NISM Series X-B: Investment Adviser (Level 2) Mock Test (Set 3)

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1. When an NRI retuns to India and becomes a resident Indian, What has to be done withrespect to Demat Holdings?

a) Change the status to resident and continue same account

b) Change status and Open a New demat account and transfer holdings

c) Operate the existing demat account

d) Continue the same account for existing investments and for all future investments a new demat account is opened

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2. An investor buys 100 shares of a stock at Rs.200 per share on 60% margin. The stock goes to Rs.220. Ignoring all costs of transacting, the percentage return on investment is:

a) 45.45%

b) 16.67%

c) 18%

d) 10%

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3. In case of NPS which of the following is True?

a) Exit before turning 60 years is possible by withdrawing 40 per cent of the accumulated savings and compulsorily buying an annuity with the remaining 60 per cent.

b) Exit before turning 60 years is possible by withdrawing 60 per cent of the accumulated savings and compulsorily buying an annuity with the remaining 40 per cent.

c) Exit before turning 60 years is possible by withdrawing 20 per cent of the accumulated savings and compulsorily buying an annuity with the remaining 80 per cent.

d) Exit before turning 60 years is possible by withdrawing 80 per cent of the accumulated savings and compulsorily buying an annuity with the remaining 20 per cent.

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4. The benefits of diversification in a portfolio is seen in the form of __________.

a) Enhancing risk adjusted returns

b) Maximising returns

c) Guaranteeing returns

d) Eliminating risk

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5. Annuity received from insurance companies is taxable as:

a) Profits in lieu of Salary

b) income from salary

c) Income from Other Sources

d) None of the above

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6. Daniel Kahneman and Amos Tversky (1979) introduced __________.

a) Capital market theory

b) Prospect theory

c) mental accounting theory

d) Modern portfolio theory

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7. The losses can be carried forward for ___________ only in case of speculative business losses.

a) 8 years

b) 5 years

c) 4 years

d) 7 years

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8. A bond pays 10% interest per annum. The inflation rate for that year is 5%. What is the real return?

a) 5%

b) 4.76%

c) 4.56%

d) 15%

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9. An investor who seeks a high level of return and is willing to bear the risks of such investments is likely to be recommended:

a) Aggressive portfolio

b) Moderate portfolio

c) Conservative portfolio

d) Low Beta Portfolio

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10. The maximum limit of investment is ________ for senior citizens’ saving scheme.

a) Rs. 10 lakhs

b) Rs. 20 lakhs

c) Rs. 15 lakhs

d) Rs. 25 lakhs

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11. If the tax payable by a non-corporate assessee is less than ________ of adjusted total income then it is liable to pay MAT.

a) 18.50%

b) 10.50%

c) 20.50%

d) 15.50%

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12. Under Sec 24(b) of the Income Tax Act, Interest up to ___________ can be claimed as a deduction for housing loans taken on or after April 1st, 1999.

a) Rs 1 Lakh

b) Rs 2 Lakhs

c) Rs 30,000

d) Rs 1.25 Lakh

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13. The debt or receivables acquired by the SPV from the originator and issued by SPV are called _______.

a) Asset backed securities

b) Unsecured debentures

c) Mortgage backed securities

d) Either 1 or 2

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14. In case of FPIs, the resultant gains from derivatives shall always be _________.

a) Speculative business income

b) Short-term capital gain

c) Long-term business income

d) Long-term capital gain

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15. ___________ solicits and arranges insurance business for its clients with multiple insurers located in India and/or provides claims consultancy, Risk Management services or other similar services.

a) Reinsurance Broker

b) Composite Broker

c) Corporate Agent

d) Direct Broker

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16. The No Claim Bonus can be accumulated up to a maximum limit of ________ on Own Damage premium.

a) 30%

b) 60%

c) 75%

d) 50%

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17. Which is the most basic legal instrument of all estate plans ?

a) Power of Attorney

b) Will

c) Trust Deed

d) None of the above

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18. A person of Indian origin, now settled abroad, comes to India on a visit for 90 days in the previous year 2019-20. He has no stay in India prior to the previous year 2019-20. What would be his residential status for AY 2020-21 ?

a) Resident and Ordinarily Resident

b) Deemed Resident Indian on account of his origin

c) Non-resident Indian

d) Resident and Not Ordinarily Resident

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19. A borrower can borrow securities to ________.

a) Avoid settlement failure

b) Cover short positions

c) Cover long positions

d) Both 1 and 2

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20. Shahrukh wants to buy a life insurance policy on the life of his father as well as both his brothers. However, in case of any eventuality he wants to reserve all legal rights of receiving the policy benefits in his name. He wants to know whether it is legally possible for him.

a) Yes, but he cannot reserve the right to receive the policy benefits.

b) s, he can buy the policy in the desired way.

c) He can buy the policy only in the name of his father in the desired way

d) No, in the absence of insurable interest he cannot buy life insurance policy in their name.

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21. Insurance is meant to __________.

a) Prevent specified events

b) Prevent damage to assets from specified events

c) Rebuild the assets lost because of specified events

d) Compensate for losses from specified events

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22. Under which section of the Income Tax Act can an individual get a deduction from taxable income for the premium paid towards a health insurance policy?

a) Section 80D.

b) Section 80C.

c) Section 80F.

d) Section 80E

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23. Cash management bills are issued for a very short period usually less than _______.

a) 31 days

b) 45 days

c) 91 days

d) 60 days

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24. The short-term capital loss can be set off against any capital gain, whether short-term or long-term. State whether True or False.

a) True

b) False

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25. Any profit and gains arising to FPI from derivative transactions shall always be taxable under ________.

a) Profits and gains of business

b) Capital gains

c) Property income

d) Income from other sources

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26.

