NISM 5a mock test 2

NISM VA, Mutual Fund Distributors Certification Examination is mandatory for becoming a Mutual Fund Distributor. You can also find a job as an Investment Advisor, a Mutual Fund operations associate, or a relationship manager with banks or stock broking firms.

This exam is taken online at the centers allotted by NISM. There are a total of 100 online MCQ questions. Each question carries 1 mark. There are a total of 100 Marks. Passing is 50% i.e., 50 marks. There is no negative marking.

We are starting a practice series of 5 question papers. Each has 100 questions in it. The reader should first read the complete test material provided by NISM in the PDF. 15 days before the exam, they can attempt this test series, consisting of 5 test papers. By solving these 5 test questions, students will get sufficient practice and confidence in clearing the exam on their first attempt. Students should attempt to solve these tests twice to ensure that all important concepts are understood.

NISM VA Exam questions are primarily designed to assess a student’s understanding of the concept and the depth of their knowledge about the subject. There is no fixed pattern of MCQs. The student has to read the complete material provided by NISM and then try out the given mock test to check their knowledge. This mock test will give readers the required practice for their final exam. All the best.

Readers can get complete information about the NISM VA Mutual Fund Distributor Exam on the official website of NISM. www.nism.ac.in

NISM 5a Practice Test 2

NISM 5a Practice Test 2

1 / 100

Reviewing a financial plan should be done

Once every 5–10 years

Periodically, at least once a year

Only when markets fall

Only when goals are met

2 / 100

SIP works best for

Risk-free investing

Avoiding all losses

Long-term wealth creation through disciplined investing

One-time short-term profit

3 / 100

Excess return is

Scheme return plus benchmark return

NAV minus expenses

Scheme return minus benchmark return

Alpha × Beta

4 / 100

Dividend yield of a scheme is calculated as

Dividend per unit × NAV

Dividend per unit ÷ TER

Dividend per unit ÷ NAV

Dividend per unit ÷ Issue price

5 / 100

Credit risk in mutual funds refers to

Risk of loss due to change in interest rates

Risk of default by issuer

Risk due to inflation

Risk due to market crash

6 / 100

Tracking error is relevant for

Liquid funds

ELSS

Index funds

Arbitrage funds

7 / 100

The account statement for mutual fund investors must be sent

Within 10 business days of transaction

Monthly

Quarterly

Within 5 business days of transaction

8 / 100

Dividend Distribution Tax (DDT) on mutual funds in India is

10%

20%

Abolished from April 2020

30%

9 / 100

Mutual funds must disclose half-yearly unaudited accounts within

1 month from period-end

3 months from period-end

6 months from period-end

No fixed period

10 / 100

The accounting year for mutual funds in India ends on

31 March

31 December

30 June

30 September

11 / 100

Securities Transaction Tax (STT) on redemption of equity fund units is

1%

.01%

.001%

.0001%

12 / 100

Indexation benefit is available for

Equity funds

Debt funds held over 3 years (earlier)

ELSS

Liquid funds

13 / 100

STCG on debt mutual funds is taxed at

Exempt completely

10%

15%

Investor’s applicable income tax slab

14 / 100

Long-term capital gains (LTCG) on equity-oriented funds above ₹1 lakh are taxed at

