INVESTMENT ADVISER LEVEL 2  SET 16
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Dear Candidate,
1. This is a Mock Examination of NISMSeriesXVIII: Financial Education Certification Examination.
2. This mock test has 50 questions of 1 marks each. Please note that the actual examination for NISM Series XVIII: Financial Education Certification Examination has 50 questions of 1 mark each.
3. There is no negative marking.
4. The passing score for the examination is 60%
5. This mock examination is only to give the candidates an experience of NISM testing system.
6. Please note that passing this mock test would not make you eligible for claiming a certificate for NISMSeriesXVIII: Financial Education Certification Examination.
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Question 1 of 25
1. Question
Chedilal is earning Rs.15 lacs p.a. and expects his income to increase by 2% every year. He also expects a growth of 8%
on his investment. He has 15 years of working life left as he would retire at the age of 55. Calculate the insurance he needs as
per Human Life Value as on today? 
Question 2 of 25
2. Question
Life insurance, insurance for the maintenance and replacement of plant and machinery, annuities, are all examples of
insurance products that serve 
Question 3 of 25
3. Question
Funds which invest only in the stocks comprising an index and aim to give returns commensurate with the index returns
are called _________. 
Question 4 of 25
4. Question
Under Call option the buyer has

Question 5 of 25
5. Question
In the case of index futures contracts, the daily settlement price is the ______.

Question 6 of 25
6. Question
Two assets A and B have a correlation coefficient of 0.325. It means that

Question 7 of 25
7. Question
The relationship between the bond prices and interest rates is one of the following

Question 8 of 25
8. Question
In case of interest rate movement, the price change is more for ________maturity bonds and less for __________maturity
bonds? 
Question 9 of 25
9. Question
__________invests in startup or early stage ventures or social ventures or SMEs or infrastructure or other sectors or areas
which the government or regulators consider as socially or economically desirable 
Question 10 of 25
10. Question
If an Investor has completed KYC formalities with a Centralised KYC Registration Agency is applicable for

Question 11 of 25
11. Question
The government uses _________ to borrow for the shortterm

Question 12 of 25
12. Question
Which of the following actions helps a consumer raise a low score or maintain a high one?

Question 13 of 25
13. Question
ISIN stands for __________.

Question 14 of 25
14. Question
A company with Rs.30 crores PBT, Rs.20 crores PAT, Rs.5 crores equity capital has Price/Earnings (P/E) ratio of 15. The
market price of the share will be 
Question 15 of 25
15. Question
Assume you are an exporter and you want to sell USD that you have received as export remittance. The bank quotes a
price of 45.10/ 45.12 for USDINR. At what price can you sell one unit of USD? 
Question 16 of 25
16. Question
Total risks comprises of:

