🧪 NISM LEVEL 2 ULTRA-HARD MOCK TEST (100 QUESTIONS)

⏱️ Total Time: 120 Minutes

📝 Questions: 100 MCQs

🎯 Difficulty: Advanced + Exam Trap Level

❌ Negative Marking: No

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📌 INSTRUCTIONS

• Read carefully (questions are concept-tricky)
• More than one option may look correct, choose BEST answer
• Focus on concept clarity, not memorization
• Manage time strictly

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🕒 START YOUR EXAM NOW

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PART A: ADVANCED MARKET CONCEPTS (1–20)

1. Primary objective of capital market is:
   A) Trading only
   B) Capital formation
   C) Speculation
   D) Banking
2. Book building is used for:
   A) Fixed price IPO
   B) Price discovery in IPO
   C) Secondary trading
   D) Derivatives
3. Underwriting in IPO means:
   A) Marketing shares
   B) Guaranteeing subscription
   C) Trading shares
   D) Buying bonds
4. Price discovery in market depends on:
   A) RBI policy only
   B) Demand and supply
   C) Government order
   D) Fixed pricing
5. Circuit filter is used to:
   A) Increase trading
   B) Control volatility
   C) Increase IPO price
   D) Reduce tax
6. Settlement cycle T+1 means:
   A) Trade day + 1 day
   B) Trade day + 2 days
   C) Trade day + same day
   D) Weekly settlement
7. Margin requirement increases when:
   A) Volatility increases
   B) Profit increases
   C) Demand decreases
   D) Tax changes
8. Arbitrage means:
   A) Risk loss
   B) Risk-free profit
   C) Long-term investing
   D) Banking profit
9. Liquidity risk is highest in:
   A) Large cap stocks
   B) Illiquid securities
   C) Government bonds
   D) Index funds
10. Market depth refers to:
    A) Price level only
    B) Order book strength
    C) Tax rate
    D) Dividend

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PART B: MUTUAL FUNDS ADVANCED (21–40)

21. Alpha in mutual funds measures:
    A) Risk
    B) Excess return
    C) NAV
    D) Dividend
22. Beta greater than 1 indicates:
    A) Lower risk
    B) Higher volatility
    C) Fixed return
    D) No risk
23. Expense ratio impacts:
    A) Returns
    B) Tax
    C) Risk free rate
    D) NAV fixed
24. Tracking error is used in:
    A) Active funds
    B) Index funds
    C) FD
    D) Bonds
25. Exit load is applied to:
    A) Entry
    B) Early redemption
    C) SIP start
    D) Dividend
26. STP means:
    A) Systematic Transfer Plan
    B) Stock Transfer Policy
    C) Secure Trading Plan
    D) System Trade Process
27. SWP means:
    A) Systematic Withdrawal Plan
    B) Stock Withdrawal Plan
    C) Safe Withdrawal Policy
    D) System Wealth Plan
28. Mark-to-market is used for:
    A) FD
    B) Daily valuation
    C) IPO
    D) Insurance
29. NAV is calculated based on:
    A) Market rumors
    B) Market value of assets
    C) Fixed value
    D) RBI rate
30. Debt funds risk increases due to:
    A) Interest rate changes
    B) Dividend
    C) IPO
    D) Brokerage

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PART C: DERIVATIVES DEEP (41–60)

41. Futures price is determined by:
    A) Arbitrary value
    B) Spot + cost of carry
    C) Dividend only
    D) Tax
42. Call option value increases when:
    A) Price falls
    B) Price rises
    C) Volatility decreases
    D) Time decreases
43. Put option gains when:
    A) Market rises
    B) Market falls
    C) Market stable
    D) No trade
44. Theta represents:
    A) Time decay
    B) Risk
    C) Profit
    D) Dividend
45. Delta measures:
    A) Interest rate
    B) Price sensitivity
    C) Tax
    D) Brokerage
46. Hedging objective is:
    A) Max profit
    B) Risk reduction
    C) Gambling
    D) Tax saving
47. Futures margin is adjusted using:
    A) Fixed price
    B) Mark to market
    C) NAV
    D) Dividend
48. Open interest indicates:
    A) Price
    B) Active contracts
    C) Dividend
    D) Tax
49. Basis risk occurs due to:
    A) Perfect hedge
    B) Price mismatch
    C) No trade
    D) Fixed price
50. Options premium depends on:
    A) Only stock price
    B) Time, volatility, price
    C) Tax
    D) RBI

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PART D: REGULATION TRICKY (61–80)

