Practice Set - 3 | Practice Set | NISM Series XXI-B: Portfolio Managers Certification Examination

Question 1

The primary role of compliance officers in PMS operations is to:

Question 2

A portfolio manager uses complicated fee disclosures knowing clients may misunderstand actual charges. This behavior primarily violates:

Question 3

A PMS provider highlights only top-performing years in marketing material while omitting major drawdowns. This is primarily:

Question 4

A PMS employee manipulates internal reports to conceal unauthorized trades. This conduct primarily indicates:

Question 5

Can a portfolio manager ethically refuse client instructions if they violate regulations?

Question 6

Can unethical behavior by a single PMS employee create reputational risk for the entire organization?

Question 7

A PMS organization lacks segregation between trading and compliance functions. The biggest resulting risk is:

Question 8

A portfolio manager repeatedly recommends frequent portfolio restructuring without clear investment rationale. This may indicate:

Question 9

Which action most directly strengthens ethical culture within a PMS organization?

Question 10

Can governance failures remain hidden for long periods before causing visible losses?

Question 11

A PMS provider creates compensation structures rewarding only aggressive short-term returns. The greatest risk is:

Question 12

The strongest purpose of fiduciary standards in portfolio management is to:

Question 13

Which governance feature most directly improves accountability within PMS firms?

Question 14

Can a portfolio manager face ethical concerns even when clients have formally signed risk disclosures?

Question 15

Can a conflict of interest arise between short-term performance incentives and long-term client goals?

Question 16

A PMS employee uses knowledge of upcoming large client purchases to advise relatives privately. This most likely constitutes:

Question 17

Can ethical failures damage financial markets even beyond affected clients?

Question 18

A portfolio manager trades aggressively to outperform competitors despite client mandates emphasizing capital preservation. This primarily reflects:

Question 19

Which of the following is most likely to reduce conflicts of interest in PMS firms?

Question 20

Can transparent disclosure of conflicts of interest automatically eliminate ethical concerns?

Question 21

A portfolio manager intentionally delays execution of client sell orders to avoid showing short-term portfolio losses in reports. This behavior primarily violates:

Question 22

Which of the following best reflects fair client treatment?

Question 23

A portfolio manager knowingly recommends unsuitable leveraged products to elderly conservative investors. This mainly violates:

Question 24

A portfolio manager intentionally delays disclosure of operational errors until after new client onboarding. This mainly violates:

Question 25

Practice Set - 3