Series IX
Merchant Banking
50 questionsPass mark 60%Negative marking 25% / wrong answer
NISM Series IX practice questions
150 questions. Each answer is explained.
Question 1 of 10Practice · Series IX — Merchant Banking
0 right · 0 wrong · 10 to go
A–D or 1–4 to answer · Enter or → for the next question · ← to go back
Learn these topics
Practise one unit at a time
- Introduction to Capital Market15 questions
- Introduction to the Merchant Banking20 questions
- Registration, Code of Conduct & General Obligations of Merchant Bankers in India20 questions
- Issue Management – Important Terms15 questions
- Issue Management – Process and Underwriting25 questions
- Issue Management – General Obligations of Merchant Bankers and Due Diligence20 questions
- Other Merchant Banking Activities-Mergers, Acquisitions & Takeovers20 questions
- Other Merchant Banking Activities – Disinvestment, Buyback of Equity Shares15 questions
Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 60% · 60 of 100 marks |
| Negative marking | 25% · 0.25 marks off per wrong answer |
| Certificate validity | 3 years · from the date of the examination |
NISM Series IX Merchant Banking
Exam rules read on NISM's site on 17 October 2026. Check the current rules on NISM's site (opens in a new tab)
What these answers assume, and when it was last checked
Each question uses the rules listed below. We last checked them on 5 September 2026. A Budget or SEBI circular can change a rate, lot size or expiry day. If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.
- NSE uses Tuesday expiry and BSE uses Thursday expiry. This applies from 1 September 2025.
- The January 2026 index lot sizes are NIFTY 65, BANKNIFTY 30, FINNIFTY 60, MIDCPNIFTY 120 and NIFTYNXT50 25.
- The October 2024 SEBI framework sets a minimum index contract value of Rs 15–20 lakh. Each exchange may list one weekly benchmark index.
- Option buyers pay the premium upfront from 1 February 2025. A short index option has an extra 2% Extreme Loss Margin on expiry day from 20 November 2024.
- Equity short-term capital gains are taxed at 20%. Long-term gains are taxed at 12.5% above Rs 1.25 lakh. Both rates apply from 23 July 2024.
- F&O income is non-speculative business income in ITR-3. NSE equity derivatives trade from 9:15 a.m. to 3:40 p.m.
- The final ten-minute session began on 3 August 2026. It aligns with the cash market Closing Auction Session.
- Most Securities Transaction Tax questions test the base and who pays. On an option sale, it is the premium and the seller pays. On a futures sale, it is the traded value and the seller pays.
- On exercise, Securities Transaction Tax uses intrinsic value: settlement price minus strike price. The buyer pays it.
- Two questions test the current rate. From 1 April 2026, option sales carry 0.15% on the premium and futures sales carry 0.05% on traded price. The earlier rates were 0.10% and 0.02% from 1 October 2024.
- This section uses the T+1 rolling settlement cycle. Obligations are fixed on T+1. A short delivery goes to buy-in auction on T+1 and settles on T+2.
- The trade-for-trade surveillance segment uses direct close-out. Funds pay in by 10:30 a.m. and pay out on or after 1:30 p.m. on settlement day.
- Securities pay in to the settlement pool by 10:30 a.m. They pay out directly to the client’s demat account by 3:30 p.m.
- The 3:30 p.m. deadline replaced 1:30 p.m. under SEBI’s 10 October 2024 circular. Direct client credit was required by SEBI’s 5 June 2024 circular.
- The optional T+0 cycle trades until 1:30 p.m. Obligations are fixed by 2:30 p.m. on the trade day. An early pay-in shortage is closed out directly.
- Cash-market Value at Risk margin is six times exponentially weighted moving-average volatility. It has a 9% floor for Group I, a 21.5% floor for Group II, and a fixed 50% or 75% level for Group III.
- Extreme Loss Margin is 3.5% for a share and 2% for a broad-market-index exchange traded fund. Mark-to-market margin is collected before the next day’s trading. The trade-for-trade segment has 100% upfront margin.
- Close-out uses the higher of the highest price from trade day to auction day and 20% above the auction day’s official close.
- A funds shortage costs 0.07% a day. The trading facility is withdrawn at a shortage of Rs 5 lakh or more.