10% without indexation

20% with indexation

15%

Exempt

15 / 100

Short-term capital gains (STCG) on equity-oriented mutual funds are taxed at

10%

15%

20%

25%

16 / 100

AMC can charge additional TER for inflows from beyond top 30 cities up to

0.75%

0.25%

0.50%

1%

17 / 100

A higher TER generally leads to

Higher investor returns

Lower investor returns

No impact on returns

Higher NAV

18 / 100

Liquid funds use amortization for instruments with maturity up to

30 days

60 days

90 days

180 days

19 / 100

The cut-off time for purchase of equity fund units for same-day NAV is

12:00 pm

1:30 pm

3:00 pm

4:00 pm

20 / 100

The pricing of mutual fund units is governed by

AMFI guidelines only

AMC discretion

RBI

SEBI regulations

21 / 100

In case of dividend payout, the NAV

Increases

Decreases by dividend amount

Remains same

Doubles

22 / 100

The price at which new units are issued to investors is called

Redemption price

Market price

Strike price

Issue price

23 / 100

Mark-to-market valuation is used for

All traded securities

Only government securities

Only bank deposits

Only equity shares

24 / 100

Entry load on mutual funds in India is

Allowed up to 2%

Not permitted

Allowed only in debt funds

Non of these

25 / 100

TER for debt funds is generally

More than equity funds

Higher than equity funds

Not regulated

Lower than equity funds

26 / 100

Entry load on mutual funds in India is

Allowed up to 2%

Allowed up to 3%

Not allowed

Non of these

27 / 100

The maximum TER allowed for equity funds is

1.5%

2,50%

2.25%

3%

28 / 100

Total Expense Ratio (TER) includes

Investor profits

Custodian profits only

AMC fees, marketing expenses, registrar fees

Dividend payouts

29 / 100

If NAV is Rs. 50 and the exit load is 1%, the redemption price will be

49.00

49.10

49.50

49.05

30 / 100

Exit load is charged to

Increase NAV

Discourage early redemptions

Increase number of units

Pay trustees

31 / 100

Dividend received by a mutual fund from Indian companies is

Taxable in the hands of the fund

Exempt from tax

Taxable at 10%

Taxable at 20%

32 / 100

The redemption price is

Price received by investor on selling units

Price declared in SID only

Price before loads

Price paid by investor to buy units

33 / 100

If a distributor’s ARN expires, they

Can continue selling for 6 months

Cannot sell mutual funds until renewal

Can sell only debt funds

Can sell only through sub-brokers

34 / 100

A Registered Investment Adviser (RIA) differs from a distributor because

RIA provides fee-based advice

RIA earns trail commission

RIA sells schemes directly

RIA works for AMCs

35 / 100

SEBI mandates that distributors should conduct

Only marketing activities

Proper risk profiling of clients

Free investment advice for all

NAV calculation

36 / 100

Which type of mutual fund distribution channel operates entirely online

Institutional channel

Direct channel

National distributors

Regional distributors

37 / 100

Distributors must maintain records of investor transactions for at least

1 year

3 Year

5 years

Non of these

38 / 100

AMFI’s code of conduct aims to

Ensure fair dealing with investors

Increase AMC profits

Reduce SEBI’s work

Control NAV

39 / 100

Which of the following is considered an unethical practice

Disclosing risks honestly

Explaining investment objectives

Misrepresenting scheme features

Providing SID to investors

40 / 100

Distributors must follow the code of conduct prescribed by

RBI

AMFI

SEBI only

Ministry of Finance

41 / 100

Mis-selling in mutual funds means

Selling wrong products to investors

Selling at a discount

Selling through advertisements

Selling through agents

42 / 100

Churning refers to

Encouraging unnecessary transactions to earn more commission

Calculating NAV daily

Launching new schemes

Changing scheme objectives

43 / 100

The empanelment process is between

Distributor and SEBI

Distributor and AMC

Distributor and custodian

Distributor and Ministry of Finance

44 / 100

As per SEBI, distributors must disclose

Their commission to investors

Fund manager’s salary

AMC’s annual profits

Non of these

45 / 100

Upfront commission is

Paid after redemption

Paid at the time of purchase

Paid monthly to all investors

Paid by SEBI

46 / 100

Trail commission is paid

One time at sale

On a regular basis as long as the investment remains

Only on redemption

Only for equity schemes

47 / 100

Distributors earn commission through

Management fees

Trail and/or upfront

Entry load

Custodian charges

48 / 100

The SAI contains

Only scheme returns

