NISM Series X-B Investment Adviser (Level 2) Cert. Mock Test - 3

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NISM Series X-B Investment Adviser (Level 2) Cert. Mock Test – 3

1 / 50

How does a pure risk differ from a speculative risk ?

a) A pure risk always has an environmental cause whereas a speculative risk always involves human Error.

b) A pure risk can be measured in probability terms whereas a speculative risk cannot.

c) A pure risk is not subject to regulatory control but a speculative risk always is.

d) A pure risk only leads to the possibility of a loss, whereas a speculative risk may lead to a gain.

2 / 50

Saurabh, aged 30, wants to retire at 45. He wants to maintain his present living standard. He spends Rs. 3,25,000 a year. He is expected to live upto 85. Inflation is to be assumed at 4% p.a and expected returns are 7% p.a. What is the retirement corpus required by Saurabh at his age 45 and what amount should he save every year end to meet his plan? His present investments are Rs 10,00,000?

a) Rs. 13182815; Rs. 454805

b) Rs. 15182815; Rs. 454705

c) Rs. 14182815; Rs. 454605

d) Rs. 13182815; Rs. 454505

3 / 50

What is the Maximum limit/ Government notified amount of gratuity payable as per the Act?

a) Rs 3,50,000

b) Rs 10,00,000

c) Rs 5,00,000

d) Rs 20,00,000

4 / 50

The following is the premise of Prospect Theory:

a) Choices are evaluated relative to a reference point (which is their wellbeing);

b) People are risk-averse about gains (realizing it early) but risk seeking about losses (holding to them longer)

c) Monetary losses hurt more than monetary gains

d) All the above

5 / 50

A person who prepares the Will is called a/an _______.

a) Testator

b) Deceased

c) Executor

6 / 50

Pension received from the former employer is classified under the head__________?

a) Income from Salaries

b) Income from other sources

c) Income from capital Gain

d) Gratuity

7 / 50

Which of the following depends on the market?

a) Strategic asset allocation

b) Tactical asset allocation

c) Investor risk profile

d) Optimal Asset Allocation

8 / 50

If the NPS subscriber’s grievance is not resolved within 30 days from the submission of the grievance to the NPS Trust then the subscriber can appeal to the _______________.

a) CRA

b) NPS Trustees

c) Ombudsman

d) SEBI

9 / 50

The number alloted in NPS is:

a) Personal Pension Account Number

b) Personal Retirement Account Number

c) Permanent Retirement Account Number

d) Permanent Pension Account Number

10 / 50

A standard deduction of _______ is allowed from salary income.

a) Rs 1,000 per month

b) Rs 40,000

c) Rs 30,000

d) Rs.50,000

11 / 50

What is a necessary condition for a risk to be considered insurable?

a) Small number of exposure units

b) Loss must be non-accidental

c) Loss can be indeterminable

d) Loss must be fortuitous and unintentional

12 / 50

EMI for a loan can be calculated using the _________ function in MS Excel.

a) PMT

b) PV

c) EMI

d) NPV

13 / 50

Arun’s taxable annual income is Rs. 15 lakh. He is informed that the interest income of Rs. 50,000 from his bank deposits will be taxed at the marginal rate applicable to him. What is the applicable tax rate for Arun?

a) 20%

b) 10%

c) 40% Since the total income exceeds 15 Lakhs

d) 30%

14 / 50

In a critical illness rider, the benefit is payable at the time of ______.

a) Producing the medical bills

b) Diagnosis of the illness

c) Death of the life insured

d) Discharge from the hospital

15 / 50

The clubbing provision does not apply in the case of Family Settlements.

a) False

b) True

16 / 50

In the case of the Post Office Monthly Income Scheme, the maximum investment amount is _______ for a singly held account.

a) Rs. 3.5 lakhs

b) Rs. 4.5 lakhs

c) Rs. 2.5 lakhs

d) Rs. 5.5 lakhs

17 / 50

The period when the annuitant receives the payments is known as the _____________.

a) Accumulation Phase

b) Transition Phase

c) Distribution Phase

d) None of the above

18 / 50

For a non-resident, which of the following is NOT subject to taxation?

a) Income accrues or arises or is deemed to accrue or arise in India

b) Income received or is deemed to be received in India

c) Income accrues or arises outside India if it is derived from a business controlled in India or from a profession set up in India

d) None of these

19 / 50

Life insurance, insurance for the maintenance and replacement of plant and machinery, and annuities are all examples of insurance products designed to fulfill which of the following needs?

a) Asset Protection needs

b) Income Protection needs

c) Job Protection needs

d) Income Replacement needs

20 / 50

To avail the benefit of section 54, the asset transferred should be ____________ , specifically a residential house property.

a) Long-term capital asset

b) Short-term or long-term capital asset as per the choice of the assessee

c) Short-term or long-term capital asset as per the choice of the Assessing Officer

d) Short-term capital asset

21 / 50

Health Insurance and Motor Insurance supplement _________needs of an Investor.

a) Asset Protection needs

b) Income replacement needs

c) Income Protection needs

d) All of the above

22 / 50

If an investor is in a 30% tax bracket, then a post-tax return of 8.4% is equivalent to ________ in pre-tax terms.

a) 14%

b) 13%

c) 15%

d) 12%

23 / 50

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

a) PPF

b) NSC

c) NPS

d) SCSS (Senior Citizen Saving Scheme)

24 / 50

Which of the following statements is/are true regarding Securities Lending and Borrowing (SLB)?

