Investment Advisor NISM Series-X-A: Investment Adviser (Level 1) 2

Question 1

Under SEBI (Investment Advisers) Regulations, 2013, what is the minimum net worth requirement for a non-individual investment adviser?

Accepted Answer

INR 25 lakh

Answer

Non-individual investment advisers must maintain a minimum net worth of INR 25 lakh as per SEBI IA Regulations.

Question 2

Which document must an investment adviser provide to a client before rendering any investment advice?

Accepted Answer

Disclosure document

Answer

SEBI regulations require investment advisers to provide a disclosure document containing details about the adviser, services, fees, and conflicts of interest before advising.

Question 3

An investment adviser recommends a mutual fund scheme in which the adviser's family member holds a significant stake. This is best described as:

Accepted Answer

A conflict of interest

Answer

Recommending products where the adviser or related parties have financial interests constitutes a conflict of interest that must be disclosed.

Question 4

The Sharpe Ratio measures portfolio performance by comparing excess return to:

Accepted Answer

Standard deviation

Answer

The Sharpe Ratio = (Portfolio Return − Risk-Free Rate) / Standard Deviation, measuring return per unit of total risk.

Question 5

Under the Know Your Client (KYC) process, which authority maintains the central KYC registry in India?

Accepted Answer

CKYCRR

Answer

The Central KYC Records Registry (CKYCRR) managed by CERSAI maintains the central repository of KYC records in India.

Investment Advisor Practice Test

Investment Advisor Practice Test

Investment Advisor NISM Series-X-A: Investment Adviser (Level 1) 2