _______________ .
CRISIL
ICRA
46
Higher the credit risk , lower is likely to be the yield on the debt security .
TRUE
FALSE
47
Which of the following are derivative _______________ .
Forwards
Futures
Options and swaps
All of The above
48
Every scheme should have at least __________ investors .
15
20
25
30
49
__________ funds take Positions that are countrary to the market .
Thematic Funds
Mid cap funds
Contra funds
Dividend yield funds
50
Liquid schemes, which invest in securities of up 91 days maturity , have the _________ risk
amongest all kinds of schemes .
Higher
Lowest
Zero
None of the above
51
What is MIBOR ?
Mumbai Inter Bank

Offered Rate
Money Inter Bank offered

Offered Rate
Mutual Inter Bank offered rate
Multiple Inter bank

Offred rate
52
To convert the demat units into physical from . This process is called re-materialisation .
TRUE
FALSE
53
RTGS refers to _______________ .
Real time Growth Settlement
Real Time Gross Settlement
Real Technique Gross

Settlement
Real Technique Growth

Settlement
54
What is ASBA _____________ .
Application Supported by
Blocked Account
Blocked Acknowledgement
Blocked Amount
None of the Above
55
NSE's Mutua; Fund platform is called NEAT MFSS .
TRUE
FALSE
56
When a dividend is paid , the NAV of the units falls to that extent .
TRUE
FALSE
57
Risk can be measured by
variance
Standard Deviation
58
SEBI has Facilitated buying and selling of mutual fund units through the stock exchanges.
TRUE
FALSE
59
ARN REFERS TO _____________ .
Agent registration Number
AMFI Registration Number
Page 29
A
CARE & FITCH
All of the Above
D
B
Beta
Any of the above
D
A
Application Registration Number
Account Registration
Number
NISM Mock Test 6

60
In hoardings / posters, the statement , Mutual fund investments are subject to market
risks, read the offer document carefully before investing is to be displayed at least
_________ inches height .
61
If a scheme is launched in the first 6 months of the financial year then the first update of the
SID is due with in ________ months of the end of the financial year .
62
No single investor shall account for more than 20% of the corpus of the scheme/plans.
TRUE
FALSE
63
The asset management company shall confirm that a due diligence certificate is signed by
the ____________ .
Compliance officer
Chif executive officer
Managing Director
Any of the above
64
In case of specifice request recived from investors, mutual funds shall provide the account
statement (SIP/STP) to the investor's within __________ working days from the receipt of
such request without any charges .
10
15
65
The mutual fund would update the current expense ratios on the website within _________
working days mentioning the effective date of the change .
10
66
Offer documents of mutual fund schemes are approved by SEBI .
TRUE
FALSE
67
_______________ regulates mutual funds, depositories, custodians and registrars &

transfer agents in the country .
RBI
SEBI
AMFI
All of the above
68
The objectives of AMFI is/are ____________ .
To recommend and
Promote best business
practices
To interact with the

securities and Exchange
Board of India (SEBI)
To represent to the Government,

Reserve bank of india
All of the above
69
To generate income by investing predominantly in wide range of debt and money market
securities is an objective of _________ .
Diversify equity Scheme
Diversify Debt Scheme
balanced scheme
None
70
Institutional Distributors Build Reach through
Employees
Agents
Sub Brokers
Any of the Above
71
The distributor can charge fees from the Investor
TRUE
FALSE
72
The difference between NAV and repurchase price is
Entry Load
Exit Load
Expense
Dividend Stripping
73
NAV of Income Funds is to be calculated upto _______ decimals
74
Investments in Mutual Fund can be made using
Cheque/DD
Remittance
ASBA
Any of the Above
75
STP is the combination of SIP and SWP
TRUE
FALSE
76
In a Top Down approach, sector allocation precedes stock selection
TRUE
FALSE
77
Loads and taxes may account for the difference between scheme return and investor return
TRUE
FALSE
78
Mutual Fund Ranking and rating amount to same
TRUE
FALSE
79
Which of the following aspects of portfolio would an investor in a debt scheme give more
importance
Sector Selection
Stock Selection
Page 30
Weighted Average Maturity
No of Securities in portfolio
NISM Mock Test 6

80
The comparable for a Liquid Scheme is
Equity Scheme
Balanced Scheme
Gilt Fund
Savings Bank Account
81
Providing Funds for daughter's Marraige is an example of
Goal Oriented Financial Plan
Comprehensive Financial Plan
Financial Goal
None of the above
82
Distribution phase of Wealth Cycle is a parallel of retirement phase of life cycle
TRUE
FALSE
83
Incase of NPS investor can choose which of the asset class of the following
Equity
Corporate Debt
government Securities
All of the above
84
New Pension Scheme is regulated by
PFRDA
IRDA
PFRDA+IRDA
None of this
85
What % of the total wealth of Indian People is in physical asset
More than 10%
More than 25%
More than 50%
All of the above
86
PFRDA refers to
Private Fund Regulatory and

