Issue Management – General Obligations of Merchant Bankers and Due Diligence
20 questions. Each answer is explained.
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Learn these topics
More units in NISM Series IX
- Introduction to Capital Market15
- Introduction to the Merchant Banking20
- Registration, Code of Conduct & General Obligations of Merchant Bankers in India20
- Issue Management – Important Terms15
- Issue Management – Process and Underwriting25
- Other Merchant Banking Activities-Mergers, Acquisitions & Takeovers20
- Other Merchant Banking Activities – Disinvestment, Buyback of Equity Shares15
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 |
| Marks for this unit | Not published by NISM |
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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.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.
All 20 questions on Issue Management – General Obligations of Merchant Bankers and Due Diligence, with answers
Q1What is the central purpose of due diligence in an issue-management assignment?
Option A. Replacing every disclosure with a sales forecast
Why it is wrong: Forecasts do not replace verification or material disclosures.
Option B. Selecting a guaranteed post-listing trading price
Why it is wrong: Due diligence does not determine a guaranteed market price.
Option C. Ensuring the investment cannot lose value
Why it is wrong: Due diligence cannot remove every investment risk.
Option D. Checking material information before relying on it — Correct answer
Answer: D. Due diligence checks material information so the issue process does not simply rely on unsupported claims. Remember: Due diligence is an evidence-based checking process, not a return guarantee.
Hint, shown before you answer in practice mode: Common mistake: Confusing careful verification with a promise that no future problem can arise. Think about testing claims against records and evidence.
IX-096easyconceptual
Q2Which description best matches a preferential issue of specified securities?
Option A. A subdivision of each existing share into smaller shares
Why it is wrong: A stock split changes denomination rather than allots securities to selected persons.
Option B. A routine purchase between two public-market investors
Why it is wrong: A secondary-market purchase is not a fresh preferential issue by the company.
Option C. A proportionate invitation to all existing holders
Why it is wrong: This describes the central feature of a rights issue rather than a preferential issue.
Option D. An issue to selected persons under the applicable framework — Correct answer
Answer: D. A preferential issue is an issue to selected persons under the applicable preferential-issue framework. Remember: A preferential issue is a targeted allotment route rather than a proportionate shareholder offer.
Hint, shown before you answer in practice mode: Common mistake: Assuming preferential means every existing shareholder receives the same entitlement. Contrast this route with proportionate entitlements for every existing shareholder.
IX-097easyconceptual
Q3A qualified institutions placement, or QIP, is principally a placement to which investor group?
Option A. Only the issuer’s permanent employees
Why it is wrong: An employee scheme is not the defining investor group for a QIP.
Option B. Qualified institutional buyers — Correct answer
Option C. Only all existing retail shareholders
Why it is wrong: A QIP is not a proportionate offer to all existing retail shareholders.
Option D. Only the issuer’s individual promoters
Why it is wrong: A QIP is not defined as a placement exclusively to individual promoters.
Answer: B. A QIP is a placement to qualified institutional buyers under its applicable regulatory framework. Remember: QIP is an institution-focused route rather than a general retail offer.
Hint, shown before you answer in practice mode: Common mistake: Treating any private allotment as a QIP regardless of investor eligibility. Recall the eligibility category rather than the size of an individual application.
IX-098easyconceptual
Q4Indian Depository Receipts, or IDRs, generally represent which underlying interest?
Option A. Equity shares of an Indian issuer deposited abroad
Why it is wrong: This reverses the issuer location and receipt market associated with the IDR structure.
Option B. A direct unsecured loan to the foreign issuer
Why it is wrong: The receipt represents an equity interest rather than a direct unsecured debt claim.
Option C. A term deposit held with an Indian commercial bank
Why it is wrong: An IDR is linked to underlying equity rather than an ordinary bank deposit.
Option D. Equity shares of a foreign company — Correct answer
Answer: D. IDRs represent an interest in the underlying equity shares of a foreign company through the depository-receipt structure. Remember: An IDR is a securities receipt linked to underlying foreign-company equity.
