Q 1. What can happen if there is a cash flow mismatch, even when a person spends less than what they earn?

a) Accumulation of wealth

b) Short-term borrowings

c) Increase in savings

d) Delay in expense payments

Report

Q 2. How is the Liquidity Ratio calculated?

a) Monthly Expenses Ã· Liquid Assets

b) Liquid Assets Ã— Monthly Expenses

c) Liquid Assets â€“ Monthly Expenses

d) Liquid Assets Ã· Monthly Expenses

Report

Q 3. Which type of instrument issued by the Central Government has original maturities of less than one year?

a) Treasury Bills

b) Bonds

c) State Development Loans (SDLs)

d) Commercial Paper

Report

Q 4. What is net worth in the context of a personal balance sheet?

a) Total income.

b) Total liabilities.

c) The value of physical assets.

d) Short-term imbalances.

Report

Q 5. What is the main reason for the lack of success of Floating Rate Bonds (FRBs) in the market?

a) High retail participation

b) Fixed coupon payments

c) Low retail participation

d) Long maturity periods

Report

Q 6. What is the savings ratio in the provided household budget?

a) 12.5%

b) 18.4%

c) 24.8%

d) 42.7%

Report

Q 7. What makes overdraft a flexible way to access short-term credit?

a) High interest rates

b) Long repayment tenor

c) Fixed spending limit

d) Ability to use more than the account balance

Report

Q 8. According to the Capital Asset Pricing Model (CAPM), what is the cost of equity (Ke) composed of?

a) Risk-Free Rate (Rf) only

b) Market risk premium (MRP) only

c) Beta (Î²) only

d) Rf, Î², and MRP

Report

Q 9. How does cash flow mismanagement impact individuals and families?

a) It reduces health problems

b) It leads to empowerment

c) It disrupts normal life and peace

d) It improves financial control

Report

Q 10. What is a key consideration when choosing the duration of a vehicle loan?

a) Longer duration results in lower EMIs.

b) Longer duration increases the total interest paid.

c) Shorter duration is preferred for depreciating assets.

d) Vehicle loans are always for 7 years.

Report

Q 11. What motivates a business to meet higher standards of disclosure and transparency in the primary market?

a) Desire to limit the number of investors

b) Pressure from regulatory authorities

c) Lack of interest from prospective investors

d) Need to raise capital from new investors

Report

Q 12. What role do SEBI Registered Investment Advisers (RIAs) play?

a) They are distributors of financial products

b) They pool money from investors and invest on their behalf

c) They provide investment advice and are accountable to their investors

d) They are responsible for the administration of unit holders' accounts

Report

Q 13. Why can banks, in a banking support economy, face challenges in funding very long period capital expenditure of corporates through bank loans?

a) Because banks invest in debt instruments issued by corporates

b) Because banks raise funds through long-term deposits

c) Because banks have short or medium-term obligations

d) Because banks have a well-functioning debt market

Report

Q 14. What is the objective of the Investment Adviser in the context of retirement planning?

a) To delay retirement

b) To demonstrate the adequacy of retirement funds

c) To discourage retirement planning

d) To ensure the client saves enough for a comfortable retired life

Report

Q 15. What is the purpose of categorizing outflows into mandatory contributions, loan servicing, essential expenses, and lifestyle expenses?

a) To encourage overspending

b) To create confusion in budgeting

c) To understand the current prioritization

d) To promote discretionary spending

Report

Q 16. What role does the on-line monitoring system play in the stock exchange?

a) Monitoring the price movements of all listed securities

b) Managing the Core Settlement Guarantee Fund

c) Providing loans to trading members

d) Facilitating off-line trading activities

Report

Q 17. Why do equity investors typically have the potential for higher returns compared to debt investors, despite higher associated risks?

a) Equity investments allow investors to participate in a company's profits and growth

b) Equity investments are guaranteed by fixed interest rates.

c) Equity investors are less affected by market fluctuations.

d) Equity investments are less volatile than debt investments.