Development Authority
Provident Fund Regulatory and

Pension Fund Regulatory and

All of the above
87
Investment in a Financial Assets can be productive for the economy
TRUE
FALSE
88
NCDEX refers to
National Contract Exchange
National Currency Exchange
89
In case of the buying of the Gold Future Contract, entire value of the Gold has to be paid
TRUE
FALSE
90
------exempted from the Wealth Tax
Gold Deposit Scheme
MF
Both A and B
None of this
91
Many investors invest money in Bank FD and not in Debt market because
Lack of Interest
Lack of awareness
Lack of Money
Lack of confidence
92
Interest earned in Bank FD is Taxable each year
TRUE
FALSE
93
The primary objective of the Financial Planner is to make available the right amount of
money at the right time.
TRUE
FALSE
94
The third stage of the wealth cycle is
Accumulation
Transition
95
In many health insurance policies, the customer has to bear the expenses and that can get
reimbursed from the Insurance company
TRUE
FALSE
96
Risk appetitte ---------- as no of dependant menber increases
Decreases
Increases
No change
Any of the above
97
Many-------have made available the risk profiling tool on their web sites
AMCs
Research Houses
Both
None of this
98
------is the decision outcome based on the market behaviour
Tactical Asset Allocation
Strategic Asset Allocation
Flexible Asset Allocation
Fixed Asset Allocation
99
Many Financial advisor work on the Model Portfolio
TRUE
FALSE
100
Which are the aspects that affect the Risk profiling of the investors?
Family Information
Financial Information
Page 31
A
National Commodity Exchange
National Conversion
Exchange
C
B
Reaping
Intergenerational Transfer
D
A
A
Personal Information
All of the above
NISM Mock Test 7

No.
QUESTION
OPTION A
OPTION B
OPTION C
OPTION D
We have to do the registration of the mutual fund with the SEBI.

Who gets registration done
Trust
R&T
Sponsor
AMC
AMFI do the following activity
Publish NAV, AUM of the fund

house and maintain and publish
industry data
Compute NAV
Manages money under
None of the above
In a liquid fund a application for repurchase comes at 3.30. Whats

is the NAV which would be available to it
Closing NAV of the date of

application
Closing NAV of the next business

day
Closing NAV of the day

preceeding the next business
day

preceesing the date of
application
In creating of model portfolio which is the first step
Deciding the Asset Allocation
Identify financial Goal
Selection of Sector
Selection of the scheme
Once the asset allocation is decided, sharpe ratio can help us to

select the good debt and equity Schemes
TRUE
FALSE
Once the asset allocation is decide, treynor ratio can help us to

select the good debt and equity schemes
TRUE
FALSE
With the increase in the regular income from the job risk taking
ability of the investor _________
Remains the same
Decreases
Increases
Insufficient data
A repurchase comes in a GILT fund at 2.30 pm. Whats would be

the NAV available to the redemption
Closing NAV of Next Business

Day
Closing NAV of the Application

Day

day

preceeding the Application date
75% investment in debt is suggested to
Aged couple with no immediate

family support
40 year old man with a family with

grown up children
Young call centre executive
Yound couple with 2 school

going kinds
10
An investor with interest to earn high return and willing to take high
risk are refferred to as
Cautious Investor
Conservative Investor
Adventurous Investor
Aggressive Investor
11
A person requires 1,00,000 rs for the specific goal after 3 years. If

we want to known what amount he needs to invest no to get the said
amount at rate of 5%. which of the following formula needs to be
used
100000*(1+0.05)^3
100000*(1+0.05)*3
100000/(1+0.05)^3
100000/(1+0.05)*3
12
For an Micro SIP which one of the following is not a valid photo ID
proof
PAN proof
Debit card with photo ID
Credit card with Photo ID
Voter ID proof
13
The responsiblity to manage funds in the new pension scheme is

with
PFRDA
Insurance Companies
AMCs
PFMs
14
Where you get the information in regards to the key personals

involved in an AMC
They are not published as it is not

very important for the investor
They are published on the website

of the mutual Fund
Available in SAI ( Statement of

Additonal Information )
15
Which of the following is not available in SID
Type of Fund
Risk Factor
Due Diligence certificate
16
Legally SAI is the part of SID
TRUE
FALSE
17
The date of the applicablity of the NAV is not dependent on
Time at which the application is