Legal and statutory information

Only fund manager details

NAV details

49 / 100

The load structure must be

Disclosed in the KIM

Kept confidential

Mentioned only on the website

Disclosed after investment

50 / 100

In case of a close-ended scheme, the offer document must mention

AMC’s annual turnover

Custodian’s address

Bank branch details

Maturity date

51 / 100

The performance of mutual fund schemes must be compared with

Any scheme chosen by AMC

SEBI-approved benchmark index

Government securities only

Past AMC performance

52 / 100

The offer document must contain details of

AMC and trustee company

Only fund managers

Only distributors

Only SEBI

53 / 100

Which of these is not included in KIM

Scheme objective

Load structure

Risk factors

Trust deed

54 / 100

Addendums to offer documents are issued when

Custodian is replaced

AMC changes office location only

There is any material change in the scheme

Fund manager changes

55 / 100

The trust deed must be

Approved by SEBI

Approved by AMFI

Approved by RBI

Not approved by any authority

56 / 100

The SAI must be

Updated annually

Updated monthly

Updated only at scheme launch

Updated once in 5 years

57 / 100

The KIM must be provided to an investor

Before accepting the application

After allotment of units

Along with dividend payout

Along with dividend payout

58 / 100

The SID must be updated

Monthly

Annually

Half-yearly

Once in 3 years

59 / 100

Which of the following is mandatory in mutual fund advertisements

Risk factors

Fund manager’s CV

AMC dividend history

Custodian details

60 / 100

The KIM must be

Filed with SEBI before launch

Sent to all investors every month

Displayed only at AMC office

Given only to distributors

61 / 100

The maximum validity period for an addendum to an offer document is

Until replaced/updated

3 months

6 months

1 year

62 / 100

The legal document constituting the mutual fund is

SID

SAI

Trust deed

KIM

63 / 100

The self-regulatory organization for mutual fund distributors in India is

AMFI

SEBI

RBI

NISM

64 / 100

SEBI regulations require a mutual fund to publish scheme NAVs

Once a week

Daily

Monthly

Quarterly

65 / 100

The advertisement of mutual funds must carry the disclaimer

Mutual funds are safe

Mutual fund investments are subject to market risks

Mutual funds guarantee returns

Mutual funds are government-backed

66 / 100

KYC compliance for mutual fund investors is governed by

SEBI KYC Registration Agencies

RBI

AMFI

Ministry of Finance

67 / 100

The maximum initial subscription amount for micro-SIPs without PAN is

Rs. 25,000=00

Rs. 50,000=00

Rs. 75,000=00

Rs. 1,00,000=00

68 / 100

The TER must be disclosed by mutual funds

Only in annual report

Daily on AMC website

Quarterly

Not required

69 / 100

SEBI mandates half-yearly disclosures of

Scheme performance only

Scheme’s unaudited financial results

AMC profit & loss

Custodian reports

70 / 100

The load that can be charged on mutual funds currently is

Entry load – allowed, exit load – nil

Entry load – nil, exit load – allowed

Both entry and exit loads allowed

No loads allowed

71 / 100

The cooling-off period for redressal of investor grievances through SEBI SCORES is

15 days

30 days

45 Days

60 Days

72 / 100

SEBI regulations require that scheme information documents be updated

Monthly

Quaterly

Six Monthly

Yearly

73 / 100

In the mutual fund structure, the ultimate responsibility to safeguard investors’ interests lies with

AMC

AMFI

trustees

sponsorer

74 / 100

The legal document defining the mutual fund trust is called

Trust deed

Scheme information document

Offer document

KIM

75 / 100

The sponsor must have at least ___ years of experience in financial services

1 Year

2 Year

3 Year

No experience is required

76 / 100

The board of trustees must meet at least

Once a month

Once every two months

Once in six months

Once a year

77 / 100

The compliance officer of an AMC ensures

Funds are invested in equities only

Adherence to regulatory requirements

NAV is calculated daily

Dividends are declared monthly

78 / 100

The investment decisions of a mutual fund are taken by

Trustees

Custodian

Fund managers

SEBI

79 / 100

The trust deed of a mutual fund must be approved by

Trustees only

SEBI

Sponsor only

AMC board

80 / 100

The custodian must be registered with

SEBI

RBI

Ministry of Finance

IRDAI

81 / 100

SIP in mutual funds stands for

Simple Interest Plan

Standard Income Plan

Systematic Investment Plan

Structured Investment Policy

82 / 100

The AMC’s board must have at least ___ independent directors.

