100+ Free NISM Series V-A Practice Questions

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A distributor must complete which requirement before being permitted to sell mutual funds and earn commission in India?

Pass the NISM-Series-V-A certification and obtain an ARN from AMFI

Hold a banking licence from RBI

Obtain a CFA charter

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2026 Statistics

Key Facts: NISM Series V-A Exam

100

MCQ Questions

NISM Syllabus Outline

50%

Passing Marks

NISM Syllabus Outline

120 min

Time Limit

NISM Syllabus Outline

Negative Marking

NISM Syllabus Outline

3 yrs

Certificate Validity

NISM

Mandatory

For ARN / MF Distribution

AMFI / SEBI

The NISM-Series-V-A: Mutual Fund Distributors Certification Examination has 100 single-mark multiple-choice questions worth 100 marks, completed in 120 minutes, with a 50% passing standard (50 of 100 marks) and no negative marking. It is mandatory for individuals seeking an ARN to distribute mutual funds in India. The certificate is valid for three years and is renewable through CPE. Higher-weight units include Investor Services (12%), Legal & Regulatory Environment, Accounting/Valuation/Taxation, Return-Risk-Performance, and Scheme Selection.

Sample NISM Series V-A Practice Questions

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

1In a mutual fund, the money that an investor contributes is invested in a portfolio of securities held in trust on the investor's behalf. What does this make the investor?

A.A lender to the AMC

B.A beneficial owner of the underlying portfolio in proportion to units held

C.A creditor of the trustee

D.A guarantor of the scheme's returns

Explanation: A mutual fund pools money from many investors and invests it in securities held in trust. Each investor holds units and is a beneficial owner of the scheme's portfolio in proportion to the units held, sharing gains, losses, and expenses.

2Which of the following is a key advantage that mutual funds offer to small retail investors?

A.A guaranteed minimum annual return

B.Exemption from all capital gains tax

C.Direct voting control over portfolio companies

D.Professional management and diversification at low investment amounts

Explanation: Mutual funds give retail investors access to professional fund management and a diversified portfolio even with small amounts, plus economies of scale and liquidity. This is a core benefit highlighted in the NISM workbook.

3A close-ended mutual fund scheme differs from an open-ended scheme primarily because a close-ended scheme:

A.Has a fixed maturity and a fixed number of units, with units listed on a stock exchange for liquidity

B.Can be bought and redeemed from the AMC on any business day

C.Never declares a NAV

D.Is exempt from SEBI regulation

Explanation: A close-ended scheme has a fixed maturity period and issues a fixed number of units during the NFO. After the NFO it is not open for continuous purchase/redemption with the AMC, so units are listed on a stock exchange to provide investors an exit route.

4What does Net Asset Value (NAV) per unit of a mutual fund scheme represent?

A.The face value at which units were first issued

B.The net assets of the scheme divided by the number of outstanding units

C.The market price at which units trade on the stock exchange

D.The total commission paid to distributors

Explanation: NAV per unit equals the scheme's net assets (market value of investments plus receivables minus liabilities) divided by the total number of outstanding units. It reflects the per-unit value of the portfolio on a given day.

5Which statement about the role of mutual funds in the economy is correct?

A.They channel household savings into capital markets and support corporate fundraising

B.They replace the need for banks entirely

C.They only invest in government securities

D.They are prohibited from investing in equity shares

Explanation: Mutual funds mobilise household and institutional savings and deploy them into equity and debt markets, supporting capital formation and corporate fundraising while offering investors a professionally managed vehicle.

6An investor wants exposure to a basket of stocks that tracks the Nifty 50 index at low cost. Which scheme type is most suitable?

A.A sector fund

B.An index fund or index ETF

C.A liquid fund

D.An arbitrage fund

Explanation: An index fund (or index ETF) passively tracks a benchmark such as the Nifty 50, replicating its constituents and weights. This gives broad, low-cost exposure because it does not require active stock selection.

7Which of the following is a limitation of mutual fund investing that a distributor should disclose to investors?

A.Investors bear no costs at all

B.Mutual funds eliminate market risk

C.Investors are personally liable for the fund's debts

D.Past performance does not guarantee future returns and the fund value can fall

Explanation: A key limitation is that mutual fund returns are market-linked and not guaranteed; past performance does not assure future results and NAV can decline. Distributors must communicate this honestly under the code of conduct.

8A New Fund Offer (NFO) for an open-ended scheme is followed by an ongoing offer period. What characterises the ongoing offer period?

A.Investors can continuously buy and redeem units at NAV-based prices

B.Units can only be sold back at maturity

C.No NAV is declared

D.The scheme is converted into a close-ended scheme

Explanation: After the NFO of an open-ended scheme, the ongoing offer period allows investors to continuously purchase and redeem units at prices based on the applicable NAV, giving them daily liquidity.

9In the three-tier structure of an Indian mutual fund, which entity holds the assets of the fund in trust for the benefit of unit holders?

A.The Asset Management Company (AMC)

B.The Sponsor

C.The Trust, overseen by the Trustees

D.The Registrar and Transfer Agent (RTA)

Explanation: An Indian mutual fund is constituted as a Trust. The Sponsor sets it up, the Trustees hold the property of the mutual fund in trust for unit holders, and the AMC manages the investments. The trustees safeguard investor interests.

10Which constituent of a mutual fund is responsible for the safekeeping of the securities held by the scheme?

