✅ NISM Research Analyst Mock Test – Chapter 3 Securities Market Structure & Products (30 Most Expected Questions)

-


Q1. Which of the following is not a function of the primary market?

A. Mobilizing savings
B. Facilitating trading of existing securities
C. Price discovery for new issues
D. Allocation of capital


Answer: B
Explanation: The primary market handles issuance of new securities (mobilizing savings, price discovery, capital allocation). Trading of existing securities is a function of the secondary market.

Q2. The secondary market deals with:

A. New issue of securities
B. Trading of existing securities
C. Government securities only
D. Corporate bonds only


Answer: B
Explanation: The secondary market (stock exchanges) provides a platform for buying and selling already-issued securities.

Q3. Which market ensures liquidity of investments?

A. Primary market
B. Money market
C. Secondary market
D. Foreign exchange market


Answer: C
Explanation: The secondary market enables quick buying/selling of securities, providing liquidity to investors.

Q4. An IPO is issued through:

A. Secondary market
B. Primary market
C. Commodity market
D. Forex market


Answer: B
Explanation: An Initial Public Offering (IPO) is a new issue of shares sold to the public in the primary market.

Q5. The minimum post-issue capital that must be offered to the public in an IPO is:

A. 10%
B. 15%
C. 20%
D. 25%


Answer: D

Explanation: Regulations require a minimum percentage of a company’s post-issue capital to be held by the public—commonly 25%—to ensure adequate public float (subject to regulatory specifics).

Q6. A company’s existing shareholders get the right to subscribe to new shares in:

A. IPO
B. Rights issue
C. FPO
D. QIP


Answer: B
Explanation: A rights issue offers additional shares to existing shareholders proportionally before offering to the public.

Q7. The minimum trading lot in equity shares is called:

A. Market lot
B. Delivery lot
C. Settlement lot
D. Limit lot


Answer: A
Explanation: Market lot (or lot size) is the minimum quantity of shares that can be traded in a single transaction on the exchange.

Q8. Which market instrument has a maturity of less than 1 year?

A. Corporate bond
B. Treasury bill
C. G-sec
D. Preference share


Answer: B
Explanation: Treasury bills (T-bills) are short-term government instruments with maturities typically under one year.

Q9. Commercial papers are issued by:

A. RBI
B. Central Government
C. Corporates for short-term funds
D. Mutual funds


Answer: C
Explanation: Commercial Paper (CP) is an unsecured short-term instrument issued by corporates to meet short-term liabilities.

Q10. The safest debt instrument is:

A. Debentures
B. Treasury bills
C. Commercial papers
D. Company fixed deposits


Answer: B
Explanation: T-bills are government short-term securities backed by the sovereign and are considered very low risk.

Q11. Which of the following is a hybrid instrument?

A. Equity share
B. Preference share
C. Debenture
D. Treasury bill


Answer: B
Explanation: Preference shares have features of both equity (ownership) and debt (fixed dividend), making them a hybrid instrument.

Q12. Preference shareholders receive:

A. Voting rights
B. Fixed dividends
C. Guaranteed returns
D. No dividends


Answer: B
Explanation: Preference shareholders typically receive fixed dividends before any dividend is paid to ordinary shareholders (but usually have limited voting rights).

Q13. A mutual fund NAV is calculated:

A. Weekly
B. Monthly
C. Daily
D. Quarterly


Answer: C
Explanation: Net Asset Value (NAV) of open-ended mutual funds is computed daily after market close based on closing prices of portfolio securities.

Q14. ETFs are traded on:

A. Primary market
B. Secondary market
C. Money market
D. Capital market only


Answer: B
Explanation: Exchange-Traded Funds (ETFs) are bought and sold on stock exchanges in the secondary market throughout trading hours.

Q15. A closed-ended mutual fund is listed on:

A. NSE & BSE
B. Primary market only
C. RBI
D. Only at AMC office


Answer: A
Explanation: Closed-ended funds are issued through an IPO and are listed on exchanges (NSE/BSE), where units trade among investors.

Q16. Face value of a T-bill is paid:

A. At purchase
B. On maturity
C. Never
D. Through AMC


Answer: B
Explanation: T-bills are issued at a discount and the face value (full amount) is paid to the investor on maturity.

Q17. Which instrument always trades at a discount?

A. Corporate bond
B. Treasury bill
C. Debenture
D. Preference share


Answer: B
Explanation: Treasury bills are discount instruments sold below face value and redeemed at face value at maturity.

Q18. The market where long-term securities are issued is called:

A. Capital market
B. Money market
C. Forex market
D. Commodity market


Answer: A
Explanation: The capital market deals with long-term securities (equity, long-term debt), while the money market handles short-term instruments.

Q19. Which is a money market instrument?

A. CP
B. NCD
C. FPO
D. QIP


Answer: A
Explanation: Commercial Paper (CP) is a short-term money market instrument; NCDs are typically longer-term and belong to the capital market.

Q20. An FPO is issued for:

A. New investors
B. Existing shareholders
C. Raising additional capital after IPO
D. Debenture holders


Answer: C
Explanation: A Follow-on Public Offer (FPO) is used by a listed company to raise additional capital from the public after its IPO.

Q21. NCDs with maturity greater than 1 year are part of:

A. Money market
B. Capital market
C. Forex market
D. Primary market only


Answer: B
Explanation: Non-Convertible Debentures (NCDs) with maturities over one year are long-term debt instruments and are part of the capital market.

