Sample Questions

NISM-Series-21B: Portfolio Managers Mock Tests — 5 random MCQs with answers & explanations

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These 5 questions are randomly selected (standard MCQs only, not case-based).

Q1 How can "Derivatives" be used by a manager?

A. Only for gambling.
B. For hedging risk, balancing the portfolio, or making extra profit (alpha). Correct Answer
C. They are not allowed for PMS.
D. Only for buying gold.

Explanation:

They are versatile tools that can act like insurance or help fine-tune a portfolio.

Marks: 1

Q2 Under SEBI rules, what is the minimum time a "designated person" must wait before doing an opposite trade (selling what they just bought)?

A. 30 days.
B. 3 months. Correct Answer
C. 6 months.
D. 1 year.

Explanation:

To prevent insiders from using secret info for quick profits, SEBI says they cannot do a "contra trade" (opposite trade) within 6 months of their last trade.

Marks: 1

Q3 Record of transactions to be maintained under the Prevention of Money Laundering Act includes Cash transactions of the value of more than ________. (NISM workbook)

A. Rs.10 lakh Correct Answer
B. Rs. 20 lakh
C. Rs. 25 lakh
D. Rs. 1 crore

Explanation:

PMLA requires maintaining records of all cash transactions exceeding Rs. 10 lakh.

Marks: 1

Q4 In India, the Central Government issues ____________. (NISM workbook)

A. Treasury bills
B. Dated securities
C. Both a & b Correct Answer
D. Certificate of deposits

Explanation:

The Central Government issues both Treasury bills (money market) and Dated securities (government bonds).

Marks: 1

Q5 In the Indian market, how does a "Commodity Option" function?

A. It gives the right to buy or sell physical gold or oil immediately.
B. It is an option to enter into a commodity futures contract. Correct Answer
C. It is only used for trading agricultural products like wheat.
D. It is a contract that never expires.

Explanation:

In India, when a commodity option expires, it doesn't result in the delivery of physical goods. Instead, it turns into a "futures" contract for that specific commodity.

Marks: 1

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