Report

Q 18. What is the regulatory framework governing the trading of derivatives in India?

A) RBI Act 1934

B) Securities Contracts (Regulation) Act, 1956 (SC(R)A)

C) SEBI Act 1992

d) Companies Act 2013

Report

Q 19. What is the primary function of depository participants (DPs)?

a) Managing risk in the overall financial system.

b) Selling new issuances of securities to investors.

c) Holding securities and managing bank accounts for institutional investors.

d) Conducting screen-based electronic trading of securities.

Report

Q 20. What is the purpose of the index-based market-wide circuit breaker system?

a) To determine the face value of securities

b) To regulate the number of trades in the market

c) To bring about a coordinated trading halt in case of abnormal index movements

d) To measure the efficiency of corporate management

Report

Q 21. Who is allowed to purchase National Savings Certificates (NSCs)?

A) NRIs and HUFs

B) Only individuals

C) Companies and trusts

d) Both individuals and companies

Report

Q 22. What is the primary role of FIMMDA in the derivatives markets?

A) To provide investment advice to individuals

B) To act as an arbitrator for disputes between individuals

C) To define standardized derivative contracts

d) To function as the principal interface with regulators on market-related issues

Report

Q 23. Why might keeping the EMI amount the same while changing the loan tenure be advantageous?

a) It reduces the loan amount

b) It leads to optimal financial stability

c) It helps in keeping track of consistent payments

d) It lowers the interest rate

Report

Q 24. How do stock markets contribute to efficient governance through changes in corporate control?

a) By fixing prices at predetermined levels

b) By regulating the issuance of securities

c) By serving as a market for efficient governance

d) By generating benchmark indices

Report

Q 25. What is a common characteristic of distressed securities?

a) Low risk and guaranteed returns

b) Availability at huge discounts

c) Prohibited for holding by institutional investors

d) Limited risk diversification opportunities

Report

NISM-Series-X-A Investment Adviser (Level 1) Certification Examination

NISM-Series-X-A Investment Adviser (Level 1) Certification Examination

Q 1. What can happen if there is a cash flow mismatch, even when a person spends less than what they earn?

Q 2. How is the Liquidity Ratio calculated?

Q 3. Which type of instrument issued by the Central Government has original maturities of less than one year?

Q 4. What is net worth in the context of a personal balance sheet?

Q 5. What is the main reason for the lack of success of Floating Rate Bonds (FRBs) in the market?

Q 6. What is the savings ratio in the provided household budget?

Q 7. What makes overdraft a flexible way to access short-term credit?

Q 8. According to the Capital Asset Pricing Model (CAPM), what is the cost of equity (Ke) composed of?

Q 9. How does cash flow mismanagement impact individuals and families?

Q 10. What is a key consideration when choosing the duration of a vehicle loan?

Q 11. What motivates a business to meet higher standards of disclosure and transparency in the primary market?

Q 12. What role do SEBI Registered Investment Advisers (RIAs) play?

Q 13. Why can banks, in a banking support economy, face challenges in funding very long period capital expenditure of corporates through bank loans?

Q 14. What is the objective of the Investment Adviser in the context of retirement planning?

Q 15. What is the purpose of categorizing outflows into mandatory contributions, loan servicing, essential expenses, and lifestyle expenses?

Q 16. What role does the on-line monitoring system play in the stock exchange?

Q 17. Why do equity investors typically have the potential for higher returns compared to debt investors, despite higher associated risks?

Q 18. What is the regulatory framework governing the trading of derivatives in India?

Q 19. What is the primary function of depository participants (DPs)?

Q 20. What is the purpose of the index-based market-wide circuit breaker system?

Q 21. Who is allowed to purchase National Savings Certificates (NSCs)?

Q 22. What is the primary role of FIMMDA in the derivatives markets?

Q 23. Why might keeping the EMI amount the same while changing the loan tenure be advantageous?

Q 24. How do stock markets contribute to efficient governance through changes in corporate control?

Q 25. What is a common characteristic of distressed securities?

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