NISM Series X-B: Investment Adviser (Level 2) 'Final Test'

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NISM Series X-B: Investment Adviser (Level 2) ‘Final Test’

1 / 120

What is accurate when it comes to the liquidation of a company?

a) All the liabilities are paid off first

b) Such distribution of assets not treated as transfer for capital gains

c) Remaining assets are distributed among the equity shareholders

d) All of these

2 / 120

An active portfolio management strategy that adjusts the proportion of assets held in different categories to capitalize on market fluctuations or robust market sectors is known as what?

a) Strategic

b) Fixed Asset Allocation Strategy

c) Tactical

d) None of the above

3 / 120

In the case of ULIP, insurers are required to furnish Benefit Illustrations presenting two interest rate scenarios: one at ______ and another at _______.

a) 4% and at 10%.

b) 4% and at 8%.

c) 6% and at 8%.

d) 6% and at 10%.

4 / 120

Raghuveer sold some units of a Debt Mutual Fund scheme. What is the amount of Security Transaction Tax he is required to pay?

a) 0.25%

b) 0.03%

c) 0.13%

d) NIL

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Unlisted Zero Coupon Bonds are treated as a long-term capital asset if they are held for _____ months.

a) 12

b) 36

c) 32

d) 24

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The principle of _____________ ensures that an insured does not gain an advantage by insuring with multiple insurers.

a) Co-insurance

b) Subrogation

c) Utmost Good Faith

d) Contribution

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The limitation in the active choice of NPS is that the proportion invested in alternative investment products shall be a maximum of ________.

a) 10%

b) 12%

c) 8%

d) 5%

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The premium for a ULIP is higher than that for a term policy with the same sum assured because ___________.

a) A portion of the premium is used for investment

b) The period of cover is shorter

c) The risk is higher

d) The pool of insured is smaller

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In this scenario, where a Car Insurance Policy has a deductible of Rs. 1,000 and a co-pay of 10%, the insurance policy will pay _________.

a) Rs 40,000

b) Rs 35,000

c) Rs 39,000

d) Rs 35,100

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10.

The primary aim of the guaranteed insurability rider benefit is to provide the policyholder with the right to ___________.

a) cancel a health-based exclusion after a symptom-free period

b) include his parents under the policy

c) increase cover when a key life event occurs without any Medical Examination

d) maintain cover despite a fall in investment value

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11. What is a necessary condition for a risk to be considered insurable?

a) Small number of exposure units

b) Loss must be non-accidental

c) Loss can be indeterminable

d) Loss must be fortuitous and unintentional

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12.

EMI for a loan can be calculated using the _________ function in MS Excel.

a) PMT

b) PV

c) EMI

d) NPV

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13. Arun’s taxable annual income is Rs. 15 lakh. He is informed that the interest income of Rs. 50,000 from his bank deposits will be taxed at the marginal rate applicable to him. What is the applicable tax rate for Arun?

a) 20%

b) 10%

c) 40% Since the total income exceeds 15 Lakhs

d) 30%

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14.

In a critical illness rider, the benefit is payable at the time of ______.

a) Producing the medical bills

b) Diagnosis of the illness

c) Death of the life insured

d) Discharge from the hospital

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15.

The clubbing provision does not apply in the case of Family Settlements.

a) False

b) True

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16.

The period when the annuitant receives the payments is known as the _____________.

a) Accumulation Phase

b) Transition Phase

c) Distribution Phase

d) None of the above

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17.

In the case of the Post Office Monthly Income Scheme, the maximum investment amount is _______ for a singly held account.

a) Rs. 3.5 lakhs

b) Rs. 4.5 lakhs

c) Rs. 2.5 lakhs

d) Rs. 5.5 lakhs

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18.

For a non-resident, which of the following is NOT subject to taxation?

a) Income accrues or arises or is deemed to accrue or arise in India

b) Income received or is deemed to be received in India

c) Income accrues or arises outside India if it is derived from a business controlled in India or from a profession set up in India

d) None of these

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19.

