These twelve questions are drawn from the areas NISM Series V-A weights most heavily. Work through them before you look at the answers — the point is to find the gaps, not to collect facts.
1. Risk-return hierarchy
Which sequence moves from lowest to highest risk?
Answer: Liquid funds → Debt funds → Hybrid funds → Equity funds. Moving along that order, both potential return and investment risk increase. This one hierarchy underpins a large share of the Scheme Selection chapter.
2. Equity categories by risk
Which carries the highest risk: large cap, mid cap, or small cap?
Answer: small cap. Smaller companies are riskier than larger ones. The full order runs small cap, mid cap, multi cap, large and mid-cap, large cap — with risk decreasing left to right. Read the direction in the question carefully, because it is asked both ways.
3. Credit risk in debt funds
Rank gilt, corporate bond, banking and PSU, and credit risk funds from lowest credit risk to highest.
Answer: Gilt → Banking and PSU → Corporate bond → Credit risk fund. Gilt funds hold government securities and carry effectively no credit risk.
4. Applicable NAV — the two-condition rule
An application is time stamped at 2.15 p.m. on Tuesday but the funds only reach the scheme on Wednesday. Which day's NAV applies?
Answer: Wednesday's. Two conditions must both be met — the time stamp against the cut-off, and the funds being available to the scheme. This is the single most common trap in the paper: candidates remember the cut-off and forget the money.
5. Computing NAV
A scheme holds securities worth ₹812 crore with liabilities of ₹12 crore and has 4 crore units. What is the NAV?
Answer: ₹200. (812 − 12) ÷ 4. The mistake is forgetting the liabilities and answering ₹203.
6. SIP, SWP or STP
Which plan moves money between two schemes of the same fund house at set intervals?
Answer: STP. A SIP invests from the bank into a scheme; an SWP withdraws from a scheme to the bank; an STP moves between schemes. SIP goes in, SWP comes out, STP moves between.
7. Total Expense Ratio
Is the TER billed separately to the investor?
Answer: no. It is charged to the scheme and accrues daily, so the NAV you see is already net of it. Between two similar schemes, the cheaper one starts each year ahead by the difference.
8. Nomination
Does a nomination transfer any right during the investor's lifetime?
Answer: no. It identifies who receives the units on death. Transmission is the process by which they actually pass — distinct from a transfer during life, and from a switch, which merely moves money between schemes.
9. Grievance escalation
An investor's complaint is not resolved by the AMC. Where next?
Answer: SEBI's SCORES platform. The AMC first, then SCORES, where SEBI takes it up with the entity and tracks it to closure.
10. Scheme documents
Which document must legally accompany the application form?
Answer: the Key Information Memorandum (KIM). The SID describes the scheme in full and the SAI holds statutory information about the fund; both are available on request, but the KIM is what travels with the form.
11. Taxation
What determines whether a scheme is "equity-oriented" for tax?
Answer: the proportion of assets invested in equity shares of domestic companies — not the scheme's name or marketing category. That classification then drives the holding period and rates.
12. Real return
An investment returns 6% while inflation runs at 6%. What is the real return?
Answer: approximately nil. The rupee amount grew but purchasing power did not. Real return is nominal minus inflation.
How to use these
If you got fewer than eight right, you are not ready — and that is useful information three weeks out rather than on exam day.
The pattern to notice: almost none of these need calculation. They need you to know a rule precisely. That is why passive reading fails on this syllabus and answering questions works — you cannot tell the difference between recognising a rule and knowing it until you are asked.
ScoreSetu has 743 NISM V-A questions organised by the workbook's own chapters, each with an explanation and a memory hook. Practise free — no signup — then take a full-length timed mock scored to the real 50% pass mark.
Next: the chapter weightages, so you know which of these areas is worth the most.