Hint, shown before you answer in practice mode: Common mistake: Mistaking a depository receipt for a bank deposit receipt. Distinguish an IDR from an ordinary deposit and from a receipt issued abroad.
IX-099easyconceptual
Q5What does renunciation of a renounceable rights entitlement allow a shareholder to do?
Option A. Convert the entitlement into a free bonus allotment
Why it is wrong: Renunciation does not remove the subscription price for the new shares.
Option B. Transfer the subscription entitlement to another person — Correct answer
Option C. Transfer the existing shares automatically with the entitlement
Why it is wrong: The entitlement can be dealt with separately from the old shares.
Option D. Require the issuer to redeem the existing shares
Why it is wrong: Renouncing an entitlement does not create a right to redemption of the old holding.
Answer: B. Renunciation allows the shareholder to transfer the entitlement to subscribe under a renounceable rights offer. Remember: The rights entitlement and the underlying existing share are different interests.
Hint, shown before you answer in practice mode: Common mistake: Assuming transferring the entitlement also sells the shareholder’s existing shares. Separate the right to apply for shares from the shares already owned.
IX-100easyconceptual
Q6Which evidence is strongest for checking whether a disclosed borrowing balance agrees with the lender’s records?
Option A. A borrowing figure copied from an older prospectus
Why it is wrong: A historical disclosure may be out of date and does not verify the current lender balance.
Option B. An unconfirmed internal spreadsheet of the same balance
Why it is wrong: Repeating the internal figure does not independently confirm the counterparty’s records.
Option C. A verbal estimate supplied by management
Why it is wrong: A verbal estimate is not independent confirmation of the lender’s records.
Option D. A confirmation obtained from the lender — Correct answer
Answer: D. A lender confirmation is strongest among these choices because it directly checks the balance against the counterparty’s records. Remember: External confirmations can strengthen checks on important balances.
Hint, shown before you answer in practice mode: Common mistake: Treating a management estimate as equivalent to independent evidence. Prefer evidence from the party that holds the matching financial claim.
IX-101easyapplication
Q7A major supplier is owned by the promoter’s close family. What should issue due diligence specifically examine?
Option A. The payment dates, assuming family ownership is irrelevant
Why it is wrong: Payment history alone does not establish whether the relationship or terms need disclosure.
Option B. The supplier’s scale, treating it as proof of independence
Why it is wrong: A large supplier can still be controlled by related persons.
Option C. The invoice arithmetic, without reviewing the ownership link
Why it is wrong: Correct arithmetic does not resolve the potentially material related-party relationship.
Option D. The related-party relationship and transaction terms — Correct answer
Answer: D. Due diligence should examine the related-party relationship and transaction terms because the ownership link may affect disclosure and evaluation. Remember: Important counterparty relationships can matter as much as the transaction amount.
Hint, shown before you answer in practice mode: Common mistake: Reviewing only the invoice amount while overlooking who controls the counterparty. Consider whether the transaction may be influenced by a relationship outside normal bargaining.
IX-102mediumapplication
Q8A company disputes a material tax claim that could create a payment obligation. Which due-diligence area most directly addresses it?
Option A. Contingent liabilities and litigation — Correct answer
Option B. The application-money blocking process
Why it is wrong: Application processing does not assess the merits or impact of the tax claim.
Option C. The pricing of the new share allotment
Why it is wrong: Issue pricing does not replace review of the disputed legal and financial obligation.
Option D. Routine equity share-capital reconciliation
Why it is wrong: Reconciling share quantities does not assess the disputed payment exposure.
Answer: A. The claim belongs in contingent-liability and litigation review because an uncertain outcome may create a material payment obligation. Remember: Disputed obligations still require careful assessment and relevant disclosure.
Hint, shown before you answer in practice mode: Common mistake: Ignoring a material claim solely because the company disputes it. Think about obligations whose final outcome remains uncertain.