submiited
b) Scheme in which the money is

invested
Page 32
Answer
C
None of the above
D
A
The day on which the

application is submiited
The amount which is getting

invested
NISM Mock Test 7

18
The AMFI allots unique the ARN no which is valid for the period of
three years
TRUE
FALSE
19
The following would not affect the trail commission to the advisor in
mutual Fund
Portfolio value going up with the

increase in the market
Investor making fresh purchase

during the period
Change in the unit capital of the

the scheme
Investor redeeming the money

during the period
20
The STT paid on the equity mutual fund sold on the stock exchange
is
0.00125
Nil
0.0025
0.00017
21
The STT paid on th equity mutual fund purchased on the stock

exchange is
0.00125
Nil
0.0025
0.00017
22
STT paid on the re purchase of units by the AMC
0.00125
Nil
0.0025
0.00017
23
Which of the following when transacted on the stock exchange STT

is not applicable
ELSS
GOLD ETF
Index ETF
Diversified Equity Fund
24
Its is advisable for an average investor to do Tactical Asset

allocation for planning his retirement
TRUE
FALSE
25
In case of sudden wealth which among the following is least

advisable
Park the money in the liquid fund

for a short time
Invest all money into equity at one

go
26
Tactical asset allocation is suitable for seasoned investor with large

investible surpluses
TRUE
FALSE
27
An application for re purchase in equity comes at 3.30. What would

be the applicable NAV
Closing NAV of Next Business

Day
Closing NAV of the Application

Day
28
In case there is a redemption from a NRI who have invested the

money on a non repatriable basis. The mutual would pay in dollors
as redemption
TRUE
FALSE
29
The investment grow faster in dividend re investment options as

compared to the growth option because more units are added on
dividend reinvest
TRUE
FALSE
30
Maximum expense that can we charged in a debt fund is
0.0175
b) 0.75%
0.025
0.0225
31
In case of the growth option which of the following is not true
The NAV capture the full value of

the porfolio gain
There is no dividend declared
The number of units increases

over period
There is a Tax Deffereal
32
We require the board resolution from companies to invest is mutual

fund as it may not be specified in the Memorundum and Articale of
Assoiation to invest in such schemes
TRUE
FALSE
33
If the company have 10 cores if Issued shares. The profit it makes

is 105 coree. IT pays 5 crore as tax. Also pays 20 crore as dividend
what is the EPS
10
34
An investor in the debt scheme who completely want to eliminate

investment in equity should invest in MIP
TRUE
FALSE
35
The fund have an average asset of 300 crore. The portfolio turnover
for the portfolio is Rs 1000 crore. For how many months the
investment are held for
0.36
3.6
36
The floating rate fund hold on to there value even if the interest rate
are fluctuating
TRUE
FALSE
37
Performance of the fund is most sensitive to the expense ratio in

which of the following Fund
Liquid Fund
Diversified Equity Fund
Page 33
B
Start STP from liquid fund into
Equity Funds
Review the financial plan
B
A

day

preceeding the Application date
Not sufficient Data
A
B
0.25
A
ETF
Sector Fund
NISM Mock Test 7

38
Who among the following are not distributor for Mutual Funds
National Distributors
Branches of public Sector Bank
Branches of reserve bank of

India
39
Importance of credit rating agency is most important in
Equity Funds
Secutised Debt
ETF
40
Full form of AGNI
AMFI gudieline and Norms for

Intermidiary
AMFI guideline and norms for

Investment
AMFI guideline for Asset

Management Company
AMFI Guideline for Non Indians
41
Which of the following scheme is exempted from the divident

distribution Tax
Debt Oriented Funds
Balance Funds
Liquid Funds
Equity Funds
42
Sector selection is the key decision in the Bottom Up Apprach
TRUE
FALSE
43
Illiquid Shares would be valued at
Value Decided by the broker
Fair market value as the the

guidelines of SEBI
44
Tax consultant should not advice financial planning to his client
TRUE
FALSE
45
Mother want to set apart Rs 25 lakhs in 3 years time
Financial Goal
Asset Allocation
Financial Planning
Financial Desire
46
Followinf is the Asset Allocation
Dividend payout and Growth

