Sample Questions

NISM-Series-10B: Investment Advisor (Level 2) 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 In which of the following models of the NPS is the contribution always solely by the subscriber? (NISM workbook)

A. Government model
B. State government model
C. Corporate model
D. All citizens model Correct Answer

Explanation:

The All Citizens model is available to all Indian citizens on a voluntary basis, with contributions solely from the subscriber. Other models involve mandatory or employer contributions.

Marks: 1

Q2 When a business owner converts their inventory into a personal capital asset, what value is used as the cost for future tax calculations?

A. Original book value
B. Recorded asset value
C. Original cost of stock
D. Fair Market Value (FMV) on the conversion date Correct Answer

Explanation:

The Fair Market Value of the stock on the day it is converted into a capital asset is considered its new cost of acquisition.

Marks: 1

Q3 When a person reaches the "distribution stage" of retirement, what is their most important requirement from their investments?

A. Compounding returns
B. Capital growth
C. High-risk returns
D. Regular income Correct Answer

Explanation:

In the distribution stage, the goal is to use the saved money (corpus) to generate a steady income to pay for daily living expenses.

Marks: 1

Q4 What is the primary reason to transfer your EPF balance when you switch to a new job?

A. The new employer might offer higher interest
B. To avoid losing the benefit of compounding on the total corpus Correct Answer
C. To prevent the old employer from withholding funds
D. It is a mandatory rule set by PFRDA

Explanation:

Keeping the EPF corpus together ensures that interest is earned on the entire amount, maximizing the growth through compounding over time.

Marks: 1

Q5 A house property is transferred to the daughter-in-law by father-in-law, and the same is let-out. The rent received is taxable in the hands of _______. (NISM workbook)

A. Son
B. Daughter-in-law
C. Mother-in-law
D. Father-in-law Correct Answer

Explanation:

Income from assets transferred to a son's wife without adequate consideration is clubbed with the transferor's income (father-in-law) as per Section 64(1)(vi).

Marks: 1

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