Q22. Derivatives derive their value from:

A. Underlying assets
B. NAV
C. AMC
D. IPO price


Answer: A
Explanation: Derivatives (futures, options, swaps) get their value from an underlying asset such as an equity, index, commodity, or currency.

Q23. Which is NOT a derivative product?

A. Futures
B. Options
C. Swaps
D. G-secs


Answer: D
Explanation: Government securities (G-secs) are debt instruments, not derivatives; futures, options, and swaps are derivative contracts.

Q24. Call option gives:

A. Right to buy
B. Right to sell
C. Obligation to buy
D. Obligation to sell


Answer: A
Explanation: A call option grants the buyer the right (not obligation) to buy the underlying asset at a specified price.

Q25. Put option gives:

A. Right to buy
B. Right to sell
C. No rights
D. Guaranteed profit


Answer: B
Explanation: A put option gives the buyer the right (not obligation) to sell the underlying asset at the strike price.

Q26. Market capitalization is:

A. Share capital × debt
B. Share price × total outstanding shares
C. Dividend × EPS
D. Profit × face value


Answer: B
Explanation: Market cap = Current market price per share × Number of outstanding shares; it indicates company size.

Q27. Beta measures:

A. Return volatility
B. Market value
C. Liquidity
D. Promoter holding


Answer: A
Explanation: Beta measures a stock’s volatility (systematic risk) relative to the overall market (beta >1 = more volatile).

Q28. Which asset class has the highest risk?

A. Equity
B. Debt
C. Gold
D. Liquid fund


Answer: A
Explanation: Equity is generally considered higher risk (higher return potential and volatility) compared with debt or liquid instruments.

Q29. A demat account is maintained with:

A. SEBI
B. Depository participants
C. RBI
D. Mutual funds


Answer: B

Explanation: Demat accounts are opened and maintained by Depository Participants (DPs) who operate under depositories like NSDL/CDSL.

Q30. Depositories in India:

A. NSDL & CDSL
B. NSE & BSE
C. SEBI & RBI
D. SBI & HDFC


Answer: A
Explanation: India has two central depositories — NSDL (National Securities Depository Ltd) and CDSL (Central Depository Services Ltd) — which hold securities in electronic form.

Comments

Post a Comment

Popular posts from this blog

🇮🇳 Bihari Words Part 2: More Funny & Savage Bhojpuri Slang You’ll Love! 😂🔥

-
Image
  The charm of Bihar isn’t just in its food, festivals, or people — it’s in its language! Every word in the Bihari dialect (especially Bhojpuri) carries emotion, drama, and humor. You can’t just hear it — you have to feel it! ❤️ So here’s Part 2 of our most loved Bihari words — from the ones that’ll make you laugh 😆 to the ones that’ll make you go, “Aree wah! Ee ta mast ba!” 🙌 💬 More Funny Bihari Words with Meanings 🗣️ Bihari Word 💡 Meaning (in English) 🤓 Usage/Feeling Bhaklol Foolish / Silly “Arey bhaklol ho gaya ka?” (Have you gone nuts?) 🤪 Lappan Lazy person “Ee lappan kab uthbe?” (When will this lazy one wake up?) 😴 Phat gayi Got scared “Result dekh ke ta phat gayi!” (I got scared after seeing the result!) 😅 Jhakmaar Show-off / Overacting person “Kitna jhakmaar hai ee!” (What a drama queen!) 🎭 Chapraasi Informal word for messenger or helper Often used teasingly 😜 Chappal maar denge We’ll hit you with slippers Said jokingly but with emotion 😂 Ghochu Dumb / I...
Read more

NISM Research Analyst Mock Test 2025 – Free Chapter-Wise Practice Questions

-
 Chapter 1: Introduction to Research Analyst Profession — Mock Questions Q1. The primary role of a Research Analyst is to: A. Provide investment advice to clients directly B. Conduct research and make recommendations based on analysis C. Trade on behalf of clients D. Manage portfolios ✅ Answer: B Explanation: A research analyst studies securities, industries, and markets to provide insights and recommendations — not to trade or manage portfolios directly. Q2. Which of the following is NOT a typical function of a research analyst? A. Data collection and analysis B. Forecasting company performance C. Execution of client trades D. Writing research reports ✅ Answer: C Explanation: Analysts do not execute trades — that’s done by brokers or dealers. Q3. Sell-side analysts are typically employed by: A. Mutual funds B. Portfolio management companies C. Brokerage or investment banks D. Insurance companies ✅ Answer: C Explanation: Sell-side analysts work for brokerag...
Read more

Why Employees Quit — and How HR Can Build a Culture That Makes Them Stay

-
Image
Learn how HR can boost employee satisfaction through better communication, purpose, care, work-life balance, and involvement in decisions. Employees play a vital role in the formation and success of any organization. However employees are often neglected and the company wants them to work more and more, they end up quitting the job because of lack of appreciation and rewards. So in order to make them satisfied and happy being an HR,  implement certain policies to create values for the company and society: 🌟 Employees: The Heartbeat of Every Successful Organization Employees are the foundation of every thriving company. Yet too often, they’re expected to work harder without appreciation or recognition. Over time, this leads to frustration, disengagement, and ultimately — resignation. As HR professionals, our responsibility goes beyond recruitment and payroll. We must create an environment where employees feel valued, heard, and motivated. Here are five key HR strategi...
Read more