NISM 5a mock test 3

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 mock 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 of 100 MCQs. 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 or thrice 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-VA-Practice Paper 3

1 / 100

The risk-o-meter for mutual funds is mandated by

SEBI

RBI

AMFI

AMC

2 / 100

Which of the following is a hybrid mutual fund

Large-cap equity fund

Multi-asset allocation fund

Short-term debt fund

Sectoral fund

3 / 100

Which one of the following is a non-systematic risk

Political instability

War

Company management change

Inflation

4 / 100

Which is TRUE regarding an arbitrage fund

Always gives returns higher than equity funds

Takes advantage of price difference in cash and derivatives markets

Invests only in gold

Is risk-free

5 / 100

Which mutual fund type is least impacted by interest rate risk?

Long-duration bond fund

Overnight fund

Gilt fund

Dynamic bond fund

6 / 100

Which of these is a systematic risk?

Company management fraud

Regulatory change

Product recall in a company

Labour strike in one factory

7 / 100

Which of the following statements is TRUE regarding the expense ratio of a mutual fund?

It is fixed for the scheme’s life.

It changes daily with the NAV.

It can vary over time but is capped by SEBI

It must be the same for all schemes of an AMC.

8 / 100

Which investment style focuses on undervalued stocks

Growth type

Value type

Moment type

Index investing

9 / 100

Which fund typically has the lowest expense ratio

Exchange Traded Fund

Small Cap Fund

Midcap Fund

Thematic Fund

10 / 100

Which risk is highest in sectoral mutual funds?

Liquidity Risk

Credit Risk

Inflation Risk

Concentration risk

11 / 100

Which of the following is an example of a closed-ended fund?

Fixed Maturity Plan

Liquid Fund

Index Fund

Balanced Advantage Fund

12 / 100

What does “Expense Ratio” represent?

Fund's cost as % of assets

Fund's risk level

Fund's NAV growth

Investor’s return

13 / 100

Which mutual fund category has the highest market risk

Large cap Mutual Fund

Flexi cab Mutual Fund

Mid Cap Mutual Fund

Small Cap Mutual Fund

14 / 100

A debt fund faces credit risk when

Interest rates rise

Inflation increases

Currency weakens

The issuer defaults

15 / 100

Under SEBI guidelines, a liquid fund must invest in securities with a maturity of up to

30 days

60 days

91 days

6 Months

16 / 100

Which document explains the rights of mutual fund unit holders

Offer Document

Statement of Additional Information

Key Information Memorandum

Scheme Fact Sheet

17 / 100

Which scheme type is most suitable for an investor seeking capital protection and safety

Equity Growth Fund

Sector Fund

Gilt Fund

Large cap Fund

18 / 100

In a Systematic Withdrawal Plan (SWP), which NAV is applied?

NAV at start of SWP

NAV on withdrawal date

Average NAV of month

NAV of previous month-end

19 / 100

A fund's beta is 0.8. What does it indicate?

The fund is more volatile than the market

The fund is 20% More volatile than the market

The fund is 20% less volatile than the market

No relation to volatility

20 / 100

Under SEBI rules, AMCs must disclose portfolio holdings of schemes at least

Daily

Weekly

Yearly

Monthly

21 / 100

A mutual fund scheme’s portfolio turnover ratio indicates

Fund expense ratio

Frequency of portfolio changes

Fund risk category

Benchmark deviation

22 / 100

Which of these is not a money market instrument?

Commercial paper

Treasury bills

Certificate of deposit

Convertible debenture

23 / 100

An open-ended mutual fund can accept fresh investments

Only during NFO

Only during trading hours

Only on weekdays

Any time

24 / 100

Which mutual fund type offers passive management?

Index Fund

ELSS Fund

Sectoral Fund

Midcap Fund

25 / 100

Which document contains the key highlights and condensed information about a scheme?