IX-103mediumapplication
Q9The draft states that the issuer owns a key patent, but the agreement grants only a licence. What should due diligence correct?
Option A. Only the historical revenue earned from the product
Why it is wrong: Past revenue does not turn a licence into ownership of the intellectual property.
Option B. Only the licence fee’s payment schedule
Why it is wrong: Payment timing does not establish whether the issuer owns the patent or merely uses it.
Option C. Only the patent’s accounting carrying value
Why it is wrong: Accounting value alone cannot correct a false description of legal ownership.
Option D. The distinction between ownership and licensed use — Correct answer
Answer: D. The disclosure should distinguish ownership from licensed use because a licence does not by itself transfer ownership of the patent. Remember: Material asset claims must reflect the legal rights actually held.
Hint, shown before you answer in practice mode: Common mistake: Using owns and may use as though they mean the same thing. Read what rights the contract actually grants rather than relying on its informal description.
IX-104mediumapplication
Q10A proposed use-of-proceeds table says new factory, while supporting papers show debt repayment. What is the most important next step?
Option A. Leave both descriptions without explaining the conflict
Why it is wrong: An unexplained contradiction prevents a clear understanding of the issue’s purpose.
Option B. Remove all information about the use of funds
Why it is wrong: Deleting the information does not resolve the underlying inconsistency.
Option C. Retain whichever description attracts more bids
Why it is wrong: Marketing appeal does not determine the truthful use of funds.
Option D. Reconcile the intended use and correct the disclosures — Correct answer
Answer: D. The team should reconcile the intended use and correct the disclosures because conflicting descriptions may mislead investors about the issue’s purpose. Remember: Use-of-proceeds statements need to agree with supporting transaction evidence.
Hint, shown before you answer in practice mode: Common mistake: Treating different descriptions of the same money as a harmless drafting difference. Track where the money is actually intended to go.
IX-105mediumapplication
Q11Which document ordinarily sets out the offer terms and disclosures for a qualified institutions placement?
Option A. A public-issue red herring prospectus
Why it is wrong: A red herring prospectus belongs to the public-offer route rather than the QIP document asked for.
Option B. A placement document — Correct answer
Option C. A rights issue letter of offer
Why it is wrong: A rights letter of offer addresses the rights route rather than a qualified institutions placement.
Option D. A takeover open-offer letter of offer
Why it is wrong: A takeover offer document addresses share acquisition rather than the issuer’s QIP fundraising.
Answer: B. A placement document sets out the QIP’s offer terms and disclosures for the eligible institutional investors. Remember: Different offer routes use different transaction documents.
Hint, shown before you answer in practice mode: Common mistake: Using public-offer or takeover document names for a qualified institutions placement. Match the document with the fundraising route, not just the fact that shares are involved.
IX-106mediumconceptual
Q12A shareholder owns 1,250 shares. A rights issue offers two new shares for every five held. How many shares may the holder subscribe for?
Option A. 625 shares
Why it is wrong: This uses a one-for-two ratio rather than the stated two-for-five ratio.
Option B. 500 shares — Correct answer
Option C. 250 shares
Why it is wrong: This applies one new share for five held instead of two.
Option D. 3,125 shares
Why it is wrong: This reverses the entitlement ratio.
Answer: B. The entitlement is 500 new shares under the stated ratio. Groups of five = 1,250 ÷ 5 = 250. Entitlement = 250 × 2 = 500 shares. Remember: A rights ratio translates existing holdings into a new-share entitlement.
Hint, shown before you answer in practice mode: Common mistake: Reversing the number of new shares and the number of existing shares in the ratio. Apply the new-share entitlement to each complete group of existing shares.
IX-107mediumnumerical
Q13A shareholder sells 300 renounceable rights entitlements for ₹12 each. What gross amount is received for the entitlements?
Option A. ₹300
Why it is wrong: This treats the number of entitlements as the cash proceeds.
Option B. ₹36,000
Why it is wrong: This overstates the product of quantity and price by ten times.
Option C. ₹25
Why it is wrong: This divides the entitlement count by the price instead of multiplying.
