🧪 NISM LEVEL 3 ULTRA–ULTRA HARD MOCK TEST (100 QUESTIONS)
⏱️ Time: 120 Minutes
📝 Questions: 100 MCQs
🎯 Difficulty: EXAM KILLER LEVEL
❌ Negative Marking: No (but tricky options)
📌 INSTRUCTIONS
Multiple options may look correct → choose BEST answer
Focus on concepts, not keywords
Questions include trap logic from real exam patterns
Don’t rush (time pressure is intentional)
🕒 START YOUR EXAM NOW
PART A: ADVANCED MARKET STRUCTURE (1–20)
Price discovery in capital markets primarily depends on: A) RBI policy B) Demand–Supply interaction C) Government order D) Fixed pricing
Which is NOT a function of financial market? A) Liquidity creation B) Risk transfer C) Price control by government D) Capital formation
Book building differs from fixed price issue because: A) No investor participation B) Price is discovered via demand C) Only institutions invest D) No SEBI role
Circuit filters are designed to: A) Increase volatility B) Prevent extreme price movement C) Fix share price D) Guarantee returns
Market depth is best measured by: A) Number of companies B) Order book liquidity C) GDP D) Dividend yield
Arbitrage opportunity exists when: A) Markets are efficient B) Price difference exists across markets C) No volatility exists D) Taxes increase
Settlement cycle T+1 implies: A) Trade settles instantly B) Settlement after one working day C) Weekly settlement D) Monthly settlement
Which market ensures capital formation? A) Primary market B) Secondary market C) Forex market D) Commodity market
Liquidity is highest in: A) Penny stocks B) Large-cap stocks C) Unlisted securities D) Debentures only
Insider trading violates: A) Market efficiency B) Banking rules C) Insurance rules D) Tax laws
PART B: MUTUAL FUNDS TRICK CONCEPTS (21–40)
NAV is calculated using: A) Market rumors B) Net asset value of portfolio C) Fixed RBI rate D) Broker opinion
Expense ratio directly reduces: A) Risk B) Returns C) NAV stability D) Tax liability
Tracking error is used to measure: A) Active fund performance B) Index fund deviation C) SIP returns D) Dividend yield
Beta > 1 indicates: A) Low volatility B) High volatility C) No risk D) Guaranteed return
Alpha represents: A) Market return B) Excess return over benchmark C) Risk-free rate D) NAV change
Exit load applies when: A) Buying units B) Selling before lock-in C) SIP start D) Dividend reinvestment
STP is used for: A) Tax saving B) Fund transfer between schemes C) Stock trading D) IPO application
SWP helps in: A) Investment growth only B) Regular withdrawal C) Tax calculation D) Market timing
Debt funds are affected most by: A) Weather B) Interest rate movement C) IPO demand D) Dividend
Mark-to-market is used to: A) Fix NAV B) Daily valuation adjustment C) Reduce tax D) Guarantee returns
SIP advantage comes from: A) Market timing B) Rupee cost averaging C) Fixed return D) Zero risk
Fund manager’s role is to: A) Guarantee returns B) Optimize portfolio C) Control SEBI D) Set NAV
Open-ended funds allow: A) No redemption B) Continuous liquidity C) Fixed maturity D) Government control
Closed-ended funds trade: A) Only OTC B) On stock exchange C) Only banks D) RBI window
Risk in mutual funds depends mainly on: A) AMC brand B) Asset allocation C) Advertisement D) SIP date
Debt fund risk increases due to: A) Interest rate rise B) Dividend increase C) NAV stability D) SIP inflow
Mutual fund units are priced on: A) Face value B) NAV C) Market rumor D) Broker call
Redemption means: A) Buying units B) Selling units C) Bonus issue D) IPO allotment
Systematic risk in mutual funds is: A) Diversifiable B) Non-diversifiable C) Zero D) Fixed
Equity funds are suitable for: A) Risk-free investors B) High-risk investors C) Only institutions D) Bank deposits
PART C: DERIVATIVES KILLER TRAPS (41–60)
Futures contract is: A) Right only B) Obligation C) Insurance D) Gift
Options provide: A) Obligation B) Right without obligation C) Fixed return D) No risk
Call option profits when: A) Market falls B) Market rises C) Market stable D) No volatility
Put option gains when: A) Market rises B) Market falls C) Market stable D) No trade
Delta measures: A) Time decay B) Price sensitivity C) Tax impact D) Volume
Theta represents: A) Time decay B) Risk premium C) Profit D) NAV change
Hedging strategy aims to: A) Maximize profit B) Reduce risk C) Eliminate tax D) Increase volatility
Futures pricing depends on: A) Arbitrary value B) Spot + cost of carry C) Dividend only D) RBI rate
Open interest indicates: A) Price movement B) Active contracts C) Dividend flow D) Tax data