A.The Distributor

B.The Custodian

C.The Auditor

D.The Sponsor

Explanation: The Custodian is appointed to have custody of and safekeep the securities and other assets of the mutual fund. The custodian must be registered with SEBI and is independent of the sponsor.

About the NISM Series V-A Exam

NISM-Series-V-A is the mandatory certification for individuals seeking an AMFI Registration Number (ARN) to sell or distribute mutual funds in India. It tests mutual fund concepts, fund structure, SEBI/AMFI regulation, offer documents, distribution practices, accounting, valuation, taxation, investor servicing, risk and return, and scheme and financial-plan selection through 100 single-mark MCQs.

Questions

100 scored questions

Time Limit

120 minutes (2 hours)

Passing Score

50% (50 of 100 marks); no negative marking

Exam Fee

INR 1,500 plus applicable GST (NISM fee, subject to revision) (National Institute of Securities Markets (NISM))

NISM Series V-A Exam Content Outline

Concept & Role of a Mutual Fund

What a mutual fund is, roles of investors and the industry, fund types, open- and close-ended schemes, units, NAV, and advantages and limitations of mutual fund investing.

Fund Structure & Constituents

Three-tier structure of sponsor, trustee, and AMC, plus custodian, RTA, auditors, fund accountants, distributors, and the role of SEBI and AMFI.

10%

Legal & Regulatory Environment

SEBI (Mutual Funds) Regulations 1996, AMFI code of conduct, investor protection, KYC, AML/PMLA, SCORES grievance redressal, and regulatory roles.

Offer Document

SID, SAI, and KIM contents, NFO process, drafting and approval, key information disclosed to investors, and how to read an offer document.

Fund Distribution & Channel Management Practices

Types of distributors, ARN and EUIN, modes of distribution, trail commission, commission disclosure, due diligence by AMCs, and nomination of distributors.

10%

Accounting, Valuation & Taxation

NAV computation, total expense ratio, mark-to-market valuation, dividend/IDCW, capital gains taxation, STT, TDS, and tax treatment of equity and debt funds.

12%

Investor Services

Account opening, KYC and CKYC, folio, transactions, SIP/STP/SWP, redemption, nomination, transmission, statements, and investor grievance handling.

10%

Return, Risk & Performance of Funds

Drivers of return and risk, measures of return (simple, CAGR, XIRR), standard deviation, beta, Sharpe and Treynor ratios, benchmarks, and SEBI return-representation norms.

10%

Mutual Fund Scheme Selection

Selecting equity, debt, and hybrid schemes, scheme categorization, expense ratio, fund manager and portfolio analysis, and matching schemes to investor needs.

Selecting the Right Investment Products for Investors

Classifying financial products, comparing mutual funds with other products, gold and real estate, and aligning products to investor goals and risk profile.

Helping Investors with Financial Planning

Financial planning need and process, life-cycle and wealth-cycle stages, risk profiling, asset allocation, and the role of the distributor as adviser.

Recommending Model Portfolios & Financial Plans

Risk profiling tools, strategic and tactical asset allocation, model portfolios for investor types, and building a goal-based financial plan.

How to Pass the NISM Series V-A Exam

What You Need to Know

Passing score: 50% (50 of 100 marks); no negative marking
Exam length: 100 questions
Time limit: 120 minutes (2 hours)
Exam fee: INR 1,500 plus applicable GST (NISM fee, subject to revision)

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 V-A Study Tips from Top Performers

1Prioritise the higher-weight units, Investor Services, Legal and Regulatory, Accounting/Valuation/Taxation, Return-Risk-Performance, and Scheme Selection, which together carry over half the marks.

2Because there is no negative marking, answer every question and never leave a blank.

3Memorise key numeric facts such as the 50% pass mark, the SEBI scheme categories, and equity-versus-debt fund holding periods for taxation.

4Use the free official NISM workbook as the primary source and reconcile any third-party material against it.

5Practise return formulas (CAGR, XIRR) and risk ratios (Sharpe, Treynor) with sample numbers so application questions are fast.

6Take at least two full 100-question timed mocks to build pacing for the 120-minute limit.

Frequently Asked Questions

How many questions are on the NISM Series V-A exam?

The NISM-Series-V-A exam has 100 multiple-choice questions of 1 mark each, for a total of 100 marks. Candidates have 120 minutes to complete the test.

What is the passing score for NISM Series V-A?

The passing standard is 50%, meaning a candidate must score at least 50 out of 100 marks. There is no negative marking, so candidates should attempt every question.

Is there negative marking in NISM Series V-A?

No. NISM-Series-V-A has no negative marking. Because wrong answers are not penalised, candidates should answer all 100 questions even if unsure.

Why do I need the NISM Series V-A certification?

NISM-Series-V-A is mandatory for individuals who want an AMFI Registration Number (ARN) to sell or distribute mutual funds in India. Employees of distributors who interact with investors also need an EUIN linked to a valid certification.

How long is the NISM Series V-A certificate valid?

The certificate is valid for three years from the test date. It can be renewed before expiry through the Continuing Professional Education (CPE) program rather than re-taking the full examination.

How much does the NISM Series V-A exam cost in 2026?

NISM lists an examination fee of around INR 1,500 plus applicable GST, subject to revision. AMFI ARN registration after passing carries a separate fee.

How much study time does NISM Series V-A require?

Most candidates report 30-50 hours of preparation using the official NISM workbook. The workbook is available free as a PDF download from NISM.

Where do I take the NISM Series V-A exam?

It is a computer-based, in-person exam taken at NISM-authorised test centres across India. Candidates register and schedule through the NISM certifications portal.