NISM Series 21B Mock Test 2: 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: 1 question.
• Introduction to Securities Markets and Participants: 1 question.
• Investing in Stocks and Equity Research: 3 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: 2 questions.
• Operational Aspects of Portfolio Managers (Onboarding and Fees): 3 questions.
• Portfolio Management Process and Asset Allocation: 2 questions.
• Taxation: 2 questions.
• Regulatory, Governance and Ethical Aspects of Portfolio Managers: 3 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: 4 questions.
• Performance measurement and evaluation of Portfolio Managers: 3 questions.
• Portfolio Rebalancing: 2 questions.

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

Chapter split of Mock 2

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

3 sample questions, with answers

These 3 questions are not in Mock 2, so reading them spoils nothing here. They come from Mock 1 of this exam. Each one shows the hint, the answer and why every wrong option is wrong.

1. Q1For a domestic sleeve, the equity desk buys 1,000 shares at ₹200 and matching puts with strike ₹190 for ₹5 per share. At expiry the share price is ₹160, and all positions are settled with no other costs. What is the combined result?

   • A

     Option A. ₹15,000 loss — Correct answer

   • B

     Option B. ₹40,000 loss

     Why it is wrong: This ignores the put’s ₹30 per-share payoff.

   • C

     Option C. ₹25,000 profit

     Why it is wrong: This counts the put result but ignores the loss on the shares.

   • D

     Option D. ₹10,000 loss

     Why it is wrong: This ignores the ₹5 per-share put premium.

   Answer: A. The combined result is a ₹15,000 loss because the put offsets part of the share-price fall. Share loss = (₹160 − ₹200) × 1,000 = −₹40,000. Put payoff = (₹190 − ₹160) × 1,000 = ₹30,000. Premium = ₹5 × 1,000 = ₹5,000. Total = −₹40,000 + ₹30,000 − ₹5,000 = −₹15,000. Remember: A protective put can limit a defined downside but its premium is a real cost.

   Hint, shown before you answer in practice mode: Combine the share result with the option result after its premium. Common mistake: Ignoring the premium when calculating the protected position’s result.

   XXI-B-119mediumapplication

   Study this unit

2. Q2A bond pays an annual coupon of ₹80 and trades at ₹800. What is its current yield?

   • A

     Option A. 12.50%

     Why it is wrong: This does not divide the stated annual coupon by the stated market price.

   • B

     Option B. 20.00%

     Why it is wrong: This is not the annual coupon income relative to the purchase price.

   • C

     Option C. 8.00%

     Why it is wrong: This could be a coupon rate on ₹1,000 face value, not the yield on the stated price.

   • D

     Option D. 10.00% — Correct answer

   Answer: D. Current yield is 10.00% because the ₹80 annual coupon is 10% of the ₹800 market price. Working: ₹80 ÷ ₹800 × 100 = 10%. Remember: Current yield uses market price and excludes the gain or loss at redemption.

   Hint, shown before you answer in practice mode: Current yield looks at annual income relative to today’s price. Common mistake: Using face value instead of the trading price.

   XXI-B-016mediumnumerical

   Study this unit

3. Q3A scheme has assets of ₹10.6 crore, liabilities of ₹0.6 crore and 50 lakh units. What is net asset value per unit?

   • A

     Option A. ₹21.20

     Why it is wrong: This divides gross assets by units without deducting liabilities.

   • B

     Option B. ₹200

     Why it is wrong: This loses a factor of ten when converting crore to lakh.

   • C

     Option C. ₹20 — Correct answer

   • D

     Option D. ₹22.40

     Why it is wrong: This adds liabilities to assets instead of deducting them.

   Answer: C. Net asset value is ₹20 per unit because net assets are ₹10 crore. Net assets = ₹10.6 crore − ₹0.6 crore = ₹10 crore. NAV = ₹10,00,00,000 ÷ 50,00,000 units = ₹20. Remember: NAV per unit is net assets divided by outstanding units.

   Hint, shown before you answer in practice mode: Only the net amount belongs to unit holders. Common mistake: Using gross assets or mixing crore and lakh units.

   XXI-B-029mediumnumerical

   Study this unit

Then take Mock 3

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