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
An investment adviser who provides advice on securities without SEBI registration is liable to:
Answer: Monetary penalty and imprisonment under SEBI Act
Providing unregistered investment advisory services violates the SEBI Act, 1992 and is subject to both monetary penalties and criminal prosecution.
Duration of a bond is best described as:
Answer: The weighted average time to receive the bond's cash flows
Duration (Macaulay Duration) is the weighted average time to receive cash flows, used to measure interest rate sensitivity.
Which investment product offers guaranteed returns and is regulated by the Insurance Regulatory and Development Authority of India (IRDAI)?
Answer: Guaranteed Return Insurance Plans
Guaranteed return insurance plans (like traditional endowment or whole life plans) fall under IRDAI regulation and promise contractually guaranteed returns.
A client aged 60 with no liabilities and a pension income wants to grow wealth for the next 15 years. The most appropriate equity allocation would be:
Answer: 50–60% given the long horizon and stable income
A 15-year horizon with stable pension income supports moderate-to-aggressive equity exposure; a balanced 50–60% allocation aligns risk capacity with growth objectives.
The practice of an investment adviser executing large personal trades in a security just before recommending it to clients is called:
Answer: Front running
Front running involves trading on advance knowledge of client or advisory orders to profit personally before the market reacts.
Rebalancing a portfolio means:
Answer: Realigning portfolio weights back to the target allocation after market movements
Rebalancing restores the original target asset allocation after market movements cause weights to drift, maintaining the intended risk profile.
Under SEBI IA Regulations, an individual investment adviser must meet which minimum qualification requirement?
Answer: Post-graduate degree or professional qualification in finance/economics plus NISM certification
SEBI requires individual IAs to hold a post-graduate degree or equivalent professional qualification in a relevant field AND pass the NISM-Series-X-A certification.