Life insurance, insurance for the maintenance and replacement of plant and machinery, and annuities are all examples of insurance products designed to fulfill which of the following needs?

a) Asset Protection needs

b) Income Protection needs

c) Job Protection needs

d) Income Replacement needs

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20.

To avail the benefit of section 54, the asset transferred should be ____________ , specifically a residential house property.

a) Long-term capital asset

b) Short-term or long-term capital asset as per the choice of the assessee

c) Short-term or long-term capital asset as per the choice of the Assessing Officer

d) Short-term capital asset

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21. Which of the following is/are key features of Sovereign Gold Bonds (SGBs)?

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

b) Redeemed at the market price

c) Denominated in grams of gold

d) All of these

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22. Which of the following statements about reverse mortgage is not true?

a) The rate of interest and the nature of interest (fixed or floating) will be decided by the lender

b) All receipts under RML shall be taxable under Section 10(43) of the Income-tax Act, 1961

c) The Reverse Mortgage loan can be prepaid at any time during the currency of the loan

d) The residual life of the property should be at least 20 years

23 / 120

23.

___________ are eligible to lend and borrow under the SLB (Securities Lending and Borrowing) scheme.

a) Securities traded in the F and O segment

b) Collective investment schemes

c) Liquid index exchange traded funds

d) Both 1 and 2

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24.

Critical Illness policy is a:

a) Indemnity policy

b) Benefit policy

c) Both indemnity and benefit policy

d) Neither of the two

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25.

Sumeet, who is 25 years old and plans to retire at 55, has a life expectancy of 75. His current annual expenditure is Rs. 250,000, and he expects no reduction in expenses post-retirement. Assuming an interest rate of 8.5% and an inflation rate of 5% per annum, estimate the amount he needs to save annually to achieve his target, given that he does not wish to leave an estate.

a) Rs. 1,20,963

b) Rs. 1,25,054

c) Rs. 1,19,568

d) Rs. 1,17,154

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26.

All receipts under Reverse Mortgage Loan (RML) shall be exempt from income tax under ________ of the Income Tax Act, 1961.

a) Section 34(16)

b) Section 45(27)

c) Section 10(43)

d) Section 21(35)

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27.

If the contribution to NPS is made by the employee, the maximum deduction of _______ of the salary shall be allowed under section 80CCD of the Income Tax Act.

a) 18%

b) 10%

c) 12%

d) 15%

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28.

Behavioral finance differs from the standard model of finance because it:

a) Accepts the Efficient Markets Hypothesis.

b) recludes the impact of investor psychology

c) Rejects the idea of market anomalies

d) Includes the impact of investor psychology

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29.

What impact does inflation have on retirement planning?

a) Reduces the periodic savings required b) Reduces the nominal return generated by

b) Increases the retirement corpus required

c) Increases the value of the corpus created

d) Reduces the nominal return generated by an investment

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30.

Insurance aids in:

a) Reduce the consequences of adverse situations

b) Ensure that assets never breakdown

c) Guarantee that assets are always productive

d) All of the above

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31.

Which of the following is an example of an Indemnity Policy?

a) Car Insurance

b) Critical Illness Policy that pays a lump sum on occurrence of specified critical Illnesses

c) Daily Hospital Cash benefit allowing a specified sum per day of hospitalisation

d) Life Insurance

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32.

When the assessee is a Foreign Portfolio Investor (FPI), interest on rupee-denominated bonds of an Indian Company is chargeable to tax at the rate of:

a) 15 percent

b) 20 percent

c) 10 percent

d) 5 percent

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33.

Who can be the beneficiaries in life insurance brought under the Married Woman’s Property Act of 1874?

a) The child/children alone (both natural and adopted)

b) Wife and children together or any of them

c) The wife alone

d) All of the above

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34.

Withdrawal from a National Pension Scheme (NPS) Tier I account is _____________ until the age of 60.

a) Partially Allowed upto 40%

b) Partially Allowed upto 60%

c) 20% can be withdrawn and 80% should be converted into annuity

d) Not Allowed at all

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35.

Commission received from business is considered part of income from ________.

a) Business and profession

b) Salary

c) Capital Gains

d) Other sources

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36.

