NISM Series X-B: Investment Adviser (Level 2) Mock Test - Free Demo /10 NISM Series X-B: Investment Adviser (Level 2) Mock Test – Free Demo 1 / 10 1. Which of these methods is used to assess the retirement needs? a) Income Estimation Method b) Replacement Ratio Method c) Income Protection Method d) Income Assessment Method Explanation:There are two methods through which the income in post-retirement years can be estimated. • Replacement Ratio Method • Expense Protection MethodIn the Replacement Ratio Method, it is assumed that the standard of living remains same as just before one enters the retirement phase. This helps in defining the target much easily and more accurately after considering the effect of inflation etc. 2 / 10 2. Which of the following individuals is not considered a Class I heir under the Hindu Succession Act? a) Father b) Son of a Predeceased Daughter c) Mother d) None of the above Explanation:Under the Hindu law, the legal heirs who fall under Class 1 heir are:1. Son 2. Daughter 3. Mother 4. Widow 5. Son of predeceased son 6. Father of predeceased son 7. Widow of predeceased son 8. Son of pre deceased daughter 9. Daughter of predeceased daughter 10. Son of predeceased son of a predeceased son 11. Daughter of predeceased son of predeceased son 12. Widow of predeceased son of predeceased son. 3 / 10 3. XYZ Steel Ltd. is a company incorporated in India under the Companies Act on 20th September 2017. The Chairman, MD, and Directors of this company have been living in New Jersey (USA) for the last six years. For the last few years, they come to India once in a year to oversee the operations of the company. In 2023, they came to India on 10th of June and went back to the USA on the 20th of August. For the last ten years, they were resident of India for three years. What is the residential status of XYZ Steel Ltd.? a) Resident b) Ordinarily resident c) Not ordinarily resident d) Non resident Explanation:An Indian Company means a company formed and registered under the Companies Act. Indian companies are always treated as resident in India. Even if an Indian company is a subsidiary of a foreign company or it is controlled from a place located outside India, the Indian company is considered as resident in India. An Indian company can never be a non-resident. 4 / 10 4. _______ is a passively managed fund. a) Index Fund b) Income Fund c) Sector Fund d) Thematic Fund Explanation:Passive mutual funds replicate a market index like the Nifty or Sensex. These funds invest in the constituents of the selected market index in the same proportion as they are present in the indexFund managers of passive funds do not conduct any research to pick up stocks that can be a part of their portfolios. They imitate the index composition. For example, a passively managed fund tracking Sensex will invest in the stocks of 30 companies that make up the index in the same proportion. 5 / 10 5. Who among the following individuals is required to meet the registration obligation according to SEBI (Investment Advisers) Regulations, 2013: a) A Chartered Accountant practicing his profession b) An IFA who charges advisory fees to investors Explanation:An Independent Financial Adviser (IFA) who charges advisory fees to investors is expected to comply with the registration requirements under SEBI (Investment Advisers) Regulations, 2013. 6 / 10 6. Overseas travel insurance covers ________. a) Delay in baggage clearance b) Financial assistance in case of emergency as mentioned in the policy c) Medical assistance as mentioned in the policy d) All of the above Explanation:Overseas Travel Insurance provides medical, financial and other assistance in case of an emergency during international travel. The cover will typically be provided for medical help required, delay in baggage clearance, accident and any additional cover required. 7 / 10 7. Identify the tool of estate planning which takes effect in the lifetime of the individual ? a) Will b) Nomination c) Gift d) All of the above Explanation:Estate planning tools are classified as those that take effect during the life of a person and after death of a person.Will and Nomination takes effect after the death of the individual.Gift is given during the lifetime of the individual.(Tools used post death of the individual • Will • NominationTools used during the lifetime of the individual • Family Settlement • Trust • Guardianship • Joint Holding • Gift • Power of Attorney • Mutation) 8 / 10 8. _________ helps the investors to assess risk. a) Risk Journal b) Systematic Investment Plan c) Systematic Withdrawal Plan d) Risk Profiling Explanation:Clients’ financial risk tolerance – attitudes, values, motivations, preferences and experiences, is measured with a risk profile. The risk profile questionnaire helps in understanding the risk tolerance levels of a client.SEBI Investment Adviser Regulation 16 requires that the Investment Adviser has to ensure that Clients Risk Profiling is done so as to ensure that the advise or recommended Investment product is suitable for the client. 9 / 10 9. A borrower of securities has to deposit which of these amounts on an upfront basis? a) Extreme loss margin b) Value-at-risk margin c) Lending fee d) All of the above Explanation:Borrower of securities is required to deposit 100% of the lending price, lending fee, value at risk margins and extreme loss margins on an upfront basis and, thereafter, daily mark to market margin (MTM) is collected. 10 / 10 10. The face value of a company’s share is Rs 5, with a current market price of Rs 60. The EPS stands at Rs 12, and the company declares a dividend of 20%. What is the dividend yield? a) 12% b) 5% c) 2.41% d) 1.67% Explanation:Dividend is declared on face value. So 20% of Rs 5 (face value) is Rs 1.Dividend Yield is on the Market Price. The formula is : Dividend per share / Current market price x 100= 1 / 60 x 100 = 1.67% Your score is 0% Restart quiz Exit