a) Securities traded in F&O segment and liquid Index Exchange Traded Funds (ETFs) are eligible

b) SLB executed on automated, screen-based, order-matching platform

c) Both (a) and (b)

d) None of the above

25 / 50

If a taxpayer owns a capital asset for more than 36 months before transferring it, it is considered a long-term capital asset. However, for specific assets like listed shares (equity or preference), units of equity-oriented mutual funds, and shares of listed companies on a recognized stock exchange in India, the holding period is reduced to 12 months instead of 36 months.

a) False

b) True

26 / 50

A standard deduction of _________% of the Net Annual Value is permitted for _________ properties.

a) 30%; Self occupied properties

b) 30%; Let out properties

c) 20%; Self occupied properties

d) 20%; Both let out and self occupied properties

27 / 50

Losses from the sale of mutual funds cannot be offset against:

a) income from salary

b) income from dividends and interest

c) income from residential property

d) All of the above

28 / 50

What is included in capital assets among the following?

a) Agricultural land in India

b) Route permit

c) Goodwill

d) Only 1 and 2

29 / 50

A partial withdrawal is permitted from the accumulated pension wealth in the NPS A/c, not exceeding _________ of the contributions, excluding any contribution made by the employer, if applicable.

a) 10%

b) 25%

c) 50%

d) 30%

30 / 50

Pure risk is a type of risk that involves:

a) Chances of loss

b) Chances of gain

c) Chances of no loss or partial loss

d) Either A or B

31 / 50

The account is a voluntary investment account of the subscriber under NPS.

a) Tier I

b) Tier II

c) Both Tier I and II

d) Either Tier I or Tier II as specified by the subscriber while filling the application form

32 / 50

If the two persons are related by blood or adoption, wholly through females then what is said for one person to another:

a) Cognate

b) Agnate

c) Urine Blood Relations

d) None of the above

33 / 50

Which of the following statements about reverse mortgage is FALSE?

a) The rate of interest and the nature of interest (fixed or floating) will be decided by the lender.

b) Any transfer of a capital asset in a transaction of reverse mortgage shall be regarded as a transfer.

c) A borrower, under a reverse mortgage scheme, will be liable to income tax only at the point of alienation of the mortgaged property by the mortgagee for the purposes of recovering the loan.

d) The Reverse Mortgage loan can be prepaid at any time during the currency of the loan.

34 / 50

__________ is a part of salary that is received by an employee from his/her employer in gratitude for the services offered by the employee in the company.

a) Gratuity

b) Annuity

c) PF

d) PPF

35 / 50

Securities Transaction tax is paid as per the tax slab (marginal rate) of the investor.

a) True

b) Flase

36 / 50

An Investor invests in Equity and Gold ETF in the ratio 70:30. However after some time he feels that Equity markets will underperform in the short term while Gold will give good returns over the same time frame. He switches the allocation to 70:30 in favor of Gold ETF. This is an example of _________.

a) Strategic Asset Allocation

b) Tactical Asset Allocation

c) Fixed Asset Allocation

d) Flexible Asset Allocation

37 / 50

Gratuity in the hands of government employee is ____________.

a) Fully taxable

b) Fully exempted from tax

c) Taxable on maturity

38 / 50

Chintu 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?

a) Rs.1.55 crores

b) Rs.2.44crores

c) Rs.1 crore

d) Rs.1.78crores

39 / 50

Maximum tenure of a RML is______________________?

a) 10 Years

b) 15 Years

c) 20 Years

d) 25 Years

40 / 50

An investor under the National Pension System can choose which of the following asset classes?

a) Corporate debt

b) Government Securities

c) Equities

d) Alternative Investment Funds

e) Any of the above

41 / 50

Growth-oriented investments are suitable for which stage of retirement savings?

a) Distribution stage

b) Income stage

c) Accumulation stage

d) Investment stage

42 / 50

How many parties are required to form a trust?

a) Two

b) Three

c) Four

d) Ten

43 / 50

Life expectancy directly affects which of the following features of the retirement goal?

a) Period in retirement

b) Remaining working years

c) Monthly expenses in retirement

d) Returns earned on the retirement corpus

44 / 50

Who amongst the following is not a Class I her heir according to the Hindu Succession Act?

a) Father

b) Mother

c) Son of a Predeceased Daughter

d) None of the above

45 / 50

Who cannot invest in Sovereign Gold Bonds?

a) An individual on behalf of a minor individual

b) A Company

c) A Private Trust

d) A Charitable Institute

46 / 50

The retirement corpus may require review –

a) Every year

b) Every time there is a significant change in financial situation

c) Closer to the distribution period

d) Never

47 / 50

Inflation does which of the following to retirement planning?

a) Increases the value of the corpus created

b) Reduces the periodic savings required

c) Increases the retirement corpus required

d) Reduces the nominal return generated by an investment

48 / 50

What do you mean by “Dying Intestate”?

a) A person is deemed to die intestate in respect of property of which he or she has not made a testamentary disposition capable of taking effect

b) The descendant does not leave behind a Valid Will

c) Both of the above

d) None of the above

49 / 50

Short term capital loss can be set off against which income?

a) Short term capital gains

b) Long term capital gains

c) Long-term or Short-term capital gains

d) Any Income

50 / 50

ABC Tech Ltd. issued preference shares of face value Rs. 10 for Rs. 75. Mr. Suraj (an Indian resident) was allotted 2000 preference shares at Rs. 75 each. On the date of allotment, the fair market value of this share was Rs. 65. What is the income taxable in the hands of ABC Tech Ltd.

a) Nil

b) Rs. 20,000

c) Rs. 65,000

d) Rs. 30,000

Your score is

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NISM Series X-B Investment Adviser (Level 2) Cert. Mock Test - 3

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