Section 80TTB of the Income Tax Act allows Senior Citizens a deduction of up to _______ from gross total income for interest earned on bank deposits.

a) Rs. 25,000

b) Rs. 75,000

c) Rs. 50,000

d) Rs. 45,000

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37.

A scheme under which the company grants options (a right but not an obligation) to an employee to apply for shares of the company at a predetermined price is known as ____________.

a) Equity shares

b) Sweat Equity

c) Employees Stock Option Scheme (ESOS)

d) None of the above

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38.

A will certified by the court is called a _______.

a) Probate

b) Codicil

c) Oral Will

d) Holographic Will

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39.

An RML (Reverse Mortgage Loan) becomes due and payable only when the last surviving borrower dies or permanently moves out of the house.

a) True

b) False

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40.

Mr. Sachin, aged 30, aims to retire at 45, maintaining his current living standard with an annual expenditure of Rs. 500,000. He anticipates living up to 75. Assuming inflation at 5% and expected returns at 7% p.a., what is the real rate of return?

a) 2.05

b) 2.15

c) 1.75

d) 1.90

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41.

A standard deduction of _______ is permitted from salary income.

a) Rs 1000 per month

b) Rs 30,000

c) Rs 40,000

d) Rs.50,000

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42.

The number allotted in NPS is _______.

a) Personal Retirement Account Number

b) Personal Pension Account Number

c) Permanent Pension Account Number

d) Permanent Retirement Account Number

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43.

If the NPS subscriber’s grievance is not resolved within 30 days from the submission to the NPS Trust, then the subscriber can appeal to the _________.

a) Ombudsman

b) NPS Trustees

c) SEBI

d) NPS Trustees

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44.

Which of the following is influenced by the market?

a) Investor risk profile

b) Tactical asset allocation

c) Strategic asset allocation

d) Optimal Asset Allocation

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45. A person who prepares the Will is called a/an _______.

a) Testator

b) Executor

c) Deceased

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46.

Pension received from the former employer is classified under the head __________.

a) Income from Salaries

b) Income from capital Gain

c) Income from other sources

d) Gratuity

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47.

What is the maximum limit or the government-notified amount of gratuity payable as per the Act?

a) Rs 3,50,000

b) Rs 20,00,000.

c) Rs 5,00,000

d) Rs 10,00,000

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48.

The premise of Prospect Theory is:

a) People are risk-averse about gains (realizing it early) but risk seeking about losses (holding to them longer)

b) Monetary losses hurt more than monetary gains

c) Choices are evaluated relative to a reference point (which is their wellbeing);

d) All the above

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49.

How does pure risk differ from speculative risk?

a) A pure risk can be measured in probability terms whereas a speculative risk cannot

b) A pure risk is not subject to regulatory control but a speculative risk always is

c) A pure risk always has an environmental cause whereas a speculative risk always involves human Error

d) A pure risk only leads to the possibility of a loss, whereas a speculative risk may lead to a gain

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50.

Which statement is correct when it comes to offsetting losses?

a) Short term capital loss can be set off against short term or long term capital gain

b) Long term capital loss can only be set off against long term capital gain

c) Capital loss, short term or long term, cannot be set off against any other head of income

d) All of the above

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51.

_____________ is the decision that comes out of calls on the likely behavior of the market.

a) Tactical Asset Allocation

b) Strategic Asset Allocation

c) Risk Profiling

d) Fixed Asset Allocation

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52.

What is meant by Risk Appetite?

a) Its the level of risk the investor should take based on his age

b) Its the level of risk the investor should take to achieve his financial goals

c) Its the level of risk the investor is comfortable with

d) Its the proportion of the investors portfolio in risk instruments like shares

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53.

Which of the following is a Defined Benefit Policy?

a) Health Insurance policy for reimbursement of expenditure incurred in hospitalisation

b) Property Insurance to pay for losses caused due to fire, earthquake, flood, etc.

c) Car Insurance

d) Daily Hospital Cash benefit allowing a specified sum per day of hospitalisation

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54.

If an investment gives tax advantages when deposited and withdrawn, but the returns are taxable, it falls under the category of _______.

a) EET

b) TTE

c) ETE

d) EEE

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55.

