📊 NISM Series XXI-A Chapter 1 of 12 ⚖ 7 of 100 marks weightage

Ch.1: Investments

Practice questions for NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors Certification Examination, Chapter 1: Investments. This chapter lays the groundwork for the rest of the syllabus. It covers how investing differs from saving and from speculation, the goals investors pursue, and how a required rate of return is built up from time value, inflation and risk. It then surveys the main investment risks, the major asset classes, and the direct and managed routes (mutual funds, PMS, AIFs) through which investors reach them. Carries 7 out of 100 marks. The exam has 100 MCQs, 60% passing score, and −10% negative marking per wrong answer.

What You Will Learn in This Chapter

Why saving and investing are different, and why every investor is a saver but not every saver is an investor.
How investment is separated from speculation by the valuation effort behind the decision rather than by holding period alone.
The four return objectives (capital preservation, capital appreciation, current income and tax saving) and why risk appetite must be assessed before return.
How the required rate of return is built from the real risk-free rate, expected inflation and a risk premium, including the exact nominal-rate formula.
The key investment risks, the main asset classes and how direct investing compares with mutual funds, PMS and AIFs.

Key Terms:Saving vs investmentSpeculationReal risk-free rateNominal risk-free rateRisk premiumRequired rate of returnLiquidity riskExchange rate riskStructured productsPortfolio Management Services (PMS)

Free Sample Question

Q1MCQMediumSaver goals

Meena keeps her surplus in short-term deposits to buy a phone in four months, while her brother puts money in equities for his retirement corpus. Which description fits them?

✓Meena is acting as a saver; her brother is acting as an investor

BMeena is acting as an investor; her brother as a saver

CBoth are acting as speculators

DBoth are acting purely as savers

💡 Savers accumulate funds in liquid short-term assets for short-term goals, while investors commit funds to less liquid assets like stocks for long-term goals such as retirement.

55 more questions in this chapter

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About this content: These practice questions are written by BullWiser from the syllabus of the NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors Certification Examination, using the workbook published by the National Institute of Securities Markets (NISM), Mumbai (September 2025 edition) as the fact source. NISM is a SEBI-established institution. Questions cover Chapter 1: Investments with verified answers and explanations. BullWiser is an independent exam preparation platform — not affiliated with NISM, SEBI or APMI. Last updated: September 30, 2026.

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