NISM Series-X-A: Investment Adviser (Level 1) Flashcards
7 cards from real Investment Advisor practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 NISM Series-X-A: Investment Adviser (Level 1) flashcards as text
Under SEBI (Investment Advisers) Regulations, 2013, what is the minimum net worth requirement for a non-individual investment adviser?
Answer: INR 25 lakh
Non-individual investment advisers must maintain a minimum net worth of INR 25 lakh as per SEBI IA Regulations.
Which document must an investment adviser provide to a client before rendering any investment advice?
Answer: Disclosure document
SEBI regulations require investment advisers to provide a disclosure document containing details about the adviser, services, fees, and conflicts of interest before advising.
An investment adviser recommends a mutual fund scheme in which the adviser's family member holds a significant stake. This is best described as:
Answer: A conflict of interest
Recommending products where the adviser or related parties have financial interests constitutes a conflict of interest that must be disclosed.
The Sharpe Ratio measures portfolio performance by comparing excess return to:
Answer: Standard deviation
The Sharpe Ratio = (Portfolio Return − Risk-Free Rate) / Standard Deviation, measuring return per unit of total risk.
Under the Know Your Client (KYC) process, which authority maintains the central KYC registry in India?
Answer: CKYCRR
The Central KYC Records Registry (CKYCRR) managed by CERSAI maintains the central repository of KYC records in India.
A client with a 2-year investment horizon and low risk tolerance is best suited for which asset allocation?
Answer: 20% equity, 80% debt
Short horizons and low risk tolerance call for a predominantly debt-oriented portfolio to preserve capital.
Which of the following is NOT a fiduciary duty of a SEBI-registered investment adviser?
Answer: Ensuring client portfolio always generates profit
Advisers owe fiduciary duties including best-interest advice and disclosure, but cannot guarantee profits as markets involve inherent risk.