📊 NISM Series XXI-A Chapter 10 of 12 ⚖ 10 of 100 marks weightage

Ch.10: Performance Measurement and Evaluation of Portfolio Managers

Practice questions for NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors Certification Examination, Chapter 10: Performance Measurement and Evaluation of Portfolio Managers. This chapter explains how a portfolio manager's results are measured and judged. It covers the main return measures (HPR, XIRR, TWRR, gross vs net, pre- vs post-tax, portfolio return), the risk measures (standard deviation, beta, systematic vs unsystematic risk) and the Sharpe and Treynor ratios. It closes with benchmarking, attribution analysis, APMI valuation norms for debt securities and how investors should select a portfolio manager. Carries 10 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

How holding period return, XIRR and TWRR differ, and why TWRR is the right yardstick for judging a manager when clients add or withdraw money.
How fees and expenses turn gross return into net return, and how pre-tax and post-tax returns relate.
How total, systematic and unsystematic risk are measured using standard deviation and beta, including portfolio beta as a weighted average.
How the Sharpe and Treynor ratios adjust return for risk and why their rankings can diverge for poorly diversified portfolios.
What makes a good benchmark, how attribution splits excess return into allocation, selection and interaction effects, and how debt valuation and manager due diligence work.

Key Terms:Holding period return (HPR)XIRRTime-weighted rate of return (TWRR)Gross vs net returnBetaSharpe ratioTreynor ratioCustomised benchmarkAttribution analysisEmpanelled valuation agency

Free Sample Question

Q1MCQMediumHPR assumption

Which simplifying assumption does the holding period return make about income received during the period?

AAll income is assumed to be reinvested on the date it is received

BIncome is excluded and only the change in market value is counted

✓All income is assumed to be received at the end of the period

DIncome is assumed to be spread evenly across each month of the period

💡 The HPR measure assumes all income distributions arrive at the end of the period; despite this limitation, it is widely used as the starting point of performance measurement.

79 more questions in this chapter

The full XXI-A question bank (800 questions across all 12 chapters, with explanations) is included in the ₹199 mock pack and the notes PDF. Try the free full-length mock first, no login needed.

Start the free XXI-A mock Get notes and question bank

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 10: Performance Measurement and Evaluation of Portfolio Managers with verified answers and explanations. BullWiser is an independent exam preparation platform — not affiliated with NISM, SEBI or APMI. Last updated: September 30, 2026.

NISM SERIES XXI-A

Practice the full Series XXI-A question bank.

12 chapters, 100 marks, 60% pass, negative marking. Take the free mock test or get the complete study pack.

Try the Free XXI-A Mock Test →

✓ Unlock the 8 full mocks (₹199), pass the real NISM exam, and get your ₹199 back in your UPI. Conditions apply

← Ch.9: Portfolio Management Process Ch.11: Taxation →