Statement of Additional Information

Key Information Memorandum

Scheme Information Document

Offer Document

26 / 100

In SIP investments, rupee cost averaging helps

Lock returns

Average the cost per unit

Reduce total invested amount

Increase risk

27 / 100

Which risk in a mutual fund is most impacted by RBI repo rate changes?

Inflation risk

Interest rate risk

Credit risk

Liquidity risk

28 / 100

Which of the following ratios is useful for determining the downside protection of a Mutual fund?

Alpha Ratio

Sharpe Ratio

Treynor ratio

Sortino Ratio

29 / 100

What does the “Alpha” value indicate in mutual fund analysis?

Fund's volatility

Downside deviation

Excess return over benchmark

Interest rate sensitivity

30 / 100

Which of the following schemes must invest a minimum of 80% of total assets in debt securities of government?

Liquid Fund

Credit Risk Fund

Gilt Fund

Balanced Fund

31 / 100

Which NAV is applicable for mutual fund redemption if the request is submitted at 2:45 PM ?

Next day’s NAV

Previous day’s NAV

Same day’s NAV

Weekly NAV

32 / 100

Which risk refers to the inability to sell securities quickly at a fair price?

Credit risk

Liquidity risk

Inflation risk

Interest rate risk

33 / 100

The Total Expense Ratio (TER) for a debt fund with AUM above ₹500 crore is capped at

0.5%

0.75%

1.00%

1.25%

34 / 100

Which of the following ratios measures a fund's performance relative to risk-free return?

Sharpe Ratio

Treynor Ratio

Sortino Ratio

Information Ratio

35 / 100

Which SEBI regulation primarily governs the advertisement code for mutual funds

SEBI (Mutual Funds) Regulations, 1996

SEBI (Issue of Capital) Regulations, 2000

SEBI (Portfolio Managers) Regulations, 2020

SEBI (Merchant Bankers) Regulations, 1992

36 / 100

Which scheme would be most suitable for a short-term corporate treasury surplus?

Overnight fund

Balanced advantage fund

Mid-cap equity fund

Long-duration gilt fund

37 / 100

Which section of the Income Tax Act provides tax benefits for investment in ELSS?

Section 24

Section 25

Section 80C

Section 10(38)

38 / 100

Under SEBI rules, mutual funds must publish their portfolio

Daily

Weekly

Quaterly

Monthly

39 / 100

In a SIP, rupee-cost averaging works best when

Market moves steadily upward

Market is volatile

Market is falling consistently

Non of these

40 / 100

In mutual funds, “drawdown” refers to

Total expenses charged

Decline from peak NAV to lowest point

Decrease in AUM due to redemptions

Loss in one trading day

41 / 100

For debt funds, “yield curve” inversion usually signals

Economic expansion

Possible recession

Rising inflation

Stable interest rates

42 / 100

A credit risk fund must invest at least what percentage of its portfolio in below highest-rated instruments?

50%

65%

70%

75%

43 / 100

Which is the most tax-efficient for an investor in the highest tax bracket seeking debt exposure?

Bank FD

Debt mutual fund with indexation

Savings account

Corporate deposit

44 / 100

Which of the following is an example of “liquidity risk” in mutual funds?

Fall in NAV due to rate hike

Difficulty in selling an illiquid security

Default by a bond issuer

Change in tax rules

45 / 100

The “Expense Ratio” of an index fund is generally

Higher than actively managed funds

Lower than actively managed funds

Same as active funds

Can't say

46 / 100

Which of the following captures the volatility of a mutual fund’s returns

Alpha

Beta

Standard deviation

Sharpe ratio

47 / 100

In debt markets, “credit spread” refers to

Difference between yields of short-term and long-term bonds

Difference between yields of government and corporate bonds

Difference between coupon and market yield

Difference between buy and sell price

48 / 100

NAV is calculated using which formula

(Total Assets / Total Liabilities) × Number of Units

(Total Liabilities – Total Assets) / Number of Units

(Total Assets – Total Liabilities) / Number of Units

(Total Assets – Cash) / Number of Units

49 / 100

A gilt fund invests in

Corporate bonds only

Government securities only

Mix of equity and bonds

Treasury bills and corporate bonds

50 / 100

The “Beta” of a portfolio measures

Sensitivity to market movements

Portfolio volatility

Portfolio return

Risk-adjusted return

51 / 100

Which document contains details of the load structure of a scheme?

