NISM Series 5D Mock Test 3: Free SIF Distributors Paper

How this mock is marked

• 50 questions, one mark each.
• 60 minutes on the clock. That is the real exam's pace: 180 minutes for 150 questions.
• A wrong answer loses one tenth 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.

• The Investment Landscape: 1 question.
• Concept & Role of a Mutual Fund: 2 questions.
• Legal Structure of Mutual Funds in India: 1 question.
• Legal and Regulatory Framework: 2 questions.
• Scheme Related Information: 2 questions.
• Fund Distribution and Channel Management Practices: 1 question.
• Net Asset Value, Total Expense Ratio and Pricing of Units: 2 questions.
• Taxation: 1 question.
• Investor Services: 4 questions.
• Risk, Return and Performance of Funds: 2 questions.
• Mutual Fund Scheme Performance: 1 question.
• Mutual Fund Scheme Selection: 3 questions.
• Basics of Derivatives: 4 questions.
• Understanding Index: 2 questions.
• Introduction to Forwards and Futures: 5 questions.
• Introduction to Options: 4 questions.
• Strategies Using Equity Futures and Equity Options: 3 questions.
• Introduction to Interest Rate, Interest Rate Instruments and Fixed Income Markets: 2 questions.
• Exchange Traded Interest Rate Futures: 4 questions.
• Exchange Traded Interest Rate Options: 2 questions.
• Strategies Using Interest Rate Derivatives: 2 questions.

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

Chapter split of Mock 3

How Mock 3 shares its questions between chapters and levels. This split belongs to this paper. The other mocks of this exam have their own.

• The Investment Landscape: Beginner 0 · Intermediate 1 · Advanced 0.
• Concept & Role of a Mutual Fund: Beginner 1 · Intermediate 1 · Advanced 0.
• Legal Structure of Mutual Funds in India: Beginner 1 · Intermediate 0 · Advanced 0.
• Legal and Regulatory Framework: Beginner 1 · Intermediate 1 · Advanced 0.
• Scheme Related Information: Beginner 1 · Intermediate 1 · Advanced 0.
• Fund Distribution and Channel Management Practices: Beginner 0 · Intermediate 1 · Advanced 0.
• Net Asset Value, Total Expense Ratio and Pricing of Units: Beginner 0 · Intermediate 1 · Advanced 1.
• Taxation: Beginner 0 · Intermediate 0 · Advanced 1.
• Investor Services: Beginner 1 · Intermediate 2 · Advanced 1.
• Risk, Return and Performance of Funds: Beginner 1 · Intermediate 1 · Advanced 0.
• Mutual Fund Scheme Performance: Beginner 0 · Intermediate 1 · Advanced 0.
• Mutual Fund Scheme Selection: Beginner 1 · Intermediate 1 · Advanced 1.
• Basics of Derivatives: Beginner 2 · Intermediate 1 · Advanced 1.
• Understanding Index: Beginner 0 · Intermediate 2 · Advanced 0.
• Introduction to Forwards and Futures: Beginner 2 · Intermediate 2 · Advanced 1.
• Introduction to Options: Beginner 1 · Intermediate 3 · Advanced 0.
• Strategies Using Equity Futures and Equity Options: Beginner 0 · Intermediate 1 · Advanced 2.
• Introduction to Interest Rate, Interest Rate Instruments and Fixed Income Markets: Beginner 1 · Intermediate 1 · Advanced 0.
• Exchange Traded Interest Rate Futures: Beginner 1 · Intermediate 2 · Advanced 1.
• Exchange Traded Interest Rate Options: Beginner 1 · Intermediate 1 · Advanced 0.
• Strategies Using Interest Rate Derivatives: Beginner 0 · Intermediate 1 · Advanced 1.

3 sample questions, with answers

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

1. Q1A trader builds three identical bull call spreads on the same hypothetical interest-rate futures contract and expiry. Each spread buys a 98-strike call for 2.50 points and sells a 102-strike call for 0.80 points. Each point is worth ₹2,000 per option contract. Ignoring costs and financing, what is the maximum total expiry profit? Assumptions: The two option legs share the same underlying, multiplier and expiry.

   • A

     Option A. ₹4,600

     Why it is wrong: This is the maximum profit on only one of the three spreads.

   • B

     Option B. ₹24,000

     Why it is wrong: This is the maximum gross spread payoff before deducting the net premiums.

   • C

     Option C. ₹13,800 — Correct answer

   • D

     Option D. ₹10,200

     Why it is wrong: This is the total net premium paid, not the maximum profit.

   Answer: C. The strike width is 102 − 98 = 4 points and net premium is 2.50 − 0.80 = 1.70 points. Maximum profit = (4 − 1.70) × ₹2,000 × 3 = ₹13,800. Remember: A debit spread’s maximum profit equals its capped payoff less the initial net debit.

   Hint, shown before you answer in practice mode: Subtract net premium from strike width, then multiply by point value and number of spreads.

   V-D-148hardnumerical

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2. Q2A trader sells three hypothetical futures contracts at ₹1,000 and buys them back at ₹980. Each contract represents 40 units. Ignoring costs, what is the profit? Assumptions: The contract multiplier is hypothetical. Transaction costs are ignored.

   • A

     Option A. ₹2,400 — Correct answer

   • B

     Option B. A loss of ₹2,400

     Why it is wrong: This reverses the payoff direction of a short position.

   • C

     Option C. ₹800

     Why it is wrong: This includes only one contract.

   • D

     Option D. ₹60

     Why it is wrong: This omits the 40-unit contract multiplier.

   Answer: A. Profit = (₹1,000 − ₹980) × 3 × 40 = ₹2,400. The short position benefits from the decline in the futures price. Remember: The short and long payoff signs are opposite.

   Hint, shown before you answer in practice mode: For a short position, subtract the closing buy price from the opening sell price.

   V-D-085easynumerical

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3. Q3A trader buys a hypothetical 40-unit call contract with strike ₹500 for ₹18 per unit. At expiry the underlying settles at ₹510. Ignoring fees, what is the net profit or loss on the option? Assumptions: The multiplier is hypothetical and all fees are ignored.

   • A

     Option A. A profit of ₹320.

     Why it is wrong: This reverses the sign after deducting the premium.

   • B

     Option B. A loss of ₹720.

     Why it is wrong: This assumes the call expires with no intrinsic value.

   • C

     Option C. A profit of ₹400.

     Why it is wrong: This reports exercise payoff but ignores the premium paid.

   • D

     Option D. A loss of ₹320. — Correct answer

   Answer: D. The expiry payoff is (₹510 − ₹500) × 40 = ₹400. Premium paid is ₹18 × 40 = ₹720, so the net result is ₹400 − ₹720 = −₹320. Remember: Distinguish moneyness from profitability after premium.

   Hint, shown before you answer in practice mode: Being in the money does not necessarily recover the premium.

   V-D-102mediumnumerical

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Practise the chapters you missed

Your result shows which chapters need more work. Open a chapter on the NISM Series V-D practice page. Check each answer and read why it is right.