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100+ Free NISM Series X-B Practice Questions

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Key Facts: NISM Series X-B Exam

120 questions

90 single-mark MCQs plus 6 caselets of 5 two-mark sub-questions on Series X-B

NISM Investment Adviser (Level 2) exam structure

150 marks

Maximum marks on the NISM-Series-X-B examination

NISM Investment Adviser (Level 2) exam structure

60%

Passing score required on NISM-Series-X-B

NISM Investment Adviser (Level 2) exam structure

25% negative marking

Penalty applied for each wrong answer on Series X-B

NISM Investment Adviser (Level 2) exam structure

3 hours

Time limit for the NISM-Series-X-B examination

NISM Investment Adviser (Level 2) exam structure

Rs. 1,500 + GST

Registration fee for the NISM-Series-X-B certification examination

NISM certifications portal

3 years

Validity of the NISM-Series-X-B certificate before CPE renewal

NISM Investment Adviser (Level 2) certification

Levels 1 and 2

Both X-A and X-B must be passed for SEBI investment-adviser registration

SEBI (Investment Advisers) Regulations, 2013

The NISM-Series-X-B (Investment Adviser Level 2) examination is the advanced SEBI-mandated certification for investment advisers in India, taken after passing Level 1 (Series X-A). It contains 90 single-mark multiple-choice questions and 6 caselets of 5 two-mark sub-questions each, totalling 120 questions and 150 marks, with a 3-hour limit, a 60% pass mark and 25% negative marking. The fee is Rs. 1,500 plus GST and the certificate is valid for three years. The syllabus is case-study driven: risk and insurance planning, retirement planning, taxation, estate planning, behavioural finance and a comprehensive investment-advice module covering risk profiling, asset allocation, portfolio construction, product suitability and SEBI (Investment Advisers) Regulations, 2013. This 100-question bank provides original practice across these advanced advisory topics.

