NISM Series X-A: Investment Adviser (Level 1) Mock Test (Set 3)

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1 / 50

A retail investor in a public issue is an investor ______.

a) Who is not an institutional investor

b) Who does not have a demat account

c) Who applies for atleast 100 shares

d) Who invests not more than Rs. two lakhs

2 / 50

A U.S. citizen invested $1,000 in an Indian bank fixed deposit at a 10% interest rate for one year when the exchange rate was Rs. 45 for US$1. After a year, the rupee depreciated, and the exchange rate became Rs. 50 per USD. Did the U.S. citizen make a profit or loss?

a) Profit

b) No change

c) Loss

d) None of the above

3 / 50

Which mutual fund schemes must be officially listed on the stock exchange according to SEBI regulations?

a) All Equity scheme

b) Closed Ended schemes

c) All Debt schemes

d) Open Ended schemes

4 / 50

What among the following represents a financial goal?

a) A sizable sum needed to buy a new car in two years’ time

b) Rs.6 lakhs required for sister’s wedding

c) Rs.5 lakhs needed after two years to pay child’s tuition fees

d) Rs. 10 lakhs needed for purchasing a flat

5 / 50

If the US Dollar-Rupee exchange rate changes from 43.00 to 43.30, the US Dollar has __________ and the Rupee has ___________.

a) Appreciated, Strengthened

b) Appreciated, Depreciated

c) Depreciated, Weakened

d) Depreciated, Appreciated

6 / 50

Assuming a constant growth rate in a stock’s dividend, what would be the intrinsic value of the stock given D1 = Rs. 3, k = 9%, and g = 6%?

a) Rs. 95

b) Rs. 105

c) Rs. 110

d) Rs. 100

7 / 50

Which of the following is/are types of accounts in Portfolio Management Services (PMS)?

a) Non-discretionary portfolio management

b) Advisory services

c) Discretionary portfolio management

d) All of these

8 / 50

What does a fundamental analyst study among the following?

a) Companys financials

b) Competitive position in industry

c) Companys management

d) All the above

9 / 50

9. A company with an equity capital of Rs.50 crores generates a gross profit of Rs.100 crores and a net profit after tax of Rs.50 crores. If the market price of its equity share is Rs.100, what will be its P/E ratio.

a) 5

b) 50

c) 20

d) 10

10 / 50

10.

SEBI does not deal with any complaints which fall under the purview of the other regulatory bodies i.e. IRDA , PFRDA etc. State whether True or False.

a) True

b) False

11 / 50

11.

If the strike price is more than the market price of the underlying, the call option is said to be “out of the money.”

a) In The Money option

b) Out of The Money option

c) At The Money option

d) None of the above

12 / 50

12.

The interest rate risk in a debt fund depends on

a) The tenor of securities

b) The coupon of the securities

c) The credit quality of the portfolio

d) None of the above

13 / 50

13.

Sachin, who is currently 25 years old, has an annual expenditure of 2 lakhs. If inflation is 6% for the first 10 years, 7% for the next 15 years, and 5% for the following 5 years, calculate his expenditure at the age of retirement (55 years) with an 80% replacement.

a) Rs.3026934.70

b) Rs.4326934.70

c) Rs.1008978.23

d) Rs.3326934.70

14 / 50

14.

An investment adviser must act in a fiduciary capacity toward its clients and must disclose all conflicts of interests.

a) False

b) True

15 / 50

15.

Market price of a company is Rs. 230. Profit after tax is Rs. 240 crs. Number of shares issued by the company is 10 crs. Calculate Price to Earnings ratio.

a) 9.88

b) 9.58

c) 10.48

d) 10.18

16 / 50

16.

A retired person is depending on a monthly annuity income to finance his expenses. The greatest risk faced by his cash flows is

a) Exchange rate risk

b) Inflation risk

c) Business risk

d) Interest rate risk

17 / 50

17. Under the Investment Adviser Regulations, 2013 notified by SEBI, which of the following has not been considered as one of the eligibility criteria for investment advisers.

a) Capital Adequacy requirement

b) Eligible Qualification and Certification

c) Registration with Financial Intermediaries

d) Infrastructure

18 / 50

18.

