NISM INVESTMENT ADVISER LEVEL 1 - 1
NISM INVESTMENT ADVISER LEVEL 1
Mock Test with Answer key - Click Here >>
Q 1. What can happen if there is a cash flow mismatch, even when someone spends less than what they earn?
a) Accumulation of wealth
b) Short-term borrowings
c) Increase in savings
d) Delay in expense payments
Q 2. How is the Liquidity Ratio calculated?
a) Monthly Expenses ÷ Liquid Assets
b) Liquid Assets × Monthly Expenses
c) Liquid Assets – Monthly Expenses
d) Liquid Assets ÷ Monthly Expenses
Q 3. Which type of instrument issued by the Central Government has an original maturity of less than one year?
a) Treasury Bills
b) Bonds
c) State Development Loans (SDLs)
d) Commercial Paper
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.
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
Q 6. What is the savings ratio in the provided household budget?
a) 12.5%
b) 18.4%
c) 24.8%
d) 42.7%
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
Q 8. According to the Capital Asset Pricing Model (CAPM), what is the cost of equity (Ke)?
a) Risk-Free Rate (Rf) only
b) Market risk premium (MRP) only
c) Beta (β) only
d) Rf, β, and MRP
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
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) A shorter duration is preferred for depreciating assets.
d) Vehicle loans are always for 7 years.
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
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
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
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
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