One-fourth

One-third

Half

Two-thirds

83 / 100

SEBI mandates that at least ___% of trustees should be independent

20%

33%

50%

10%

84 / 100

The primary objective of a liquid fund is

Long-term capital appreciation

Capital Appreciation in Medium Term

Short-term liquidity with low risk

High growth

85 / 100

Which of these is NOT an advantage of mutual funds?

Professional management

Diversification

High cost due to economies of scale

Liquidity

86 / 100

The lock-in period for ELSS funds is

1 year

2 Year

3 Year

Non of these

87 / 100

A growth option in a mutual fund means

Periodic dividend payouts

Profits reinvested in the scheme

Capital protection

Guaranteed growth

88 / 100

ETFs differ from mutual funds mainly because

They have no NAV

They guarantee returns

They don’t hold securities

They can be traded on stock exchanges

89 / 100

Which type of mutual fund scheme invests mainly in debt securities

Equity fund

Balanced Fund

Debt Fund

Liquid Fund

90 / 100

An advantage of SIP over lump sum investment is

Higher returns always

Rupee cost averaging

No risk at all

Guaranteed income

91 / 100

The calculation of the NAV of a Mutual Fund is based on

Market value of assets minus liabilities

Number of units issued

Paid-up capital of AMC

SEBI guidelines only

92 / 100

The main source of income for mutual fund investors is

Fixed interest

Dividends and capital gains

Salary income

Rental income

93 / 100

Gilt-edged securities are issued by

Rematerialization

Digitization

Dematerialization

Tokenization

94 / 100

In the Indian context, call money refers to

Long-term borrowing

Funds lent for 1 to 14 days

Foreign currency loans

Retail deposits

95 / 100

Which is the most liquid form of investment?

Fixed deposits

Gold

Post RD

Real estate

96 / 100

Which of the following is NOT a money market instrument?

Certificate of Deposit

Commercial Paper

Equity share

Treasury Bill

97 / 100

Which market provides short-term funds to corporates

Capital market

Money market

Equity market

Derivatives market

98 / 100

Treasury bills are issued by

RBI on behalf of the Government

SEBI

NABARD

SIDBI

99 / 100

A mutual fund operates primarily in the

Money market only

Capital market

Foreign exchange market

Derivatives market only

100 / 100

Which organization regulates the mutual fund industry in India?

RBI

IRDAI

PFRDA

SEBI

Your score is

The average score is 63%

0%

Restart quiz

NISM VA Practice Paper 1 — 100 Questions

NISM VA Practice Paper 2 — 100 Questions

NISM VA Practice Paper 3 — 100 Questions

1. . NISM VA – MOCK TEST on Chapter 1

2.. NISM VA – MONK TEST on CHAPTER 2

3. NISM VA – MONK TEST on CHAPTER 3

4. NISM- VA – MONK TEST on CHAPTER 4

5. NISM- VA – CHAPTER 5 on MONK TEST

6. NISM- VA – CHAPTER 6 on MONK TEST

7. NISM- VA – CHAPTER 7 on MONK TEST

8. NISM- VA – CHAPTER 8 on MONK TEST

9. NISM- VA – CHAPTER 9 on MONK TEST

10. NISM- VA – CHAPTER 10 on MONK TEST

11. NISM- VA – CHAPTER 11 on MONK TEST

12. NISM- VA – CHAPTER 12 on MONK TEST

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