These twelve are in the style of NISM Series V-D, four from each module. Attempt each before reading the answer.
Module 1 — Mutual Funds
1. Where a SIF may invest
Under Regulation 51, in which instruments may a Specialized Investment Fund invest?
Answer: the instruments permitted under Regulation 39 for mutual fund schemes, subject to the Sixth Schedule restrictions. A SIF is a mutual fund product; it does not get a wider universe, only more flexible strategies within it.
2. NAV arithmetic
Market value of a scheme's portfolio Rs 579 crore; dividend accrued but not received Rs 18 crore; expenses payable Rs 3 crore; 300 lakh units. NAV?
Answer: Rs 198. (579 + 18 − 3) ÷ 3 = 594 ÷ 3. Accrued income is an asset; payables are a liability.
3. SWP with an exit load
An SWP withdraws Rs 1,000 a month. NAV Rs 10, exit load 1%. Units redeemed in the first tranche?
Answer: 101.0101. The load cuts the investor's price to Rs 9.90, so 1,000 ÷ 9.90 units go out. Exit loads increase the units an SWP consumes.
4. Low-risk equity
An investor wants equity exposure with the lowest risk within equity. Which fund?
Answer: an index fund or a value fund. Growth funds take more risk for more return; small-cap and sector funds sit at the risky end of the hierarchy.
Module 2 — Equity Derivatives
5. What drives an option premium
The premium of an option is a function of ______.
Answer: all of the above — spot price, strike price, volatility, time to expiry and interest rates. Five parameters; the exam lists three and asks for "all".
6. Delta hedging
A trader has sold 8 lots of at-the-money calls (lot size 100), delta 0.50. How many lots of futures (delta 1) make the position delta-neutral?
Answer: 4 lots, bought. Short-call delta = −0.5 × 8 × 100 = −400; each long futures lot is +100; four lots bring it to zero. As the stock moves the call's delta changes and the hedge must be rebalanced.
7. Hedging a portfolio with index futures
Portfolio Rs 66 lakh, beta 1.2; Nifty futures at 22,000, lot 75. Contracts to sell?
Answer: 4. Contract value 22,000 × 75 = Rs 16.5 lakh; hedge = (66 lakh × 1.2) ÷ 16.5 lakh = 4.8, which rounds to the nearest whole contract the exam intends — check whether the question says "approximately" and round accordingly. The method — portfolio value times beta, divided by contract value — is what is tested.
8. Credit risk funds
What is the minimum investment in AA-and-below corporate bonds in a credit risk fund?
Answer: 65% of total assets. A category definition, and one that reappears in Module 1's scheme-selection chapter.
Module 3 — Interest Rate Derivatives
9. Long put on a government security
One lot (2,000 bonds) of a put with strike Rs 99.00 bought at a premium of Rs 0.25; the underlying settles at Rs 98.50. Net payoff?
Answer: profit of Rs 500. Exercise value 99.00 − 98.50 = 0.50 per bond; less the 0.25 premium = 0.25; × 2,000 = Rs 500. Breakeven was Rs 98.75.
10. Synthetic T-bill
An investor with three-month money buys a 15-year GOI bond and shorts three-month futures on it. What has he created?
Answer: a synthetic three-month risk-free security. The short futures lock in the price he will receive in three months, collapsing the effective maturity to three months. If its yield exceeds the cash-market T-bill yield, it is a yield-enhancement trade.
11. Which way to hedge rising rates
A fund holds a long bond portfolio and expects rates to rise. Interest rate futures — buy or sell?
Answer: sell. Rates up means bond prices down means futures down; a short position gains and offsets the cash loss.
12. Duration and a rate move
Modified duration 6; yields rise 50 basis points. Change in portfolio value?
Answer: a fall of about 3%. −6 × 0.5% = −3%. Duration is the number that sizes an interest rate hedge.
Scoring yourself
Score each module separately. Fewer than three right in a module means that module is your first week of work — and remember the modules are unequal: 68, 52 and 30 marks. A weak Module 3 costs less than a weak Module 2.
Practise the full bank free — 850+ V-D questions filed into 22 chapters — then sit a 150-question timed mock and read the module breakdown on the result page.