The deduction from Gross Total Income under section 80E for the Principal amount paid on an Educational Loan is __________.

a) 45,000

b) 50,000

c) 40,000

d) No Deduction Available

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56.

How much is the maximum amount an individual can save in different investment instruments under Section 80C to qualify for a deduction from taxable income in an Assessment Year?

a) Rs. 2,50,000

b) Rs. 1,25,000

c) Rs. 1,15,000

d) Rs. 1,50,000

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57.

Under which section of the Income Tax Act, will the inter-corporate dividend be deducted from the total income of the company if it is distributed to shareholders on or before the due date?

a) Section 45A

b) Section 72D

c) Section 80M

d) Section 63C

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58.

Under which of the following circumstances will the insured not be covered by insurance?

a) Paid-up policy

b) Surrendered policy

c) Term policy

d) Both A and B

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59.

What is the minimum required investor contribution in an AIF (Alternative Investment Fund) scheme?

a) Rs. 1 crore

b) Rs. 20 crore

c) Rs. 2 crore

d) Rs. 10 crore

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60.

Is it necessary to subtract unrealized rent when calculating the Net Annual Value of a property?

a) True

b) False

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61.

Can one obtain a reverse mortgage loan using a commercial property as collateral?

a) False

b) True

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62.

Which of the following statements about the expense protection method is not correct?

a) The concluding amount indicates the corpus required by the person upon retirement which should be able to generate regular income equal to the expenses so arrived at

b) This method does not account for inflation

c) In this method, monthly/annual expenses of the person (just before retirement) are estimated

d) In many cases, the monthly/annual expenses required by the person on retirement is taken as a percentage of the monthly/annual expenses of that person just before retirement

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63.

The rebate is not applicable under ________ for income tax payable on long-term capital gains covered under section 112A of the Income Tax Act.

a) Section 87A

b) Section 17D

c) Section 42B

d) Section 23C

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64.

A __________ policy protects the employer from losses caused by forgery, fraud, or dishonest acts committed by an employee.

a) Liability Insurance

b) Keyman Insurance

c) Fidelity Insurance

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65.

Identify the correct statement: (i) The risk appetite of a family increases as the number of earning members increases. (ii) Risk appetite decreases as the number of dependent members increases. (iii) Risk appetite is higher when life expectancy is longer. (iv) Well-qualified and multi-skilled professionals can afford to take more risk.

a) (i) and (iii) are correct

b) (i) and (ii) are correct

c) (ii) and (iv) are correct

d) (i) (ii) (iii) and (iv) are correct

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66.

It would be safer to invest in __________ if it is anticipated that market interest rates will rise.

a) Short term debt funds

b) 10 Year Government Securities Fund

c) Long term debt funds

d) Medium Term Debt Funds

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67.

The long-term capital gain exceeding ______ will be taxable if it arises from the transfer of securities, specifically equity shares.

a) Rs. 2.5 lakhs

b) Rs. 2 lakhs

c) Rs. 1 lakh

d) Rs. 5 lakhs

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68.

What does the term “Probate” mean?

a) It’s a process of registration of Will

b) It’s an Execution of Will under court order

c) It’s a special type of trust

d) None of the above

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69.

Stock-in-trade held for the purposes of business or profession is considered a part of capital assets.

a) True

b) False

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70.

What is the disadvantage of earning a fixed return from an investment?

a) The returns may be different from what is expected

b) The possibility of default is high

c) There is no disadvantage in earning a fixed return

d) The return does not go up to reflect better performance or higher rates in the market

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71.

A Critical Illness policy alleviates financial strain by providing _______ upon the diagnosis of a covered condition.

a) Reimbursement of actual cost

b) Health Care Services in International Speciality Hospitals

c) Lumpsum Payment

d) Daily Cash Allowance

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72.

Which of these is NOT necessary when estimating expenses in retirement using the Expense Protection method?

a) Current Household expense

b) Rate of return on investments

c) Rate of inflation

d) Years to retirement

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73.