In insurance terms, what does the term “Portability” mean?

a) Mid-term cancellation of policy

b) Switching of health insurance policy from one insurer to another at the time of renewal

c) Taking a fresh policy

d) Cancellation of existing policy and getting another policy

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27.

___________ is related to the financial policy concerning the utilization of proceeds from disinvestment.

a) Department of public asset management

b) Department of revenue

c) Department of expenditure

d) Department of financial services

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28.

What is TRUE about an immediate annuity among the following?

a) The annuity is adjusted for inflation

b) The annuity rates are fixed by IRDAI

c) The annuity is available for immediate dependents

d) The annuity payment will start as soon as the annuity is purchased depending on the frequency of the payment chosen

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29.

Losses from a regular business can be offset against the profits of a speculative business. State whether True or False.

a) False

b) True

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30.

The sovereign gold bond bears interest at the rate of __________ per annum on the nominal value of the bond.

a) 2.50%

b) 3.50%

c) 1.50%

d) 4.50%

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31.

Which of the following are excluded from capital assets?

a) Goodwill

b) Stock in trade

c) Route permit

d) None of the above

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32.

Any losses arising out of a speculative business can be set off against gains arising from _____________?

a) Speculative business only

b) Income from Salaries

c) Income from any other head

d) Income from business and profession

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33.

A subscriber to the NPS receives pension income in retirement from ________.

a) PFRDA

b) An Annuity purchased on retirement

c) The Corporate employer

d) The Government

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34.

The rebate under Section 87A shall be allowed to an assessee being a __________.

a) Non resident individual

b) Foreign portfolio investor

c) Resident individual

d) Both 1 and 3

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35.

Which of the following instruments under Section 80C has an EEE (Exempt-Exempt-Exempt) status?

a) SCSS

b) PPF

c) NSC

d) NPS

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36.

Who is not eligible to invest in Sovereign Gold Bonds?

a) A Private Trust

b) A Charitable Institute

c) An individual on behalf of a minor individual

d) A Company

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37.

All property under the will vests in him and he is the legal representative for all purposes of the deceased person. Who is he?

a) Beneficiary

b) Executor

c) Testator

d) Testatrix

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38.

Section 44AD specifically prohibits an assesses from opting presumptive taxation scheme in respect of _______.

a) Commission income

b) Income from small business

c) Brokerage income

d) Both 1 and 2

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39.

____________ works as a pass-through entity that transfers income from the debt or receivables of the originator to its security holders.

a) Special purpose vehicle

b) Asset management companies

c) Non banking financial companies

d) Both 2 & 3

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40.

Narinder wants to create a Will and understand its procedures; you explained that the __________ is the person responsible for submitting the Will for probate.

a) Testator

b) Executor

c) Beneficiary

d) Lawyer

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41.

The process of distributing an investor’s wealth among various asset classes is known as _________.

a) Asset Allocation

b) Financial Planning

c) Financial Advising

d) Investment Strategy

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42.

What is a solution to manage the inadequacy of the retirement corpus closer to retirement among the following?

a) Postpone retirement

b) Reduce periodic savings

c) Increase corpus target

d) Invest in riskier assets

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43. An investor bought 1000 units of a debt mutual fund scheme at Rs 10 and sold them at Rs 15, after one year. Calculate the capital gain chargeable to tax. Inflation Index of year bought was 400 and Index was 440 in the year sold.

a) Rs 500

b) Rs 5000

c) Rs 800

d) Data not sufficient

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44.

Which of the following is considered a capital asset?

a) Shares

b) Agricultural land in India

c) Raw materials held for the purpose of business or profession

d) Any stock-in-trade

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45.

The investment strategy is decided based on the analysis of the needs and risk appetite of the investor.

a) Flexible Asset Allocation

b) Strategic Asset Allocation

c) Fixed Asset Allocation

d) Tactical Asset Allocation

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46.

In the National Pension System (NPS) under the active choice, the investor will decide the money allocation between the four asset classes, with a maximum cap of ___________ in equity assets.

a) 45%

b) 50%

c) 60%

d) 75%

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47.

Section 111A is applicable to the following short-term capital gains, EXCEPT:

a) Short-term Capital Gains earned on sale of units of an equity oriented mutual fund sold through a recognised stock exchange in an IFSC, not chargeable to STT.

b) Short-term Capital Gains on sale of equity shares listed on a recognised stock exchange, chargeable to STT.

c) Short-term Capital Gains on sale of equity shares listed on a recognised stock exchange, not chargeable to STT.

d) NShort-term Capital Gains earned on sale of units of an equity oriented mutual fund sold through a recognised stock exchange, chargeable to STT.

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48.

Under which section of the Income Tax Act can you claim a rebate on the interest on an education loan?

a) Section 80E

b) Section 80CCC

c) Section 80D

d) Section 80G

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49.

For a non-resident Indian, the interest received from a notified infrastructure debt fund is taxable at _______.

a) 12%

b) 10%

c) 5%

d) 15%

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50. Which of the following statements is True ?

a) In Absolute assignment the assignee doesnot acquire all the rights and liabilities of the original assured

b) Pure risks are Insurable while Speculative risk are not insurable

c) Brothers and Sisters have Insurable Interest in each others life

d) All the above statements are TRUE

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NISM Series X-B: Investment Adviser (Level 2) Mock Test (Set 3)