Option
Art and Gold Fund
Growth and Value Fund
Active fund and Passive Fund
47
Limit of the commission to be paid to distributor is decided by SEBI
TRUE
FALSE
48
Whats is an NFO Investments?
Investment done by any investor in

the new Scheme
Additonal Purchase by the existing

investor
First time investment in any of

the mutual Fund Scheme
Additional Purhase by the

existing investot in another
scheme
49
Whats is true about the FMP
NAV dose fluctuate
No defaul Involve
Returns can be reasonably

predicted before the maturity
All of the above
50
SAI needs to be updated every
Yearly
Monthly
Quarterly
Half Yearly
51
Who is responsible for the information available in OD
Trustee
AMC
Sponsor
Custodian
52
Which of the following government secuity have leasr maturity

period
CD
CP
T Bills
Gilt Scheme
53
Which of the following credit rating is not required
Shor term debt Fund
Liquid Schemes
GILT Schemes
FMPs
54
Insurance is more important in case of Physical Asset Vis a Vis

financial Asset
TRUE
FALSE
55
Which of the asset have the higest risk to be stolen
Real Estate
GOLD
56
Most best way to decide the risk appetite of the person is to ask
client that how mush risk you are ready to take in the market
TRUE
FALSE
57
Share price of the Gold Mining Company is dependent on
Gold Reserve
Quality of the operation of the

company
Gold Price
All of the above
58
Expense ration is more important in case of
Offshore Fund
Equity Fund
Debt Fund
Sector Fund
59
While construction of the portfolio the relative performance is done

with
Peer Group
Asset Alllocaton
Model Portfolio
Tracking error
Page 34
Branches of Forein Banks
C
B
B
Price decided by the offmarket
Trade
None of the above
B
B
A
Mutual Fund
Bank Balance
B
B
NISM Mock Test 7

60
The balance funds based on flexible Asset Allication is lower riskier

than high yield debt fund
FALSE
TRUE
61
Between whom the Trustdeed is executed between
Trustee and Sponsor
Sponsor and Custodian
Trustee and AMC
AMC and Sponsor
62
Repurchasing the predecided no unit at the regular interval is called
STP
SWP
SIP
All of the above
63
Unclaimed investment amount and dividend can be demand by the

investor
TRUE
FALSE
64
Applicable NAV for the different scheme is as per the following time
Office time of AMC
Office time of R&T
As per the time of stock market
Cut-Off time decided by SEBI

for various MF scheme
65
While empannel with the AMC, every distributor have to provide the
following
Correct and complete information
Commitment to abide by
instruction given as also statutory
codes and guideline
Provide all information and

document that the AMC may
ask for from time to time
All of the above
66
Transaction done of MF on the NSE NEAT and BSE Start the

exchange gurantee the settlement of Funds
TRUE
FALSE
67
Low P/E ratio indicate that it is unlikely to replicate its past

performance
TRUE
FALSE
68
Churning of the portfolio by the Fund Manager is called
Portfolio Turnover Ratio
Liquidity Ratio
Annual Turnover Ration
All of the above
69
Invesment in a Real Estate Mutual Fund is
Beyond the means of the retail

investor
Extremally Liquid and cost

effedctive
Highly illiquid
Offer the benefit of both real

estate and Mutual Fund
70
Advantage of investing in PPF is
Loan is available any time
Premature withdrwal is allowable

after one year
Any amount of investment in

the scheme
Tax free return every year
71
Self Regulatory Organisation controls
All his member to the limited

extent
All his member completely
All mutual fund company
All share brokers
72
In case of Joint holder the pan card requriment for
1st and 2nd Holder
All joint holders
Only 1st Holder
Any One
73
Maximum number of nominee which can be added
74
In case New Pension scheme how many PFM( Pesion Fund

Managers) are managing the money
75
Which is the right Sequence
Liquid Fund, MIP,Gilt Fund
Gilt Fund.Liquid Fund,MIP
Diversify Debt,Gilt Fund, Liquid

Fund.
MIP ,Liquid Fund, Diversify

Debt.
76
In Lower Interest Rate Senario Debt Product of MF will Generate

higher return compared to Fixed Deposit.
TRUE
FALSE
77
An employee of the mutual Fund can be an Agent
TRUE
FALSE
78
Commission on Investment done by Sponsor in a Fund is
Not Payable
Payable to Sponsor
79
Book Value of a Share is dependent on Accounting Policies of the

company
TRUE
FALSE
80
Code of Conduct for AMC Personnel & Trustees are mentioned in
Chapter II
Chapter IV
Page 35
Payable to Distributor whose

ARN is mentioned in the
Application Form
None of the above
A
Schedule II
Schedule V ( 5th Schedule)
NISM Mock Test 7

81
If complaint of an investor is not solved by AMC, investor has to

complain to
SEBI
Trustees
Sponsor
R&T
82
Feeder Fund can invest in International Market as
Anywhere as per Investment