Which of the following statements is/are correct regarding Tier I accounts of NPS?

a) 60% of amount withdrawn can be taken in lump sum and balance 40% of is to be used for purchase annuity from Life Insurance Company.

b) In case the subscriber withdraws funds before 60 years of age, 80% of the savings must be used purchase the annuity and balance 20% can be withdrawn in lump sum.

c) The funds in the Tier I account can be withdrawn only on attainment of 60 years of age.

d) All of the above

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74.

Short-term capital gains from Equity Mutual Funds are subject to a tax rate of 20% plus surcharge.

a) True

b) False

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75.

A person seeking additional protection for serious illnesses alongside life insurance coverage may opt for which rider?

a) Accidental death

b) Critical illness

c) Guaranteed insurability

d) Waiver of premium

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76.

In January 2014, Mr. Rahul sold his residential house property, which was bought in May 2013, resulting in a capital gain of Rs. 8,40,000. Since the house property is a short-term capital asset, the gain of Rs. 8,40,000 will be taxed as short-term capital gain.

a) False

b) True

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77.

In a specific financial year, Dr. Mahinder’s portfolio earned a return of 18.5%. To determine the actual return after tax and inflation, considering an inflation rate of 5% and a tax slab of 30%, he wants to know the approximate figure.

a) 9.50%

b) 7.95%

c) 12.95%

d) 7.57%

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78.

A _______ is a contract that grants the holder the right to buy or sell the underlying security at a predetermined price within a specific period.

a) Forward contract

b) Options contract

c) Futures contract

d) Swap contract

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79.

When Mr. X, who was an NRI, becomes a resident, identify the correct proposition regarding the Mutual Fund Investments made during his NRI status.

a) Address has to be changed

b) Bank account details has to be changed

c) KYC status should be changed to resident

d) All of the above

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80.

Raj, who served for 35 years and 2 months with a company under the Payment of Gratuity Act, 1972, received a gratuity amounting to Rs. 12.57 lakh. At the time of retirement, his monthly basic salary was Rs. 36,000, and dearness allowance was Rs. 22,500. What portion of his gratuity will be taxable?

a) Rs. 75,750

b) Rs. 5,30,077

c) Rs. 2,33,250

d) Nil

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81.

Mira, aged 30, is planning for retirement. She saves Rs. 15,000 per year (at the year end) in a bank fixed deposit earning 8.25% p.a., compounded annually until she retires at age 58. Her life expectancy is 80 years. What will be her retirement corpus, and what is the fixed annual amount she can withdraw at the beginning of each year until age 80 if she wants to use up her entire corpus?

a) 1424894, 89458

b) 1348974, 87498

c) 1491655, 91613

d) 1491655, 137767

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82.

Mr. Chatterji takes out a policy to fund his son’s education when the son turns 18. Unfortunately, Chatterji dies in an accident after paying 5 years of premiums. Which rider ensures that the policy remains in force without the need for further premium payments, ensuring the intended benefits are retained?

a) By taking Waiver of Premium Rider

b) Guaranteed Insurability Rider

c) By taking Accident Death Benefit Rider

d) None of the above

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83.

What is NOT included in the definition of a Capital Asset?

a) Raw Materials for Business or Profession

b) Leasehold Right

c) Immovable Property

d) None of these

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84.

What event among the following would lead to a rebalance in the retirement accumulation portfolio?

a) An expected rally in an asset class

b) A change in the investor's risk and return preferences

c) As a long term portfolio it should not be altered

d) To include the best performing investment based on current performance

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85.

Devang wants to understand how a property would be distributed if a person dies intestate and the significance of Estate Planning. According to you, which of the following is not suitable in Estate distribution when a person dies intestate?

a) A Succession Certificate is applicable when there is no valid Will.

b) Legal Heirs will apply to the civil court for grant of a Succession Certificate.

c) ALaw of Inheritance is applicable in Estate distribution.

d) Legal Heirs get Estate rights on the basis of probate

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86.

In which of the following categories of Mutual Funds, does the fund manager play a crucial role?

a) Actively Managed Funds

b) Passive Funds

c) Gold ETF

d) Bond Index Funds

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87.

