NISM Series 21B Mock Test 1: Free Portfolio Managers Paper

How this mock is marked

• 50 questions, one mark each.
• The real exam gives 2 marks to each of its 30 case-study questions. In these mocks every question is worth one mark.
• 75 minutes on the clock. That is the real exam's pace: 180 minutes for 120 questions.
• A wrong answer loses a quarter of a mark. A blank loses nothing.
• You pass with 60% or more.
• Submit to see your score and the chapters to work on. Then check each right answer and why it is right.

What this paper covers

50 questions from 21 chapters. Each chapter gets a share that follows our question bank.

• Investment Landscape and Required Return: 2 questions.
• Introduction to Securities Markets and Participants: 1 question.
• Investing in Stocks and Equity Research: 2 questions.
• Investing in Fixed Income Securities and Bond Valuation: 2 questions.
• Derivatives in Portfolio Management: 2 questions.
• Mutual Fund: 2 questions.
• Role of Portfolio Managers in India: 3 questions.
• Operational Aspects of Portfolio Managers (Onboarding and Fees): 2 questions.
• Portfolio Management Process and Asset Allocation: 3 questions.
• Taxation: 2 questions.
• Regulatory, Governance and Ethical Aspects of Portfolio Managers: 2 questions.
• Introduction to Indices: 2 questions.
• Concept of Informational Efficiency: 2 questions.
• Behavioral Finance: 2 questions.
• Introduction to Modern Portfolio Theory: 2 questions.
• Introduction to Capital Market Theory: 2 questions.
• Risk: 3 questions.
• Equity Portfolio Management Strategies: 5 questions.
• Fixed Income Portfolio Management Strategies: 5 questions.
• Performance measurement and evaluation of Portfolio Managers: 2 questions.
• Portfolio Rebalancing: 2 questions.

By level: Beginner 15 · Intermediate 25 · Advanced 10.

Chapter split of Mock 1

How Mock 1 shares its questions between chapters and levels. This split belongs to this paper. The other mocks of this exam have their own.

• Investment Landscape and Required Return: Beginner 1 · Intermediate 1 · Advanced 0.
• Introduction to Securities Markets and Participants: Beginner 1 · Intermediate 0 · Advanced 0.
• Investing in Stocks and Equity Research: Beginner 1 · Intermediate 1 · Advanced 0.
• Investing in Fixed Income Securities and Bond Valuation: Beginner 1 · Intermediate 1 · Advanced 0.
• Derivatives in Portfolio Management: Beginner 0 · Intermediate 1 · Advanced 1.
• Mutual Fund: Beginner 1 · Intermediate 1 · Advanced 0.
• Role of Portfolio Managers in India: Beginner 1 · Intermediate 1 · Advanced 1.
• Operational Aspects of Portfolio Managers (Onboarding and Fees): Beginner 0 · Intermediate 2 · Advanced 0.
• Portfolio Management Process and Asset Allocation: Beginner 1 · Intermediate 1 · Advanced 1.
• Taxation: Beginner 1 · Intermediate 1 · Advanced 0.
• Regulatory, Governance and Ethical Aspects of Portfolio Managers: Beginner 0 · Intermediate 1 · Advanced 1.
• Introduction to Indices: Beginner 0 · Intermediate 1 · Advanced 1.
• Concept of Informational Efficiency: Beginner 0 · Intermediate 2 · Advanced 0.
• Behavioral Finance: Beginner 1 · Intermediate 1 · Advanced 0.
• Introduction to Modern Portfolio Theory: Beginner 0 · Intermediate 1 · Advanced 1.
• Introduction to Capital Market Theory: Beginner 0 · Intermediate 1 · Advanced 1.
• Risk: Beginner 1 · Intermediate 2 · Advanced 0.
• Equity Portfolio Management Strategies: Beginner 2 · Intermediate 2 · Advanced 1.
• Fixed Income Portfolio Management Strategies: Beginner 2 · Intermediate 2 · Advanced 1.
• Performance measurement and evaluation of Portfolio Managers: Beginner 0 · Intermediate 2 · Advanced 0.
• Portfolio Rebalancing: Beginner 1 · Intermediate 0 · Advanced 1.