SID

SAI

KIM

Factsheet

52 / 100

Which type of mutual fund scheme is most suitable for an investor needing daily liquidity?

Liquid fund

Equity fund

ELSS

Gilt fund

53 / 100

What is the maximum exposure to a single sector allowed for equity-oriented schemes under SEBI rules?

25%

30%

35%

40%

54 / 100

What is the minimum amount required to start a SIP in India as per SEBI regulations

₹500

₹1,000

₹5,000

) ₹2,000

55 / 100

Which SEBI circular introduced categorisation of mutual fund schemes

May 2017

January 2015

March 2018

December 2016

56 / 100

The “Portfolio Turnover Ratio” measures

Trading activity within the portfolio

Average maturity of the portfolio

Cash levels in the scheme

Dividend payout

57 / 100

Which is a hybrid mutual fund?

Large-cap equity fund

Balanced fund

Liquid fund

Gilt fund

58 / 100

Which scheme category invests a minimum of 65% in equity and equity-related instruments?

Arbitrage fund

Debt-oriented scheme

Equity-oriented scheme

Liquid scheme

59 / 100

Past performance of a mutual fund

Guarantees future returns

Does not guarantee future returns

Always indicates risk

Always indicates low volatility

60 / 100

Liquidity risk means

Risk of price fluctuations

Risk due to taxation

Risk of not finding buyers when selling securities

Risk of portfolio concentration

61 / 100

Interest rate risk impacts

Gold ETFs only

Debt funds

Equity funds only

Liquid funds only

62 / 100

Inflation risk affects

Real returns

NAV calculation

Beta values

Dividend payout

63 / 100

What is the maximum nomination allowed in case of Mutual Fund in India

3 nominations

4 nominations

5 nominations

10 nominations

64 / 100

The minimum SIP amount for most mutual funds in India is

100

200

500

1000

65 / 100

Mutual funds must send annual reports to unit-holders

within 3 months of Year end.

within 4 months of Year end.

within 5 months of Year end.

within 6 months of Year end.

66 / 100

Investors can pledge mutual fund units for

Tax exemption

Loan security

Free insurance

Additional units

67 / 100

Switch transactions in mutual funds are treated as

Fresh purchase and redemption

Transfer without tax implications

Dividend payouts

Bonus issue

68 / 100

The facility to automatically redeem part of the investment periodically is called

STP – Systematic Transfer Plan

SIP – Systematic Investment Pla

SWP – Systematic Withdrawal Plan

Auto SIP

69 / 100

Risk-o-meter must be updated

Weekly

Monthly

Quarterly

Yearly

70 / 100

KYC for mutual fund investors is mandatory under

RBI guidelines

SEBI guidelines

PMLA

FEMA

71 / 100

SEBI’s advertisement code ensures

Only equity funds are advertised

Misleading statements are avoided

NAV is fixed

TER is capped

72 / 100

Stamp duty on mutual fund purchase is

0.5 %

0.05 %

0.005 %

5%

73 / 100

Dividend income from mutual funds is taxed

at 10%

at 15%

As per income tax slab

it is exempted from Tax

74 / 100

Securities Transaction Tax (STT) applies on

Redemption of debt funds

Dividend from debt funds

Dividend from equity funds

Redemption of equity funds

75 / 100

STCG on debt funds is taxed at

10%

15%

20%

As per the income tax slab

76 / 100

LTCG on equity funds is taxed at

15% (above ₹1 lakh)

10% (above ₹1 lakh)

20% (above ₹1 lakh)

2% (above ₹1 lakh)

77 / 100

Equity-oriented funds are those with minimum equity allocation of

50%

55%

60%

65 %

78 / 100

In debt funds, interest rate risk is higher when

Duration is Medium

Duration is lower

Duration is longer

Non of these

79 / 100

Sortino ratio measures _____________ of Mutual Fund.