Option D. ₹3,600 — Correct answer
Answer: D. The gross receipt is ₹3,600 from selling the entitlements. Proceeds = 300 × ₹12 = ₹3,600, ignoring charges and taxes. Remember: Selling an entitlement produces a separate cash flow from paying for new shares.
Hint, shown before you answer in practice mode: Common mistake: Confusing entitlement-sale proceeds with the underlying rights subscription amount. Value the entitlement transaction separately from any later subscription for shares.
IX-108mediumnumerical
Q14A preferential allotment valuation assumes a major customer contract will renew, but there is no supporting evidence. What should the adviser do?
Option A. Challenge and test the unsupported assumption — Correct answer
Option B. Remove every downside scenario from the analysis
Why it is wrong: Removing downside cases makes the assumption less transparent rather than better supported.
Option C. Accept it because a higher value benefits the issuer
Why it is wrong: A favourable result does not validate an unsupported assumption.
Option D. Treat the unsigned renewal as completed business
Why it is wrong: An unsigned renewal is not evidence that the contract has been secured.
Answer: A. The adviser should challenge and test the assumption because unsupported renewal expectations can distort the valuation. Remember: Material valuation assumptions should have evidence and appropriate sensitivity analysis.
Hint, shown before you answer in practice mode: Common mistake: Treating an optimistic management expectation as a verified commercial fact. Separate a possible future event from an established fact used in valuation.
IX-109mediumapplication
Q15Four IDRs represent one underlying share valued at an equivalent ₹960. Ignoring fees and market differences, what proportional value corresponds to one IDR?
Option A. ₹960
Why it is wrong: This assigns the entire underlying share value to each of four receipts.
Option B. ₹480
Why it is wrong: This incorrectly uses two receipts per share instead of four.
Option C. ₹3,840
Why it is wrong: This multiplies by the receipt ratio rather than dividing by it.
Option D. ₹240 — Correct answer
Answer: D. The proportional value is ₹240 per IDR under the stated representation ratio. Value per IDR = ₹960 ÷ 4 = ₹240. This is a mechanical equivalence, not a guaranteed market price. Remember: A receipt-to-share ratio matters when comparing depositary receipts with underlying equity.
Hint, shown before you answer in practice mode: Common mistake: Comparing one receipt with one share without adjusting for the representation ratio. Divide the value of the underlying interest among the receipts that represent it.
IX-110mediumnumerical
Q16The borrowing note excludes a guarantee the issuer gave for another company’s debt. What should the review establish?
Option A. Only whether the issuer directly received the loan proceeds
Why it is wrong: An issuer can face guarantee exposure even when another company receives the borrowing.
Option B. Only whether payment has already been demanded
Why it is wrong: A guarantee can be material before the lender demands payment.
Option C. Only whether management expects the borrower to default
Why it is wrong: Management’s expectation does not by itself determine the issuer’s contractual exposure.
Option D. Whether the guarantee creates a material exposure — Correct answer
Answer: D. The review should establish the issuer’s exposure under the guarantee because obligations can arise without direct borrowing. Remember: Due diligence must consider material guarantees as well as direct loans.
Hint, shown before you answer in practice mode: Common mistake: Assuming no debt exposure exists unless cash was borrowed directly by the issuer. Look beyond loans taken directly in the issuer’s own name.
IX-111mediumapplication
Q17Shares trade at ₹180 before a one-for-three rights issue priced at ₹120. What is the theoretical ex-rights price, ignoring other effects?
Option A. ₹160
Why it is wrong: This uses an incorrect weighting for the stated entitlement ratio.
Option B. ₹165 — Correct answer
Option C. ₹150
Why it is wrong: This gives equal weight to the old-share price and rights price despite their three-to-one quantities.
Option D. ₹180
Why it is wrong: This ignores the additional shares issued below the pre-rights price.