3 sample questions, with answers

These 3 questions are not in Mock 1, so reading them spoils nothing here. They come from Mock 3 of this exam. Each one shows the hint, the answer and why every wrong option is wrong.

1. Q1The same hypothetical account opens at ₹100 lakh and ends at ₹115 lakh before fees, without cash flows. Deduct the agreed ₹1 lakh fixed fee and ₹0.60 lakh performance fee, with no other charges or taxes. What is the client’s net return?

   • A

     Option A. 13.40% — Correct answer

   • B

     Option B. 14.40%

     Why it is wrong: This deducts only the performance fee and ignores the fixed fee.

   • C

     Option C. 14.00%

     Why it is wrong: This deducts only the fixed fee and ignores the performance fee.

   • D

     Option D. 15.00%

     Why it is wrong: This is the return before the two stated fees.

   Answer: A. The client’s net return is 13.40% because closing wealth after fees is ₹113.40 lakh. Closing wealth = ₹115 − ₹1 − ₹0.60 = ₹113.40 lakh. Net gain = ₹13.40 lakh. Return = ₹13.40 lakh ÷ ₹100 lakh × 100 = 13.40%. Remember: Client return is measured after the fees and costs specified in the calculation.

   Hint, shown before you answer in practice mode: Calculate the amount remaining for the client before measuring the return. Common mistake: Describing a gross portfolio gain as the client’s net result.

   XXI-B-047hardapplication

   Study this unit

2. Q2The client’s retirement portfolio is ₹80 lakh. Its written policy caps each sector at 20% of that pool, but one sector holds ₹18 lakh. By how much does that holding exceed the policy cap?

   • A

     Option A. ₹16 lakh

     Why it is wrong: This is the maximum permitted holding, not the excess.

   • B

     Option B. ₹2 lakh — Correct answer

   • C

     Option C. ₹0 lakh

     Why it is wrong: The ₹18 lakh holding exceeds the ₹16 lakh permitted amount.

   • D

     Option D. ₹4 lakh

     Why it is wrong: This does not compare the holding with 20% of the stated ₹80 lakh pool.

   Answer: B. The holding exceeds the cap by ₹2 lakh because the policy permits only ₹16 lakh. Maximum = 20% × ₹80 lakh = ₹16 lakh. Excess = ₹18 lakh − ₹16 lakh = ₹2 lakh. This is a hypothetical client-policy cap, not a statutory limit. Remember: Policy limits should be checked against the correct portfolio value.

   Hint, shown before you answer in practice mode: Calculate the monetary cap before comparing the actual holding. Common mistake: Reporting the permitted amount when the question asks for the breach amount.

   XXI-B-054mediumapplication

   Study this unit

3. Q3A stress test applies a 20% equity fall and a 5% bond fall to a ₹2 crore portfolio weighted 60% equity and 40% bonds. The portfolio is not rebalanced during the shock and cash flows are zero. What is the modelled loss?

   • A

     Option A. ₹25 lakh

     Why it is wrong: This uses equal asset weights rather than the stated 60% and 40% mix.

   • B

     Option B. ₹40 lakh

     Why it is wrong: This applies the equity shock to the entire portfolio.

   • C

     Option C. ₹28 lakh — Correct answer

   • D

     Option D. ₹14 lakh

     Why it is wrong: This treats the 14% portfolio loss as ₹14 lakh instead of applying it to ₹200 lakh.

   Answer: C. The modelled loss is ₹28 lakh because the weighted portfolio decline is 14%. Equity contribution = 60% × 20% = 12%. Bond contribution = 40% × 5% = 2%. Total decline = 14%. Monetary loss = ₹200 lakh × 14% = ₹28 lakh. Remember: Stress testing evaluates specified shocks and can reveal losses beyond a value-at-risk threshold.

   Hint, shown before you answer in practice mode: Calculate each asset class’s contribution to the total portfolio shock. Common mistake: Applying the largest asset-class shock to the entire mixed portfolio.

   XXI-B-108hardapplication

   Study this unit

Then take Mock 2

Read the chapters your result names first. A new paper then shows whether those gaps have closed.