- SCORES allows 21 calendar days, then two 15-day review levels. Online Dispute Resolution moves from conciliation to arbitration after the market participant and SCORES steps.
- At NSE, the Investor Protection Fund limit is Rs 35 lakh per investor for each defaulting or expelled member. This applies to claims arising after 13 August 2024.
- A Basic Services Demat Account has no annual maintenance charge up to Rs 4 lakh of holdings. It costs up to Rs 100 above that, until the Rs 10 lakh eligibility ceiling. These slabs apply from 1 September 2024.
- The rupee pairs are USD-INR, EUR-INR, GBP-INR and JPY-INR. The cross-currency pairs are EUR-USD, GBP-USD and USD-JPY.
- Each contract covers 1,000 units of the foreign currency, except JPY-INR. JPY-INR covers 100,000 yen and is quoted in rupees per 100 yen.
- The tick is 0.25 paise, or Rs 0.0025. It equals Rs 2.50 a contract.
- Rupee pairs trade from 9:00 a.m. to 5:00 p.m. A monthly contract stops trading at 12:30 p.m. two working days before the expiry month’s last business day.
- Final settlement is in cash at the FBIL reference rate on expiry day. FBIL, Financial Benchmarks India, has published this rate in place of the Reserve Bank since 2018. Premium-style European options are quoted in rupees. The buyer pays the premium in cash on T+1.
- Daily settlement is on T+1 and final settlement is on T+2.
- NSE Clearing circular 026/2020 sets SPAN margin plus Extreme Loss Margin. The futures margin is 0.50% for USD-INR, 0.15% for EUR-INR, 0.25% for GBP-INR and 0.35% for JPY-INR. A short option has 0.75%. These figures apply from 1 June 2020.
- A USD-INR client may hold 6% of total open interest or USD 20 million, whichever is higher. A trading member may hold 15% or USD 100 million.
- A resident user has one USD 100 million equivalent limit across all rupee pairs and exchanges. No document is needed below that limit, but a valid underlying contracted exposure must still exist. This clarification applies from 3 May 2024.
- The currency segment has no Securities Transaction Tax.
The exam figures (questions, time, pass mark, negative marking and certificate validity) come from NISM's own pages, read on 17 October 2026. Timed practice uses the same figures. Study with the official workbook as well.
The written-out answers on this page are hidden while your timed set runs.
5 sample questions with answers
The other 145 are on the unit pages above, written out the same way.
Q1A ₹1,000 face-value bond pays an annual coupon of 8%. What is its annual coupon payment?
Option A. ₹100
Why it is wrong: This applies a 10% coupon instead of the stated 8%.
Option B. ₹80 — Correct answer
Option C. ₹8
Why it is wrong: This treats 8% as 0.8% of face value.
Option D. ₹800
Why it is wrong: This applies an 80% coupon instead of 8%.
Answer: B. The annual coupon is ₹80 because the rate applies to face value. Annual coupon = ₹1,000 × 8 ÷ 100 = ₹80. Remember: Coupon payments use face value rather than market price.
Hint, shown before you answer in practice mode: Common mistake: Applying the percentage with the wrong decimal position. The coupon rate applies to the bond’s face value.
IX-008mediumnumerical
Q2An investor’s offer provides a higher valuation but stronger control rights. What should the issuer’s adviser compare?
Option A. Economic terms and governance rights — Correct answer
Option B. The immediate transaction fees alone
Why it is wrong: Fees alone do not evaluate the financing proposal’s valuation and control trade-offs.
Option C. The quoted valuation alone
Why it is wrong: The attached control rights can materially affect the proposal even when the valuation is higher.
Option D. The proposed governance rights alone
Why it is wrong: Governance rights matter, but the economic terms must also be compared.
Answer: A. The adviser should compare both economic terms and governance rights because either can materially affect existing owners. Remember: A financing proposal cannot be assessed from valuation alone.
Hint, shown before you answer in practice mode: Common mistake: Choosing the highest headline valuation without reviewing attached rights. Consider what each party receives beyond a quoted valuation.
IX-026mediumapplication
Q3Which feature most directly distinguishes book building from a fixed-price public issue?