Sample NISM Series X-B Practice Questions

Try these sample questions to test your NISM Series X-B exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under the Human Life Value (HLV) approach to life insurance need analysis, what does the calculation primarily estimate?
A.The present value of a person's future income available for dependants
B.The total premium a client can afford to pay
C.The maturity value of an endowment policy
D.The replacement cost of a client's physical assets
Explanation: The Human Life Value approach estimates the economic value of a person's future income stream that would be lost to dependants on premature death, discounted to its present value. This figure guides the life-cover requirement.
2A pure term life insurance plan is characterised by which of the following?
A.High life cover at low premium with no maturity benefit if the insured survives
B.A guaranteed lump sum on maturity plus bonuses
C.Market-linked investment value with partial withdrawals
D.Lifelong cover with a guaranteed surrender value from year one
Explanation: A pure term plan provides only death cover. It offers a large sum assured for a low premium and pays nothing if the insured survives the term, making it the most cost-efficient protection product.
3In a Unit Linked Insurance Plan (ULIP), the investment risk on the chosen funds is borne by whom?
A.The policyholder
B.The life insurer
C.The Insurance Regulatory and Development Authority of India
D.The appointed actuary
Explanation: In a ULIP, premiums net of charges are invested in unit-linked funds chosen by the policyholder, who bears the resulting investment risk. The fund value rises or falls with market performance.
4A client aged 35 earns Rs. 12 lakh a year, plans to work 25 more years, and you assume a 7% discount rate. Which statement best describes how the Human Life Value would compare with simply multiplying income by years?
A.Discounting future income makes the HLV lower than the simple multiple
B.Discounting makes the HLV higher than the simple multiple
C.HLV equals income multiplied by years with no adjustment
D.HLV ignores the number of working years
Explanation: HLV discounts each future year's income to present value, so the sum is lower than the undiscounted product of annual income and working years. A 7% rate reduces the value of income earned far in the future.
5Which type of health insurance plan pays a fixed lump sum on the diagnosis of a covered illness, irrespective of actual hospital expenses?
A.Critical illness (benefit) policy
B.Indemnity hospitalisation policy
C.Top-up health policy
D.Group mediclaim policy
Explanation: A critical illness policy is a benefit (defined-benefit) plan that pays a predetermined lump sum on diagnosis of a listed illness, regardless of the bills incurred. The payout helps replace income and meet non-medical costs.
6The principle of indemnity in general insurance means that the insured should:
A.Be restored to the same financial position as before the loss, not profit from it
B.Receive the full sum insured regardless of the actual loss
C.Receive a fixed benefit on the occurrence of an event
D.Pay no premium if no claim is made
Explanation: Indemnity ensures the insured is compensated for the actual loss and placed back in the pre-loss financial position, preventing profit from a claim. It underlies most property and motor insurance contracts.
7An adviser is integrating insurance into a financial plan. Which sequence reflects sound practice?
A.Assess risks and protection needs first, then recommend cover before allocating surplus to investments
B.Recommend investment products first, then buy insurance with whatever is left
C.Buy the highest-commission policy to maximise the adviser's earnings
D.Avoid insurance entirely if the client already invests in equities
Explanation: Protection planning should precede investment planning so that risks of death, disability and large medical costs are covered before surplus is directed to investments. This protects the plan from catastrophic shocks.
8Which factor would most increase a client's life insurance requirement under a needs-based analysis?
A.A large outstanding home loan and young dependent children
B.A fully repaid mortgage and no dependants
C.A substantial existing investment corpus relative to liabilities
D.A working spouse with an independent high income
Explanation: A needs-based analysis adds liabilities and future financial goals of dependants and subtracts existing assets. A large home loan and young children raise the protection gap that life cover must fill.
9A personal accident insurance policy primarily covers:
A.Death and disablement arising from accidents
B.Expenses of routine outpatient consultations
C.Loss of investment value in a market downturn
D.Maturity benefits on survival to a set age
Explanation: A personal accident policy provides benefits for accidental death and for permanent or temporary disablement caused by accidents. It is a benefit-type cover distinct from health indemnity insurance.
10Why is an endowment policy generally a less efficient way to meet a large protection need than a term plan plus separate investments?
A.For the same premium, an endowment offers far lower life cover because part of the premium funds savings
B.An endowment provides no death benefit at all
C.Term plans cannot be bought for long durations
D.Endowment policies carry no charges
Explanation: An endowment bundles protection with a savings element, so for a given premium the sum assured is much smaller than a pure term plan. Separating protection (term) from investments usually gives more cover and flexibility.

About the NISM Series X-B Exam

The NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination is the advanced SEBI-mandated test for investment advisers in India. Building on the NISM-Series-X-A (Level 1) foundation, it focuses on applied, case-study-based financial advice: risk management and insurance planning, retirement planning, taxation, estate planning, behavioural finance and a comprehensive investment-advice module that brings together client and risk profiling, asset allocation, portfolio construction, product suitability and review. It also tests the SEBI (Investment Advisers) Regulations, 2013, fiduciary duty, fee structures and the code of conduct. Both Level 1 and Level 2 must be passed to satisfy the SEBI certification requirement for individual investment advisers, principal officers and persons associated with investment advice.

Assessment

90 multiple-choice questions of 1 mark each plus 6 caselets, each with 5 multiple-choice sub-questions of 2 marks each, totalling 120 questions and 150 marks. All items are multiple choice with one correct answer.

Time Limit

3 hours (180 minutes).

Passing Score

60%, with negative marking of 25% of the marks allotted to each question answered incorrectly.

Exam Fee

Rs. 1,500 plus applicable GST, paid at registration through the NISM certifications portal. (National Institute of Securities Markets (NISM))

NISM Series X-B Exam Content Outline

16%

Risk Management and Insurance Planning

Insurance need analysis, human-life-value and needs approaches, life insurance products (term, endowment, money-back, ULIP), health and general insurance, and integrating insurance into a comprehensive financial plan.