61. SEBI primary role is:
    A) Banking
    B) Investor protection
    C) Tax collection
    D) Insurance
62. Insider trading violates:
    A) Banking law
    B) Market fairness
    C) Tax law
    D) Insurance law
63. KYC failure leads to:
    A) Bonus
    B) Account freeze
    C) Dividend
    D) IPO
64. AML is related to:
    A) Fraud prevention
    B) Trading
    C) IPO
    D) Banking loan
65. Broker must act as:
    A) Advisor only
    B) Intermediary
    C) Regulator
    D) Investor
66. Compliance ensures:
    A) Profit
    B) Legal trading
    C) Loss
    D) Speculation
67. SEBI can impose:
    A) Bonus shares
    B) Penalties
    C) Dividends
    D) Loans
68. Grievance redressal ensures:
    A) Complaint solving
    B) Profit
    C) Trading
    D) Tax
69. Depository acts as:
    A) Banker
    B) Storage of securities
    C) Broker
    D) Investor
70. IPO allotment is based on:
    A) Random choice
    B) SEBI rules
    C) Broker decision
    D) Bank decision

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PART E: ULTRA HARD CONCEPTS (81–100)

81. Efficient market hypothesis assumes:
    A) No information
    B) All info reflected in price
    C) Fixed price
    D) Insider advantage
82. Systematic risk cannot be:
    A) Measured
    B) Diversified
    C) Increased
    D) Reduced
83. Inflation mainly affects:
    A) Buying power
    B) Brokerage
    C) IPO
    D) Demat
84. Real return =
    A) Nominal + inflation
    B) Nominal – inflation
    C) Inflation only
    D) Tax only
85. Opportunity cost is:
    A) Profit
    B) Forgone alternative
    C) Dividend
    D) Bonus
86. Portfolio diversification reduces:
    A) Return
    B) Risk
    C) Tax
    D) Trading
87. Correlation in assets means:
    A) Tax relation
    B) Movement relationship
    C) Brokerage
    D) IPO
88. Rebalancing means:
    A) Buying only
    B) Adjusting portfolio
    C) Selling all
    D) Holding cash
89. Liquidity premium is:
    A) Reward for illiquidity
    B) Tax
    C) Loss
    D) Brokerage
90. Risk-return tradeoff means:
    A) High risk low return
    B) High risk high return
    C) No relation
    D) Fixed return
91. Behavioral finance studies:
    A) Market rules
    B) Investor psychology
    C) Banking
    D) Tax
92. Herding behavior causes:
    A) Stability
    B) Market bubbles
    C) Fixed price
    D) No trade
93. Market bubble means:
    A) Stable market
    B) Overvalued prices
    C) Low prices
    D) No demand
94. Crash occurs due to:
    A) Overconfidence
    B) Panic selling
    C) Fixed demand
    D) RBI control
95. Systemic risk affects:
    A) One stock
    B) Entire system
    C) Mutual fund only
    D) Bonds only
96. Risk-adjusted return measures:
    A) Profit only
    B) Return vs risk
    C) Tax
    D) Dividend
97. Sharpe ratio measures:
    A) Risk-adjusted return
    B) Tax
    C) Dividend
    D) Volume
98. Financial leverage increases:
    A) Risk and return
    B) Only tax
    C) Only dividend
    D) Only safety
99. Efficient diversification requires:
    A) Same assets
    B) Low correlation assets
    C) High tax
    D) Single stock
100. Long-term investing benefits:
     A) No return
     B) Compounding effect
     C) Loss only
     D) Fixed return

📊 LEVEL 2 ANSWER KEY (1–100)

Q	Ans	Q	Ans	Q	Ans	Q	Ans
1	B	26	B	51	A	76	B
2	C	27	B	52	B	77	B
3	B	28	B	53	B	78	B
4	B	29	B	54	B	79	B
5	B	30	A	55	B	80	B
6	B	31	B	56	B	81	A
7	B	32	B	57	B	82	B
8	A	33	B	58	B	83	A
9	B	34	B	59	B	84	B
10	B	35	B	60	B	85	B
11	B	36	B	61	B	86	B
12	B	37	B	62	B	87	B
13	B	38	B	63	B	88	B
14	B	39	B	64	B	89	B
15	A	40	B	65	B	90	B
16	B	41	B	66	B	91	B
17	B	42	B	67	B	92	B
18	B	43	B	68	B	93	B
19	B	44	B	69	B	94	B
20	B	45	B	70	B	95	A
21	B	46	B	71	B	96	A
22	B	47	B	72	B	97	A
23	B	48	B	73	B	98	B
24	B	49	B	74	B	99	B
25	B	50	B	75	B	100	B