Option A. Investor bids help discover the issue price — Correct answer
Option B. Every applicant receives the same number of shares
Why it is wrong: Book building does not guarantee equal allotment quantities.
Option C. Investors trade only after the issue closes
Why it is wrong: Post-issue trading does not define the distinction between the pricing routes.
Option D. The issuer has no disclosure obligations
Why it is wrong: Both routes have applicable disclosure obligations.
Answer: A. Book building uses investor bids to help discover the issue price rather than announcing a single fixed issue price at the outset. Remember: Book building and fixed-price issues differ principally in price discovery.
Hint, shown before you answer in practice mode: Common mistake: Confusing the method of pricing with the later allotment outcome. Focus on how the offer price is determined.
IX-063mediumconceptual
Q4An issuer argues that a ₹10 face value proves its proposed ₹300 offer price is fair. What is the main analytical problem?
Option A. Face value does not establish economic valuation — Correct answer
Option B. Face value automatically equals current market value
Why it is wrong: Face value and market value are different concepts.
Option C. Investor demand makes disclosures unnecessary
Why it is wrong: Demand does not remove the need for information supporting an informed assessment.
Option D. Every offer price must equal face value
Why it is wrong: An issue can be priced differently from its face value.
Answer: A. Face value does not establish economic valuation because offer pricing requires consideration of relevant business and valuation information. Remember: A share’s face value is not evidence that a proposed offer price is fair.
Hint, shown before you answer in practice mode: Common mistake: Using face value as the sole benchmark for evaluating issue pricing. Distinguish an accounting denomination from an assessment of business value.
IX-083mediumapplication
Q5A group starts the financial year at 30% and acquires exactly 5% more. There is no control change or other trigger. Does Regulation 3(2) alone require an open offer?
Option A. Yes, any purchase by a 30% holder triggers it
Why it is wrong: Regulation 3(2) does not make every additional purchase an open-offer trigger.
Option B. No, because the threshold is always 10% per year
Why it is wrong: The stated general annual threshold is not 10%.
Option C. No, it requires acquisition of more than 5% — Correct answer
Option D. Yes, exactly 5% is more than the permitted amount
Why it is wrong: The wording is more than 5%, not 5% or more.
Answer: C. No, exactly 5% does not trigger Regulation 3(2) alone because that provision uses more than 5%, assuming the group remains below the maximum permissible non-public shareholding. Remember: The strict greater-than wording matters when testing the annual acquisition threshold.
Hint, shown before you answer in practice mode: Common mistake: Reading more than 5% as 5% or more. Pay close attention to the difference between more than and at least.
IX-126mediumapplication
NISM Series IX practice: common questions
Are these the real NISM Series IX exam questions?
No. LearnNifty wrote every question from NISM's public syllabus. NISM does not publish its question bank, so nobody can offer you the real paper. Use these questions to check that an idea has gone in. Use the official NISM workbook to see what is examined.
How many practice questions are there for NISM Series IX?
150 at the moment, across 8 practice topics, with one page per unit. It is a practice set, not a copy of the paper: the real NISM-Series-IX: Merchant Banking Certification Examination has 100 questions.
Where are all the questions and answers?
On the 8 practice topics listed above. There are 5 in full. Each unit's page has the rest, with all four options, the correct answer and why each other option is wrong.
Does negative marking apply to NISM Series IX?
Yes. NISM takes off 25% of a question's marks for a wrong answer. On a 1-mark question that is 0.25 marks off. A blank question earns nothing and loses nothing, so a wrong guess costs marks on this paper. Timed practice here uses the same rule.
How do I book the NISM Series IX exam?
You register and pay on NISM's own website, nism.ac.in. The steps and the fee change from time to time, so read them there on the day you book.
Are these practice questions kept up to date?
Each question is written against the rules printed on this page, last checked on 5 September 2026. A Budget or a SEBI circular can change a rate, a lot size or an expiry day. If one of those rules changes before your exam, treat the questions that use it as out of date. Then check NISM's current workbook.
See the exam these questions follow
The Merchant Banking exam page shows the question count, the time, the pass mark and the marking rule.
Open the NISM Series IX exam pagePaper Trading Try it on the practice trading desk