Question 17 of 25
17. Question
Aditi is 30 years old. She deposits 25000 at the beginning of each year in deferred annuity scheme as a part of her
retirement planning. How much will be in the account after 25 years if it earns 9.5% compound annual interest? 
Question 18 of 25
18. Question
Case Study:
Mr. R current annual income is Rs. 8.75 Lac which is expected to increase by 8% p.a. till he retires at 60 years of age. His current age is 36
years. Mr. R consumes 20% of his income on self and his professional upgrades. He wants to buy an insurance cover which shall provide for
the loss of income to his family in case of any eventuality with his life today. If the claim proceeds are invested in an investment instruments
returning 9% p.a., You compute the following:
Q18) Income required to sustain his family in the first year, in case of his death is _____ 
Question 19 of 25
19. Question
Case Study:
Mr. R current annual income is Rs. 8.75 Lac which is expected to increase by 8% p.a. till he retires at 60 years of age. His current age is 36
years. Mr. R consumes 20% of his income on self and his professional upgrades. He wants to buy an insurance cover which shall provide for
the loss of income to his family in case of any eventuality with his life today. If the claim proceeds are invested in an investment instruments
returning 9% p.a., You compute the following:
Q19) The differential growth rate of the investment instrument to generate a growing annual income stream to sustain his
family is _____ 
Question 20 of 25
20. Question
Case Study:
Mr. R current annual income is Rs. 8.75 Lac which is expected to increase by 8% p.a. till he retires at 60 years of age. His current age is 36
years. Mr. R consumes 20% of his income on self and his professional upgrades. He wants to buy an insurance cover which shall provide for
the loss of income to his family in case of any eventuality with his life today. If the claim proceeds are invested in an investment instruments
returning 9% p.a., You compute the following:
Q20) The insurance cover needed by Mr. R to replace the income needs of his family in case of his death is _____ 
Question 21 of 25
21. Question
Case Study:
Mr. R current annual income is Rs. 8.75 Lac which is expected to increase by 8% p.a. till he retires at 60 years of age. His current age is 36
years. Mr. R consumes 20% of his income on self and his professional upgrades. He wants to buy an insurance cover which shall provide for
the loss of income to his family in case of any eventuality with his life today. If the claim proceeds are invested in an investment instruments
returning 9% p.a., You compute the following:
Q21) What is human life value? 
Question 22 of 25
22. Question
Case Study:
Mr. Mohit is a married man of age 43. He has a good job and he also saves regularly. He intends to send his daughter for higher education
which will be due in 5 years. The current cost of such education is Rs 15,00,000 per annum and this is incurred at the end of each year for 2
years. The inflation is likely to be at 15% pa. His has one more daughter whose marriage is scheduled at the end of 7th year and which will
cost Rs 1,00,00,000. The likely inflation is 10% pa. Mr. Mohit has saved Rs 2,00.00,000 to meet these two expenses by investing in both equity
and debt which is yielding 8% pa.
Q22) How much money will Mr. Mohit need to be set aside from the corpus at the end of Year 5, to finance the daughter’s higher
education? Assume the amount set apart will earn 6%interest 
Question 23 of 25
23. Question
Case Study:
Mr. Mohit is a married man of age 43. He has a good job and he also saves regularly. He intends to send his daughter for higher education
which will be due in 5 years. The current cost of such education is Rs 15,00,000 per annum and this is incurred at the end of each year for 2
years. The inflation is likely to be at 15% pa. His has one more daughter whose marriage is scheduled at the end of 7th year and which will
cost Rs 1,00,00,000. The likely inflation is 10% pa. Mr. Mohit has saved Rs 2,00.00,000 to meet these two expenses by investing in both equity
and debt which is yielding 8% pa.
Q23) How much money will be required on account of daughter’s marriage in the year it is planned? 
Question 24 of 25
24. Question
Case Study:
Mr. Mohit is a married man of age 43. He has a good job and he also saves regularly. He intends to send his daughter for higher education
which will be due in 5 years. The current cost of such education is Rs 15,00,000 per annum and this is incurred at the end of each year for 2
years. The inflation is likely to be at 15% pa. His has one more daughter whose marriage is scheduled at the end of 7th year and which will
cost Rs 1,00,00,000. The likely inflation is 10% pa. Mr. Mohit has saved Rs 2,00.00,000 to meet these two expenses by investing in both equity
and debt which is yielding 8% pa.
Q24) How much will be left in the corpus after both goals are fulfilled (assume that he does not set apart money in the 6%
corpus mentioned in Q9.1)? 
Question 25 of 25
25. Question
Case Study:
Mr. Mohit is a married man of age 43. He has a good job and he also saves regularly. He intends to send his daughter for higher education
which will be due in 5 years. The current cost of such education is Rs 15,00,000 per annum and this is incurred at the end of each year for 2
years. The inflation is likely to be at 15% pa. His has one more daughter whose marriage is scheduled at the end of 7th year and which will
cost Rs 1,00,00,000. The likely inflation is 10% pa. Mr. Mohit has saved Rs 2,00.00,000 to meet these two expenses by investing in both
equity and debt which is yielding 8% pa.
Q25) How would you describe the investment policy Mr.Mohit is using for the corpus?