The securities backed by assets that represent a claim on repayments made by home loan borrowers are known as _______.

a) Asset pledge–backed securities

b) Hypothecation–backed securities

c) Mortgage–backed securities

d) Either 1 or 2

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88. Question: In the context of legal arrangements for handling transactions on behalf of Umang’s brother-in-law, which option represents the appropriate and recommended course of action?

a) Umang should prepare a General Power of Attorney that gives him the right to do transactions on behalf of his brother in law.

b) Umang's brother in law should prepare a Notarized affidavit in Umang's favour.

c) Umang should not get into such an arrangement due to complex tax laws related to NRI Investments.

d) Umang's brother in law should prepare a Special Power of Attorney specifying transactions that can be carried out by Umang.

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89.

Daniel Kahneman and Amos Tversky (1979) introduced the concept of _________.

a) Prospect theory

b) Mental accounting theory

c) Modern portfolio theory

d) Capital market theory

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90.

Property insurance does not cover _______________.

a) Valuables such as jewellery and art and antiques typically require an add-on or separate insurance policy.

b) Fire

c) Theft

d) Loss/damage due to wear and tear

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91.

A Real Estate Investment Trust (REIT) may have the following types of income ________.

a) Capital gains from the transfer of real estate property

b) Rental income from real estate property

c) Dividend and Interest received from SPV

d) All of these

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92.

_______ refers to an insurance broker who solicits and arranges reinsurance for clients/insurance companies with multiple insurers and/or reinsurers located in India and/or abroad, and/or provides claims consultancy, risk management services, or other similar services.

a) Composite Broker

b) Corporate Agent

c) Reinsurance Broker

d) Direct Broker

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93.

The preference shareholders would carry a preferential right to _________.

a) Payment of dividend

b) Repayment in the case of a winding-up

c) Voting rights

d) Only 1 and 2

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94.

Which of these is considered a person according to the Income-tax Act, 1961?

a) Hindu undivided family (HUF)

b) Local authority

c) Company

d) All of these

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95.

Under Employee Stock Option Plans (“ESOPs”), employees get the right to purchase a certain number of securities at a ___________ price.

a) Premium price

b) Face value

c) Less than face value

d) Discounted price

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96.

Real Estate Investment Trust (REIT) may have the following types of income:

a) Capital gains from the transfer of real estate property

b) Rental income from real estate property

c) Dividend and Interest received from SPV

d) All of these

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97.

If the tax payable by a company is less than ___________ of the book profit, then it is liable to pay minimum alternate tax.

a) 10%

b) 25%

c) 15%

d) 20%

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98.

Which of the following statements is TRUE regarding the tax structure on the income received from a Reverse Mortgage Scheme?

a) Income received under the Reverse Mortgage Scheme is exempt to the extent of Rs 25000 per month

b) Income received under the Reverse Mortgage Scheme is exempt to the extent of interest paid on outstanding mortgages

c) Income received under the Reverse Mortgage Scheme is tax free

d) Income received under the Reverse Mortgage Scheme is fully taxable

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99.

In the case of NPS, _______ of the accumulated value at the time of retirement is tax-exempt.

a) 70%

b) 60%

c) 40%

d) 50%

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100.

Long-term capital gain from the sale of shares is ____________________.

a) Taxed at 10% for the gains exceeding 1 Lakh

b) Taxed at 20%

c) Exempt from tax

d) Taxed at 15% with indexation

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101. Life insurance, insurance for the maintenance and replacement of plant and machinery, annuities, are all examples of insurance products that serve

a) Income Replacement needs

b) Income Protection needs

c) Asset Protection needs

d) Job Protection needs

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102. To avail the benefit of section 54, the asset transferred should be ____________,being a residential house property.

a) Short-term capital asset

b) Long-term capital asset

c) Short-term or long-term capital asset as per the choice of the assessee

d) Short-term or long-term capital asset as per the choice of the Assessing Officer

103 / 120

103. _______ are eligible for lending and borrowing under the SLB scheme.