Basis risk occurs due to: A) Perfect hedge B) Price mismatch C) Zero volatility D) Fixed price
Leverage increases: A) Only safety B) Risk and return C) Only tax D) Only NAV
Option premium depends on: A) Only stock price B) Multiple variables C) Only RBI rate D) Only dividend
Futures are used for: A) Gambling only B) Hedging + speculation C) Banking D) Insurance
Expiry date means: A) Start of contract B) End of contract C) Dividend date D) IPO date
F&O segment belongs to: A) Primary market B) Derivatives market C) Banking D) Insurance
Short selling means: A) Buying stock B) Selling borrowed stock C) Holding stock D) Bonus shares
Volatility in derivatives means: A) Stability B) Price fluctuation C) Fixed return D) Dividend
Margin requirement increases when: A) Risk increases B) Risk decreases C) NAV stable D) Dividend high
Futures position is marked to market: A) Monthly B) Daily C) Yearly D) Never
Arbitrage profit is: A) Risk-free B) High risk C) Fixed loss D) Tax-based
PART D: REGULATION TRAPS (61–80)
SEBI’s primary objective is: A) Banking control B) Investor protection C) Tax collection D) Insurance regulation
Insider trading violates: A) Market fairness B) Banking law C) Insurance rules D) GST rules
KYC failure leads to: A) Bonus B) Account freeze C) Dividend D) IPO gain
AML focuses on: A) Market growth B) Preventing money laundering C) IPO pricing D) Trading speed
Broker acts as: A) Regulator B) Intermediary C) Government D) Investor
Compliance ensures: A) Illegal profit B) Legal operation C) Market manipulation D) Fixed return
SEBI can impose: A) Dividends B) Penalties C) Bonus shares D) Interest
Grievance redressal is for: A) Profit increase B) Complaint resolution C) Trading system D) IPO launch
Depository function is: A) Cash handling B) Electronic securities storage C) Banking loans D) Tax collection
IPO allotment is based on: A) Broker choice B) SEBI guidelines C) Random guess D) Bank preference
Market manipulation is: A) Legal B) Illegal C) Encouraged D) Neutral
Audit ensures: A) Fraud B) Transparency C) Manipulation D) Loss
Risk profiling determines: A) Tax rate B) Investor suitability C) Dividend D) IPO timing
Arbitration solves: A) Market price B) Disputes C) Taxes D) Trading
Investor protection fund protects: A) Brokers B) Investors C) Companies D) Government
Compliance officer ensures: A) Profit B) Rules followed C) Trading loss D) Speculation
SEBI headquarters is in: A) Delhi B) Mumbai C) Kolkata D) Chennai
Depository participant acts as: A) Broker only B) Link between investor and depository C) Bank only D) SEBI agent
Financial fraud detection is done through: A) Rumors B) Monitoring systems C) Guessing D) Ads
Market integrity means: A) Manipulation B) Fair trading C) Insider trading D) Gambling
PART E: ULTRA CONCEPTUAL (81–100)
Efficient market hypothesis assumes: A) No info B) All info reflected in price C) Insider advantage D) Fixed price
Systematic risk is: A) Diversifiable B) Non-diversifiable C) Zero D) Negative
Inflation reduces: A) Returns B) Purchasing power C) Brokerage D) NAV
Real return equals: A) Nominal + inflation B) Nominal – inflation C) Only tax D) Only dividend
Opportunity cost is: A) Profit B) Forgone alternative C) Dividend D) Bonus
Portfolio diversification reduces: A) Risk B) Return C) Tax D) Brokerage
Correlation measures: A) Tax B) Asset movement relationship C) Dividend D) Brokerage
Rebalancing means: A) Holding B) Adjusting portfolio C) Selling all D) Buying one stock
Liquidity premium is: A) Reward for illiquidity B) Tax C) Loss D) Brokerage
Risk-return tradeoff means: A) High risk low return B) High risk high return C) No relation D) Fixed return
Behavioral finance studies: A) Taxes B) Investor psychology C) Banking D) Insurance
Herding causes: A) Stability B) Bubbles C) Fixed prices D) No trade
Market bubble is: A) Undervaluation B) Overvaluation C) Stable market D) No demand
Crash occurs due to: A) Panic selling B) Fixed demand C) RBI control D) Inflation only
Systemic risk affects: A) One stock B) Entire system C) Mutual fund only D) FD only
Sharpe ratio measures: A) Risk-adjusted return B) Tax C) Dividend D) Volume
Financial leverage increases: A) Safety B) Risk C) Tax D) Stability
Efficient diversification requires: A) Same assets B) Low correlation assets C) High tax assets D) Single stock
Long-term investing benefits from: A) Gambling B) Compounding C) Loss D) Inflation
Wealth creation depends on: A) Luck only B) Discipline + investing C) Trading only D) Borrowing