INVESTMENT ADVISER LEVEL 2 -- SET 2
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Dear Candidate,
1. This is a Mock Examination of NISM-Series-XVIII: 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 NISM-Series-XVIII: Financial Education Certification Examination.
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Question 1 of 25
1. Question
Cash is accepted as a mode of payment for Mutual Fund Investments to the extent of _______
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Question 2 of 25
2. Question
Every listed public company making an initial offer of any security of __________ has to issue it only in dematerialized
form in accordance with the Depositories Act 1996 -
Question 3 of 25
3. Question
An award made by the Insurance Ombudsman will only be binding on the insurer if the
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Question 4 of 25
4. Question
Mr.X who was an NRI subsequently becomes Resident. Identify the correct proposition with respect to the Mutual Fund
Investments made when he was an NRI. -
Question 5 of 25
5. Question
Risk free return of a scheme is 5%, with Beta of 1.2 earned a return of 8%. Treynor ratio of the scheme is
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Question 6 of 25
6. Question
Fund XYZ had a total return of 14%, a beta of 0.95, and a standard deviation of 18%. The risk-free return was 4% and the
overall market had a total return of 11%. What is this funds Sharpe ratio? -
Question 7 of 25
7. Question
In a top-down approach, sector allocation precedes stock selection
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Question 8 of 25
8. Question
Final settlement on USD INR Currency Derivatives is done using
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Question 9 of 25
9. Question
Underlying assets in case of Derivatives can be _____.
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Question 10 of 25
10. Question
A ________ is an instruction to buy or sell at the best price currently available in the market
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Question 11 of 25
11. Question
One year interest rates in US and India are say 7% and 10% respectively and the spot rate of USD in India is Rs. 47. One
year forward exchange rate should be Rs._____ -
Question 12 of 25
12. Question
Debt products are exposed to
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Question 13 of 25
13. Question
_______order remains in the system for execution till it is cancelled by the investor
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Question 14 of 25
14. Question
Investment amount to be saved today to achieve a Financial Goal is found using
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Question 15 of 25
15. Question
Investor complaints relating to the following Capital Market issues will not be entertained by SEBI:
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Question 16 of 25
16. Question
Which of the following stocks has high beta?
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Question 17 of 25
17. Question
What is true about Fundamental Analysis?
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Question 18 of 25
18. Question
Statement A: Fundamental Analysis looks at matters like future earnings & dividends to assess intrinsic value.
Statement B : Technical Analysis involves a study of past prices and volumes to determine the direction of price movement -
Question 19 of 25
19. Question
Case Study:
Mr. Z, aged 52 years, is working in a leading company. His net savings are Rs 50,000 p.m. Based on salary growth and other factors, he
expects this to rise by 20% p.a. till his retirementat age 60. This does not include monthly contributions of Rs 9,000 (Rs 4000 own
contribution;Rs 5000 employer contribution) to various funds towards retirement corpus. These areexpected to grow by 20% p.a. till
retirement. The retirement corpus by the end of the yearwill be Rs 12 lakhs, entirely in debt, which will yield 8% p.a. on average. Besides his
ownresidential house and the retirement corpus, his savings and investments will amount to Rs50 lakhs by the end of the year, 30% of
which will be in equity. He has a practice of investing,at the end of each year, his disposable savings into debt and equity in the ratio of
80:20. Inthe long run, he expects equity to yield 15% and debt to yield 8.5%. At the end of age 55, heexpects an outflow of funds amounting
to Rs 5 lakhs, which he hopes to meet out of annualsavings.He expects inflation of 10% and post-retirement investment return on his
portfolio at 11%. His current expenses are Rs 40,000 per month.Assume zero date as the end of age 52. Calculations are to be done on
annual basis. Ignore taxation and interest income on savings and contributions during the year.
Q19) On retirement, how much will Mr. Z have in his retirement corpus? -
Question 20 of 25
20. Question
Case Study:
Mr. Z, aged 52 years, is working in a leading company. His net savings are Rs 50,000 p.m. Based on salary growth and other factors, he
expects this to rise by 20% p.a. till his retirementat age 60. This does not include monthly contributions of Rs 9,000 (Rs 4000 own
contribution;Rs 5000 employer contribution) to various funds towards retirement corpus. These areexpected to grow by 20% p.a. till
retirement. The retirement corpus by the end of the yearwill be Rs 12 lakhs, entirely in debt, which will yield 8% p.a. on average. Besides his
ownresidential house and the retirement corpus, his savings and investments will amount to Rs50 lakhs by the end of the year, 30% of
which will be in equity. He has a practice of investing,at the end of each year, his disposable savings into debt and equity in the ratio of
80:20. Inthe long run, he expects equity to yield 15% and debt to yield 8.5%. At the end of age 55, heexpects an outflow of funds amounting
to Rs 5 lakhs, which he hopes to meet out of annualsavings.He expects inflation of 10% and post-retirement investment return on his
portfolio at 11%. His current expenses are Rs 40,000 per month.Assume zero date as the end of age 52. Calculations are to be done on
annual basis. Ignore taxation and interest income on savings and contributions during the year.