What are the variables that influence the risk in a portfolio?

a) Weights of Investments

b) Risk of Investments

c) Co-movement between Investments

d) All of the above

19 / 50

19.

Which of the following regulatory bodies decides the SLR and CRR rates?

a) Securities and Exchange Board of India

b) Competition Commission of India

c) Insurance and Regulatory Authority of India

d) Reserve Bank of India

20 / 50

20.

Which statement about a callable bond is true?

a) Callable bonds always trade at a discount to non-callable bonds.

b) Callable bonds are actually variable tenor bonds.

c) Callable bonds are not as liquid as non-callable bonds.

d) Callable bonds expose issuers to the risk of reduced re-investment return.

21 / 50

21.

What practices are considered unhealthy in the securities markets among the following?

a) Surveillance

b) Disclosure

c) Insider Trading

d) Transparency

22 / 50

22.

In the currency market, what is the settlement or value date for a spot transaction?

a) Trade Date + 1

b) Trade Date

c) Trade Date + 3 or any later date

d) Trade Date + 2

23 / 50

23.

Before moving to Australia, Simran has officially authorized Sameer to act on her behalf in all matters. What type of Power of Attorney (POA) has Simran chosen?

a) Specific POA

b) General POA

c) Limited POA

d) None of the above

24 / 50

24.

What is one advantage that institutional investors bring to the financial markets among the following?

a) Better ability to source and analyse information relevant to a security

b) Greater accountability since they invest own funds

c) Lower concentration of holding in a few investors

d) All of the above

25 / 50

25.

A person has filed a complaint against an entity on SCORES. The concerned entity is required to respond to this complaint within _______.

a) 30 days

b) 45 days

c) 10 days

d) 15 days

26 / 50

26.

A dynamic portfolio management strategy that adjusts the allocation of assets in different categories to capitalize on market fluctuations or strong sectors is known as ________.

a) Strategic

b) Fixed Asset Allocation Strategy

c) Tactical

d) None of the above

27 / 50

27.

Which of the following is ranked last, both in terms of profit sharing and receiving liquidation proceeds?

a) Lenders

b) Government Creditors

c) Employees

d) Equity Shareholders

28 / 50

28.

What distinguishes Mutual Funds, Alternative Investment Funds, and Portfolio Management Schemes from each other?

a) Only institutional investors can invest in Alternative investment funds and Portfolio Management schemes while a common man can invest in Mutual Funds

b) Alternative investment funds and Portfolio Management schemes are regulated by RBI whereas Mutual Funds are regulated by SEBI

c) The minimum amount to be invested in Alternative investment funds and Portfolio Management schemes is very high as compared to Mutual Funds

d) All of the above

29 / 50

29.

The present value of a sum of money _______ as the discounting rate _______.

a) Remains same, Increases

b) Increases, Increases

c) Decreases, Decreases

d) Increases, Decreases

30 / 50

30.

Who is considered a ‘Ward’ under the Guardians and Wards Act?

a) A minor for whose person or property or both there is a guardian.

b) The Collector of the district or other local area within which the minor ordinarily resides or in which he has property

c) A person having the care of the person of a minor or of his property or of both his person and property

d) Any relative or friend of the minor

31 / 50

31.

If you start with Rs. 100 today and after three years it becomes Rs. 115.76, what is the interest rate?

a) 7%

b) 4%

c) 5

d) 6%

32 / 50

32.

Bond calling feature _______

a) Is against the interest of issuers

b) Favours investors

c) Is most prevalent when interest rates are expected to rise

d) Is most prevalent when interest rates are expected to fall

33 / 50

33.

What shows that someone owes money?

a) Solvency Ratio

b) Expenses Ratio

c) Leverage Ratio

d) Net Worth

34 / 50

34.

Commercial Paper can be issued for periods ranging from at least 7 days to a maximum of one year from the date it is issued.

a) True

b) False

35 / 50

35.

