Investment Advisor

FREE NISM Series X-B — Investment Adviser (Level 2) Question and Answers

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Which of the following has experience working with several insurance providers?

Correct! Wrong!

Explanation:
Insurance brokers work directly with people and businesses to determine the extent of their insurance needs, offering experience in a variety of insurance products and risk management. With this knowledge, insurance brokers compare policies from several insurance providers to locate the one that fits their clients' needs the best.

Which of the following MS Excel functions can be used to calculate an EMI for a loan?

Correct! Wrong!

Explanation:
Make Loan EMI Calculations in Excel Additionally, you can figure out your EMIs using the Excel worksheet. To compute EMIs in Excel, you must utilize the PMT function. The Excel formula for the EMI calculator employs the following syntax: PMT (rate, nper, pv).

Which of the following determines how many shares in a public offering are distributed among various investor categories?

Correct! Wrong!

Explanation:
The Securities and Exchange Board of India is known as SEBI. It is a statutory regulatory agency that the Indian government set up in 1992 to control the securities market and safeguard the interests of investors who buy securities. Mutual funds and the stock market are likewise subject to SEBI regulation.

The riskiest investment is with __________.

Correct! Wrong!

Explanation:
Stock will be more volatile than the index if its beta value is greater than 1, meaning that stock movements will be larger than those of the index on average. Because of this, a high-beta stock might rise above the index during rallies but collapse considerably more dramatically during corrections.

Which one of the following asset allocations is market-dependent?

Correct! Wrong!

Explanation:
An active management portfolio technique known as tactical asset allocation changes the percentage of assets held in different categories to profit from anomalies in market pricing or robust market sectors. By taking advantage of particular market conditions, this method enables portfolio managers to add value. As soon as they achieve the intended short-term profits, managers return to the portfolio's original asset mix, making it a moderately active strategy.

A stock's high turnover is a sign of higher _________.

Correct! Wrong!

Explanation:
Equities with higher share turnover rates are thought to be more tradable and liquid, whereas stocks with lower share turnover ratios indicate greater illiquidity. A stock's share turnover ratio will probably be higher for a specific time period if good news or negative news drives trading activity. A higher share turnover may also be a sign of momentum.

Which investment among them is most susceptible to inflation?

Correct! Wrong!

Explanation:
Inflation can negatively affect the performance of assets with a fixed yearly return, such as conventional bonds or bank certificates of deposit, because you receive the same interest payment each year. For instance, if you receive a $100 annual payment, the value of that payment would decrease yearly due to inflation.