Objective of the Fund
Only International Equity
Only International Debt
All of the above
83
Tax Deferral is available in
Growth
Dividend
Dividend Reinvest
84
Benchmark of Sectoral Fund investing in Banking Sector would be
BSE Bankex
Nifty Junior
S&P Nifty
S&P 500
85
Before going to SEBI for approval of a Fund Launch AMC needs to
Take approval from Trustees
Print the application Form
Finalise the Launch Date
All of the above
86
Which of the Following Fund is most Sensitive to Expense Ratio
Liquid Fund
Index Fund
Equity Fund
Off shore Fund
87
ASBA is an Excellent Facility for Additional Purchase in a Fund
TRUE
FALSE
88
Converting Units of a Mutual Fund from Demat Form to Physical &

Vice Versa is Possible
TRUE
FALSE
89
Indexation means
Finalising the benchmark for the

fund
Adjusting the Purchase Price of

the Fund considering the Inflation
Considering the growth of

partcular asset class
All of the above
90
Investor in Reaping Phase would primarily invest in
Equity
Securities yielding Regular Return
Both
None of the above
91
Most of the AMC publish Portfolio of their scheme on their Website
Daily
Monthly
Six Monthly
Yearly
92
Difference between Unit Certificate & Account Statement
Unit certificate shows only the

closing balance while account
statement shows opening balance,
transactions and closing balance
There is no difference
Unit certificate is issued at the

time of NFO and account
statement are send
consecutively
Account statement shows

closing balance and unit
certificate shows opening
balance, transactions and
closing balance
93
Which of the following is not the scheme specific risk factor?
Risk arising from the schemes

objective
Risk arising from the nondiversification
No previous experience in
managing a fund
Movement in NAV because of

the market movements.
94
Expense Ratio of an Index Fund is
0.01
0.0125
0.025
0.015
95
A Financial Planner can use any of the Model Portfolio available on

the Web
TRUE
FALSE
96
In NPS Tier I account is compulsory for opening Tier II account
TRUE
FALSE
97
A Retired couple with Zero income should invest all the money in
Liquid Fund
TRUE
FALSE
98
SIP can be done by
Standing Instruction
ECS
PDCs
All of the above
99
Concentration risk is highest in
Equity Share
Bank deposit
Real Estate
Commodity
100
A high amount of equity investment is suggested to the investor if

he is in which stage ?
Accumulation phase
Transition phase
Distribution phase
No such relation with any phase

of life.
Page 36

Practice Kit - Paper 1: No. Option A Option B Option C Option D Answer

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Practice Kit - Paper 1: No. Option A Option B Option C Option D Answer

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NISM Mock Test 1

PRACTICE KIT PAPER 1

A mutual fund distributor is paid commission for..

First 5 years of Investment done

First 3 years of Investment done

First 10 years of investment done by

As long as investor held the

The guideline issued by AMFI for intermediaries are known as...

The investment in MF portfolio are valued at

Face value of portfolio

Market value of portfolio

Book value of portfolio

Exit loads are generally lower for large investors.

Time stamping arrangement is must at..

Bank distributor's branch

Offices declared as point of

SEBI has put a stop on charging ____________ to the scheme.

Unaudited accounts of the scheme must be published

through monthly fact sheet

Only at AMFI website

Once every six month in one

Only on AMC's website

10% Plus surcharge or 20% after

Which of the following is true

STT is payable when investor

STT is payable when investor

STT is payable when investor

STT is payable when investor sale

Equity share trading

All of the above

Which of the following is not required for KYC norms.

All of the above

The information on minimum investment amount, investor's service

None of the above

Which of the following document is not require to be submitted by

List of authorized signatories

Board resolution and Memorandum

SIP is a good investment strategy because..

Investor gets units at a discount to

It offers benefits of rupee cost

It helps regular income for investor

No load investment done

Relaxation from documentation requirements for micro SIP is available

NRI can not make repartition investment in MF using demand draft.

NISM Mock Test 1

An investor plans to invest Rs.12000 in a scheme whose NAV is 12 and

An investor is doing a liquid investment, fund is available and time is

Next working day

Closing NAV of Day immediately

Closing NAV of Day immediately

Investor invest 50 lakh in GILT at 3.30 pm with a local cheque. he gets

Closing NAV of day fund are

Next business day

Next preceding day.

Time stamping needs to start with serial no 1 on every business day.

Funds pay dividend in

Dividend Re-Investment option

Both of the above

Offering for repurchase, constant amounts worth of units at regular interval

A company's PE ratio may be low because it is unlikely to replicate it's

Fundamental analysts are called "Chartists"

If absolute return was 2.4% over 50 days, annualized return would

In case of equity fund, if fund has higher allocation to cash in bullish