a) Securities traded in the F&O segment

b) Liquid index exchange traded funds

c) Collective investment schemes

d) Both 1 & 2

104 / 120

104. Critical Illness policy is a:

a) Indemnity policy

b) Benefit policy

c) Both indemnity and benefit policy

d) Neither of the two

105 / 120

105. Sumeet, aged 25 plans to retire at age 55. His life expectancy is 75. His current annual expenditure is Rs.250000. He estimates no reduction in his expenses post-retirement. If interest rate is expected to be 8.5% and inflation is 5% p.a. estimate how much will he have to save per annum in order to achieve his target, provided he does not wish to leave an estate.

a) Rs. 119568

b) Rs. 125054

c) Rs. 117154

d) Rs. 120963

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106. In case the accumulated corpus at the time of exit (Exit and Withdrawal on retirement) is equal or less than _________, the NPS subscriber will have the option to withdraw the entire corpus in lumpsum.

a) Rs.5 lakhs

b) Rs.2 lakhs

c) Rs.3 lakhs

d) Rs.1 lakh

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107. Any losses arising out of the transfer of short term capital assets can be set off against:

a) Only short term capital gains

b) Only against long term capital gains

c) Both short & long term capital gains

d) None of the above

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108. The amount of human life value is calculated by properly discounting the

a) Current earnings of the insured

b) Fraction of the income of the insured that is used for the dependents

c) Saving potential of the insured

d) Potential of consumption expenditure of the insured

109 / 120

109. A client explains that she only wants an insurance policy that will cover her family against financial risk over the next five years, while she still has dependent children and a large mortgage. It is unlikely her income will increase over this period. What type of insurance is she looking for?

a) An unit linked insurance plan

b) Money back policy

c) Term insurance with a level premium

d) Term insurance with a stepped premium

110 / 120

110. Surinder had taken a 25-year life insurance policy with a sum assured of Rs. 1,000,000 with the premium being paid in a half-yearly mode. After paying the premium for five years, Surinder is unable to continue paying the premium payment. What happens to the policy?

a) Insurance Company will cancel the policy automatically and return premium paid

b) Insurance Company will cancel the policy automatically and return premium paid with interest

c) Insurance Company will readjust the Sum Assured to the Paid Up value

d) Insurance Company will force Surinder to Surrender the policy

111 / 120

111. If Interest rates falls, Reinvestment Risk ____________?

a) Increase

b) Decreases

c) Stays constant

d) First increases and then decreases

112 / 120

112. The period of holding for securities held in demat form is determined as per _______.

a) Date of allotment

b) LIFO

c) FIFO method

d) Date of transfer

113 / 120

113. Loss from Business or Profession cannot be set-off from

a) Short Term capital gain

b) Income from other sources

c) Profits and gains from business or profession

d) Income from salary

114 / 120

114. What is Human Life Value?

a) Present value of persons estimated expenses

b) Present value of persons Future savings

c) Present value of persons future expenses

d) Present value of persons future earnings

115 / 120

115. Which is true in case of liquidation of the company?

a) All the liabilities are paid off first

b) Remaining assets are distributed among the equity shareholders

c) Such distribution of assets not treated as transfer for capital gains

d) All of these

116 / 120

116. __________is the proportion of the claim amount which will be met by the Insured person.

a) Co-Pay

b) Deductible

c) Contribution

d) Subrogation

117 / 120

117. The maximum deduction allowed under the Income Tax Act for home loan repayments is________?

a) Up to Rs. 1,50,000 of interest paid only

b) Up to 2,00,000 of interest paid and up to Rs. 1,50,000 of principal paid

c) Up to Rs. 1,00,000 of principal paid only

d) 30% of net annual value of the property

118 / 120

118. Risk appetite of investors is assessed through

a) Risk Appetizers

b) Asset Allocators

c) Risk Profilers

d) Financial Plan

119 / 120

119. Which provision of the Insurance Act 1938 specifies about nomination by policy holder?

a) Section 38

b) Section 39

c) Section 40

d) Section 41

120 / 120

120. For what maximum period can a Reverse Mortgage Loan be taken?

a) 30 years

b) 20 years

c) 10 years

d) Life of the borrower

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NISM Series X-B: Investment Adviser (Level 2) 'Final Test'