Q20) At the end of Age 55, what percentage of Mr. Z’s portfolio will be in debt (excluding retirement corpus)? -
Question 21 of 25
21. Question
80:20. Inthe long run, he expects equity to yield 15% and debt to yield 8.5%. At the end of age 55, heexpects an outflow of funds amounting
to Rs 5 lakhs, which he hopes to meet out of annualsavings.He expects inflation of 10% and post-retirement investment return on his
portfolio at 11%. His current expenses are Rs 40,000 per month.Assume zero date as the end of age 52. Calculations are to be done on
annual basis. Ignore taxation and interest income on savings and contributions during the year.
Q21) If he re-invests the entire retirement corpus in debt, what percentage of Mr. Z’s portfolio will be in debt when he retires? -
Question 22 of 25
22. Question
Case Study:
Mr. Z, aged 52 years, is working in a leading company. His net savings are Rs 50,000 p.m. Based on salary growth and other factors, he
expects this to rise by 20% p.a. till his retirementat age 60. This does not include monthly contributions of Rs 9,000 (Rs 4000 own
contribution;Rs 5000 employer contribution) to various funds towards retirement corpus. These areexpected to grow by 20% p.a. till
retirement. The retirement corpus by the end of the yearwill be Rs 12 lakhs, entirely in debt, which will yield 8% p.a. on average. Besides his
ownresidential house and the retirement corpus, his savings and investments will amount to Rs50 lakhs by the end of the year, 30% of
which will be in equity. He has a practice of investing,at the end of each year, his disposable savings into debt and equity in the ratio of
80:20. Inthe long run, he expects equity to yield 15% and debt to yield 8.5%. At the end of age 55, heexpects an outflow of funds amounting
to Rs 5 lakhs, which he hopes to meet out of annualsavings.He expects inflation of 10% and post-retirement investment return on his
portfolio at 11%. His current expenses are Rs 40,000 per month.Assume zero date as the end of age 52. Calculations are to be done on
annual basis. Ignore taxation and interest income on savings and contributions during the year.
Q22) What is the corpus requirement to ensure that he is able to sustain the same standard of living for 15 years after
retirement? -
Question 23 of 25
23. Question
Case Study:
Mr. Gupta, an Indian resident invests in Mutual Funds regularly. He has an ongoing SIP which is currently valued at Rs 2,00,000. In this SIP he
is contributing Rs 25000 pm and this will continue for 12 more months. The yield on SIP is estimated to be 1% pm. As Mr. Gupta is expecting
some monies and so he is planning to start a new SIP of Rs 12000 pm for 18 months. This new SIP can yield 1.25% pm. Mr. Gupta has a son
named Pranav. Mr. Gupta plans to send Pranav to USA for higher studies in the field of medical sciences. The expenses for such studies is Rs
20,00,000 and this will go up by 10% pa over the next 5 years. The rupee is also likely to depreciate by 3% against the USD during this period.
Q23) What will be the value of Mr. Gupta’s ongoing SIP in one year ? -
Question 24 of 25
24. Question
Case Study:
Mr. Gupta, an Indian resident invests in Mutual Funds regularly. He has an ongoing SIP which is currently valued at Rs 2,00,000. In this SIP he
is contributing Rs 25000 pm and this will continue for 12 more months. The yield on SIP is estimated to be 1% pm. As Mr. Gupta is expecting
some monies and so he is planning to start a new SIP of Rs 12000 pm for 18 months. This new SIP can yield 1.25% pm. Mr. Gupta has a son
named Pranav. Mr. Gupta plans to send Pranav to USA for higher studies in the field of medical sciences. The expenses for such studies is Rs
20,00,000 and this will go up by 10% pa over the next 5 years. The rupee is also likely to depreciate by 3% against the USD during this period.
Q24) Mr. Gupta plans to start a new SIP of Rs 12000 pm. What will be its value at the completion of SIP period ? -
Question 25 of 25
25. Question
Case Study:
Mr. Gupta, an Indian resident invests in Mutual Funds regularly. He has an ongoing SIP which is currently valued at Rs 2,00,000. In this SIP he
is contributing Rs 25000 pm and this will continue for 12 more months. The yield on SIP is estimated to be 1% pm. As Mr. Gupta is expecting
some monies and so he is planning to start a new SIP of Rs 12000 pm for 18 months. This new SIP can yield 1.25% pm. Mr. Gupta has a son
named Pranav. Mr. Gupta plans to send Pranav to USA for higher studies in the field of medical sciences. The expenses for such studies is Rs
20,00,000 and this will go up by 10% pa over the next 5 years. The rupee is also likely to depreciate by 3% against the USD during this period.
Q25) What is the amount Mr. Gupta will need in five years for his son Pranav’s education ?