The entity that sends certificates for dematerialization, along with the Demat Request Form (DRF), is:

a) Issuer/its R and T Agent

b) NSDL/CDSL

c) Both of the above

d) None of the above as the DP directly gives an electronic credit to the investor

36 / 50

36.

Mr. Vijay invested Rs. 6,800 at the start of each quarter at an annual interest rate of 10%, compounded quarterly, for 12 years. What is the future value of his investment?

a) Rs.112651

b) Rs.633292

c) Rs.258230

d) Rs.351643

37 / 50

37.

An investor bought mutual fund units at a Net Asset Value (NAV) of Rs. 10. After 400 days, she sold them for Rs. 13.50. What is the compounded rate of return?

a) 28%

b) 32.50%

c) 31.50%

d) 35%

38 / 50

38.

What are the main features of Sovereign Gold Bonds (SGBs)?

a) Denominated in grams of gold

b) Redeemed at the market price

c) Issued by RBI on behalf of Government of India (GoI)

d) All of these

39 / 50

39.

Mr. Khanna needs Rs. 10 lakhs for his son’s admission fees in six months. What would be a suitable investment to save for this goal?

a) Short term debt fund

b) Real estate

c) Long term corporate bond

d) Equity shares of high-growth companies

40 / 50

40.

Which statement is false?

a) Standard deviation measures the fluctuations of a funds returns around a mean level

b) Beta of less than one means that the fund is more volatile than the market

c) Beta Greater than one means that the fund is more volatile than the market

d) Variance is the Square of Standard Deviation

41 / 50

41.

What are the factors that influence the interest rate?

a) Government borrowings

b) Inflation rate

c) Supply of money

d) All of the above

42 / 50

42.

Mr. Verma, who is 30 years old and earns Rs.50,000/- per month, wants to save 40% of his half-yearly salary at the beginning of each year. Assuming his salary increases by 12% annually and the rate of interest is 15% per annum, what will be his total savings at the age of 45?

a) Rs.12252081

b) Rs.11932461.5

c) Rs.10653983.48

d) Rs.24504162

43 / 50

43.

The most crucial factor for an investment plan to reach its intended goal is:

a) Choosing the asset class giving best returns

b) Choosing the best investment product

c) Managing investment portfolio through tactical asset allocation

d) Choosing an asset allocation appropriate to one's situation

44 / 50

44.

Person to whom a Power of Attorney is given is called________and who gives it is called_______.

a) Bailor-Bailee

b) Debtor-Creditor

c) Donor-Donee

d) Pawner-Pawnee

45 / 50

45. Which of the following statements about Gold ETFs are accurate and applicable for investment planning according to your advice?

Gold ETFs offer similar returns to physical gold, but without incurring making charges.
Gold ETFs provide a Nomination Facility, and long-term capital gains become applicable after 3 years.
No payment to stock brokers is required when buying Gold ETF units since SEBI has banned Entry Load.
Gold ETFs help avoid issues related to the purity of gold, storage, and insurance costs.

a) 1, 2 and 4

b) 2 and 4

c) 1 and 2

d) 2 and 3

46 / 50

46.

What items among the following can undergo dematerialization?

a) Securitised Debt

b) Rights under collective investment schemes

c) Unlisted Securities

d) All of the above

47 / 50

47.

In a jointly held folio, PAN and KYC procedures must be adhered to by:

a) The first holder only

b) The joint holders depending upon mode of operation

c) All the joint holders

d) Any one of the joint holders

48 / 50

48.

What is the definition of a risky asset?

a) An asset which has no uncertainty of return

b) An asset which has any degree of uncertainty of return

c) An asset which has high degree of uncertainty of return

d) An asset which has low degree of uncertainty of return

49 / 50

49.

SEBI Complaints Redress System (SCORES) facilitates the processing of investor complaints against listed companies.

a) False

b) True

50 / 50

50.

Financial system intermediaries encompass:

a) Investors only

b) Banks, Custodians, RBI, SEBI only

c) Corporate only

d) Banks, Custodians, Stock Exchanges, Depositories

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NISM Series X-A: Investment Adviser (Level 1) Mock Test (Set 3)