16%

Retirement Planning

Retirement need analysis, accumulation versus distribution phases, inflation and longevity risk, and Indian retirement products including NPS, EPF, PPF, annuities and superannuation, with suitability for different clients.

20%

Taxation and Estate Planning

Heads of income, residential status, capital gains on equity and debt, taxation of mutual funds, dividends and other products, and estate-planning tools such as wills, nomination, joint holding, gifts and trusts.

16%

Behavioural Finance and Client Profiling

Behavioural biases (overconfidence, anchoring, loss aversion, herding), risk capacity versus risk tolerance, data gathering, life-cycle and wealth-cycle stages, and converting client goals into an advisory plan.

20%

Comprehensive Investment Advice and Portfolio Construction

Strategic and tactical asset allocation, portfolio construction, diversification and rebalancing, comparing equity, debt, derivative and mutual-fund products, suitability assessment and ongoing review, applied through case scenarios.

12%

Regulation, Ethics and Compliance

SEBI (Investment Advisers) Regulations, 2013, registration and qualification norms, fiduciary duty, fee-only and separation-of-advice rules, conflict-of-interest management, disclosures, recordkeeping and the code of conduct.

How to Pass the NISM Series X-B Exam

What You Need to Know

  • Passing score: 60%, with negative marking of 25% of the marks allotted to each question answered incorrectly.
  • Assessment: 90 multiple-choice questions of 1 mark each plus 6 caselets, each with 5 multiple-choice sub-questions of 2 marks each, totalling 120 questions and 150 marks. All items are multiple choice with one correct answer.
  • Time limit: 3 hours (180 minutes).
  • Exam fee: Rs. 1,500 plus applicable GST, paid at registration through the NISM certifications portal.

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

NISM Series X-B Study Tips from Top Performers

1Read the official NISM-Series-X-B workbook chapter by chapter and revisit Level 1 (X-A) basics, since Level 2 assumes that foundation.
2Practise full caselets under time pressure, because the 6 case studies carry 2 marks per sub-question and reward applying concepts to a client scenario.
3Because of the 25% negative marking, avoid blind guessing and learn to eliminate clearly wrong options before committing to an answer.
4Memorise current taxation thresholds and holding periods for equity and debt capital gains, and note that tax rules change frequently, so confirm the year applicable to your exam.
5Build a one-page summary of SEBI (Investment Advisers) Regulations, 2013 essentials: registration, fiduciary duty, fee structures, disclosures and the code of conduct.
6Work through asset-allocation and portfolio-rebalancing examples by hand so you can quickly construct and review portfolios in case-based questions.

Frequently Asked Questions

How many questions are on the NISM Series X-B exam?

The examination has 90 single-mark multiple-choice questions plus 6 caselets, each with 5 two-mark multiple-choice sub-questions, for a total of 120 questions worth 150 marks.

What is the passing score for NISM Series X-B?

You must score 60% to pass. There is negative marking of 25% of the marks assigned to each question you answer incorrectly, so guessing carries a penalty.

How long is the NISM Series X-B exam and what does it cost?

The test runs for 3 hours (180 minutes). The registration fee is Rs. 1,500 plus applicable GST through the NISM certifications portal, and the certificate is valid for three years.

Do I need to pass Level 1 before taking Level 2?

Yes. To meet the SEBI certification requirement for investment advisers you must pass both NISM-Series-X-A (Level 1) and NISM-Series-X-B (Level 2).

What topics does NISM Series X-B cover?

It covers risk and insurance planning, retirement planning, taxation, estate planning, behavioural finance and a comprehensive investment-advice module spanning risk profiling, asset allocation, portfolio construction, product suitability and SEBI rules.

Are these official NISM practice questions?

No. These are original OpenExamPrep practice questions modelled on the published X-B syllabus. Always study the official NISM workbook and SEBI (Investment Advisers) Regulations, 2013 for authoritative content.