Total volatility

Downside deviation

Upside deviation

Market beta

80 / 100

The higher  Alpha Ratio of the fund indicates

Higher return as compared to peer competitors

Higher returns as compared to Normal returns

Higher returns as compared to Benchmark index

Non of these

81 / 100

A fund has a risk-free return of 12%, an average return of 28%, and a standard deviation of 8%. The Sharpe ratio is:

3

2

4

Non of these

82 / 100

If a Mutual fund has a beta of 1.5, it is expected to be

1.5 times less volatile than market

1.5 times more volatile than market

1.5 times volatile in ups and down of the market

Non of these

83 / 100

Sharpe ratio compares the excess return with

Benchmark return

Risk-free rate and volatility

Inflation rate

Market return only

84 / 100

Beta measures

Total risk

Systematic Risk

Unsystematic Risk

Credit risk

85 / 100

Standard deviation in mutual fund performance indicates

Average return

Skewness

Skewness

Volatility

86 / 100

---

An investor redeems units worth ₹1,00,000, and the exit load is 0.5%. The load charged will be

300

500

400

600

87 / 100

Peer group comparison in mutual funds means

Comparing with benchmark

Comparing scheme with different category funds

Comparing scheme with similar category funds

Comparing with foreign funds

88 / 100

Which of the following is best suited for calculating SIP returns

CAGR

XIRR

Absolute Returns

Non of these

89 / 100

Investor grievance redressal in mutual funds is handled through

RBI customer portal

SCORES platform by SEBI

AMFI complaint desk only

Portal of Ministry of Finance

90 / 100

Redemption proceeds from mutual funds must be paid within

2 working days for all funds

1 working day for liquid funds, 2 working days for others

1 working day for liquid funds, 3 working days for others

2 working day for liquid funds, 3 working days for others

91 / 100

CAS in mutual funds stands for

Common Asset Statement

Common Account System

Common Account Statement

Non of these

92 / 100

If NAV = ₹15 and 2% entry load applies, purchase price =

15.10

15.20

15.30

15.40

93 / 100

The TER must be disclosed

Weekly basis on AMC's Web site

Monthly basis on AMC's Web site

Daily Basis on AMC's Web site

Non of these

94 / 100

The full form of TER in a Mutual Fund is

Total Equity Ratio

Total Equal Ratio

Total Expenses Ratio

Total Expenses Return

95 / 100

Daily NAV for a debt scheme is computed based on

Historical cost

Mark-to-market

Purchase price

Redemption value

96 / 100

In a liquid fund, NAV changes are mainly due to

Equity market movements

Accrued interest

Currency fluctuation

Commodity prices

97 / 100

A scheme levies 0.25% entry load and 1% exit load. If purchase NAV is ₹40 and the redemption after 6 months is at ₹42, the effective return is:

3%

3.5%

3.69%

3.75%

98 / 100

If the NAV before dividend is ₹25 and a dividend of ₹2 per unit is declared, what will be the ex-dividend NAV?

21

22

23

24

99 / 100

A scheme’s AUM is ₹200 crore. TER is 1.8%. The annual expenses are closest to

36 Lakhs

3.6 Lakhs

1.8 Lakhs

2.8 Lakhs

100 / 100

An open-ended equity fund declares a NAV of Rs. 50 on a day. The exit load is 1% and the investor redeems 1,000 units. How much will they receive?

Rs. 50,000=00

Rs. 49,500=00

49,000=00

48,500=00

Your score is

The average score is 58%

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

13. Home