Answer: B. The theoretical ex-rights price is ₹165 under the stated assumptions. Value of three old shares = 3 × ₹180 = ₹540. Add one new share’s subscription of ₹120 to obtain ₹660. Divide by four shares to obtain ₹165. Remember: Theoretical ex-rights pricing weights old shares and new subscription money by their quantities.
Hint, shown before you answer in practice mode: Common mistake: Taking a simple average of the two prices without considering the rights ratio. Combine the value of the existing shares and the subscription cash, then use the enlarged share count.
IX-112hardnumerical
Q18Credit sales are ₹200 crore and cash sales ₹50 crore. Receivables rise from ₹40 crore to ₹90 crore. What total cash is collected from customers, including cash sales?
Option A. ₹200 crore — Correct answer
Option B. ₹250 crore
Why it is wrong: This ignores the ₹50 crore increase in unpaid receivables.
Option C. ₹300 crore
Why it is wrong: This adds the receivables increase instead of deducting it from sales.
Option D. ₹150 crore
Why it is wrong: This calculates credit-sale collections but omits the separate cash sales.
Answer: A. Customer cash collections are ₹200 crore when no write-offs, taxes, advances or other adjustments apply. Credit collections = ₹200 crore + ₹40 crore − ₹90 crore = ₹150 crore. Add cash sales of ₹50 crore to obtain ₹200 crore. Remember: Revenue and customer cash collections can differ because receivables change.
Hint, shown before you answer in practice mode: Common mistake: Assuming reported revenue equals cash received during the period. Not every recorded sale has become cash by the end of the period.
IX-113hardnumerical
Q19There are 80 lakh old shares, 20 lakh newly allotted shares and warrants for 10 lakh shares. What fully diluted stake does a holder of 22 lakh shares and no warrants have?
Option A. 22.00%
Why it is wrong: This excludes the shares that would arise from the stated warrant conversion.
Option B. 20.00% — Correct answer
Option C. 18.33%
Why it is wrong: This adds an extra 10 lakh shares not supported by the stated capital structure.
Option D. 27.50%
Why it is wrong: This uses only the old share count before the allotment.
Answer: B. The fully diluted stake is 20% assuming full warrant conversion and no other changes. Fully diluted shares = 80 lakh + 20 lakh + 10 lakh = 110 lakh. Ownership = 22 lakh ÷ 110 lakh × 100 = 20%. Remember: A fully diluted ownership review includes the specified potential equity conversion.
Hint, shown before you answer in practice mode: Common mistake: Ignoring convertible instruments when assessing post-transaction ownership. Count both issued shares and the shares assumed to arise from the specified conversion.
IX-114hardnumerical
Q20A major customer provides 45% of sales. Its contract expires next year and renewal is uncommitted. Management describes five years of revenue as secured. What should the review prioritise?
Option A. Accept the claim because last year’s sales were audited
Why it is wrong: Historical sales evidence does not prove five years of future contractual revenue.
Option B. Verify contract enforceability and correct the revenue claim — Correct answer
Option C. Replace the contract review with an industry growth chart
Why it is wrong: Industry growth data does not establish the enforceability of this specific contract.
Option D. Treat customer concentration as eliminated by the forecast
Why it is wrong: A forecast does not remove dependence on one major customer.
Answer: B. The review should verify the contract and correct the revenue claim because the existing evidence does not support five years of secured revenue. Remember: Claims of secured future business need support from the actual contractual terms.
Hint, shown before you answer in practice mode: Common mistake: Treating audited past revenue as proof that future revenue is legally assured. Separate historical performance and management forecasts from legally supported future rights.
IX-115hardapplication
Issue Management – General Obligations of Merchant Bankers and Due Diligence: common questions
How many practice questions are there on Issue Management – General Obligations of Merchant Bankers and Due Diligence?
20 questions, all written out on this page with the correct answer and why each other option is wrong. This unit is one of the 8 practice topics for NISM Series IX, which has 150 questions in total.
Are these real NISM Series IX questions on Issue Management – General Obligations of Merchant Bankers and Due Diligence?
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.
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.
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.
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