NISM Series 9 Mock Test 1: Free Merchant Banking Paper

How this mock is marked

• 50 questions, one mark each.
• 60 minutes on the clock. That is the real exam's pace: 120 minutes for 100 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 8 chapters. Each chapter gets a share that follows our question bank.

• Introduction to Capital Market: 5 questions.
• Introduction to the Merchant Banking: 7 questions.
• Registration, Code of Conduct & General Obligations of Merchant Bankers in India: 7 questions.
• Issue Management – Important Terms: 5 questions.
• Issue Management – Process and Underwriting: 8 questions.
• Issue Management – General Obligations of Merchant Bankers and Due Diligence: 7 questions.
• Other Merchant Banking Activities-Mergers, Acquisitions & Takeovers: 6 questions.
• Other Merchant Banking Activities – Disinvestment, Buyback of Equity Shares: 5 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.

• Introduction to Capital Market: Beginner 1 · Intermediate 3 · Advanced 1.
• Introduction to the Merchant Banking: Beginner 2 · Intermediate 3 · Advanced 2.
• Registration, Code of Conduct & General Obligations of Merchant Bankers in India: Beginner 2 · Intermediate 4 · Advanced 1.
• Issue Management – Important Terms: Beginner 2 · Intermediate 3 · Advanced 0.
• Issue Management – Process and Underwriting: Beginner 2 · Intermediate 4 · Advanced 2.
• Issue Management – General Obligations of Merchant Bankers and Due Diligence: Beginner 3 · Intermediate 3 · Advanced 1.
• Other Merchant Banking Activities-Mergers, Acquisitions & Takeovers: Beginner 1 · Intermediate 3 · Advanced 2.
• Other Merchant Banking Activities – Disinvestment, Buyback of Equity Shares: Beginner 2 · Intermediate 2 · 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. Q1An ASBA application blocks ₹1,00,000. The investor receives 200 shares at ₹120 each. What amount should be released, ignoring charges?

   • A

     Option A. ₹80,000

     Why it is wrong: This uses ₹100 per allotted share rather than the stated ₹120 price.

   • B

     Option B. ₹24,000

     Why it is wrong: This is the amount used for the allotted shares rather than the amount released.

   • C

     Option C. ₹76,000 — Correct answer

   • D

     Option D. ₹1,00,000

     Why it is wrong: This ignores the payment required for the allotted shares.

   Answer: C. ₹76,000 is released. Only ₹24,000 is needed to pay for the shares. Allotment debit = 200 × ₹120 = ₹24,000. Release = ₹1,00,000 − ₹24,000 = ₹76,000. Remember: Only the cost of the shares you get stays debited from the blocked amount.

   Hint, shown before you answer in practice mode: Common mistake: Mixing up the amount taken for the shares with the amount set free. Keep the cost of the shares apart from the extra that was blocked.

   IX-080mediumnumerical

   Study this unit

2. Q2A holder sells 700 shares at ₹180 under a completed delisting exit. Their cost was ₹120 each and the assumed fee is 0.5% of proceeds. What pre-tax gain results?

   • A

     Option A. ₹1,25,370

     Why it is wrong: This deducts the fee but fails to deduct the acquisition cost of the shares sold.

   • B

     Option B. ₹42,000

     Why it is wrong: This calculates the price gain but omits the stated transaction fee.

   • C

     Option C. ₹41,580

     Why it is wrong: This incorrectly charges the fee on acquisition cost instead of sale proceeds.

   • D

     Option D. ₹41,370 — Correct answer

   Answer: D. The pre-tax gain is ₹41,370 after the stated fee. Gross proceeds = 700 × ₹180 = ₹1,26,000. Cost = 700 × ₹120 = ₹84,000. Hypothetical fee = 0.5% × ₹1,26,000 = ₹630. Gain = ₹1,26,000 − ₹84,000 − ₹630 = ₹41,370. The fee is a case assumption, not a statutory rate. Remember: Exit proceeds are not the same as realised gain after acquisition cost and transaction charges.

   Hint, shown before you answer in practice mode: Common mistake: Treating the full exit receipt as profit or applying the fee to the wrong base. Deduct both the cost of the shares sold and the fee calculated on the specified base.

   IX-150hardnumerical

   Study this unit

3. Q3A shareholder sells 300 renounceable rights entitlements for ₹12 each. What gross amount is received for the entitlements?

   • A

     Option A. ₹300

     Why it is wrong: This treats the number of entitlements as the cash proceeds.

   • B

     Option B. ₹36,000

     Why it is wrong: This overstates the product of quantity and price by ten times.

   • C

     Option C. ₹25

     Why it is wrong: This divides the entitlement count by the price instead of multiplying.

   • D

     Option D. ₹3,600 — Correct answer

   Answer: D. The holder gets ₹3,600 from selling the rights. Proceeds = 300 × ₹12 = ₹3,600, leaving out charges and taxes. Remember: Selling a right brings in cash that is separate from paying for new shares.

   Hint, shown before you answer in practice mode: Common mistake: Mixing up the money from selling the rights with the money paid to buy the new shares. Value the sale of the right apart from any later purchase of shares.

   IX-108mediumnumerical

   Study this unit

Then take Mock 2

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