Practice Set - 2 | Practice Set | NISM Series XXI-B: Portfolio Managers Certification Examination

Question 1

Which of the following statements regarding PMS fees is correct?

Question 2

A PMS client receives statements showing unexplained deductions. The first operational concern should be:

Question 3

Which operational process helps prevent money laundering risks in PMS?

Question 4

An investor chooses PMS mainly because:

Question 5

Can PMS providers use hypothetical returns in presentations without proper disclosures?

Question 6

Can PMS clients have different investment objectives under the same portfolio manager?

Question 7

Can PMS providers disclose confidential portfolio holdings of one client to another client for marketing purposes?

Question 8

Which of the following statements regarding investor grievances in PMS is correct?

Question 9

A portfolio manager advertises “double your money in two years with zero risk.” This advertisement is:

Question 10

A portfolio manager can accept a client into PMS without risk profiling if the client signs a waiver declaration.

Question 11

Which of the following best explains fiduciary responsibility in PMS?

Question 12

Which of the following clients would most likely be suitable for PMS?

Question 13

Which of the following would most likely indicate poor operational control in a PMS setup?

Question 14

What is the key operational difference between mutual funds and PMS?

Question 15

Can a portfolio manager refuse to disclose risks associated with a recommended investment strategy on grounds of confidentiality?

Question 16

A PMS client instructs the manager not to invest in tobacco companies. Ignoring this instruction in non-discretionary PMS would be:

Question 17

A portfolio manager charges a performance-linked fee structure agreed upon in the client agreement. Such a fee arrangement is:

Question 18

Can a portfolio manager advertise past returns without proper disclosures and risk factors?

Question 19

Which of the following operational risks is most relevant if trade confirmations are not properly recorded?

Question 20

A client contributes securities worth Rs. 50 lakhs instead of cash while opening a PMS account. This is:

Question 21

Which of the following is most likely to be considered a conflict of interest in PMS operations?

Question 22

A portfolio manager delegates core decision-making entirely to an unregistered third party without disclosure. This is:

Question 23

In PMS operations, who typically maintains records of securities held on behalf of clients?

Question 24

A PMS provider earns brokerage from excessive trading in a client portfolio without investment rationale. This practice is commonly associated with:

Question 25

Which of the following is LEAST likely to be part of PMS operational procedures?

Question 26

A portfolio manager repeatedly ignores client communication regarding portfolio risks. This behavior primarily violates:

Question 27

The primary purpose of periodic reporting in PMS is to:

Question 28

A PMS provider fails to disclose higher risks associated with a complex derivative strategy. This primarily affects:

Question 29

A client chooses PMS expecting personalized tax-efficient strategies. This expectation is mainly linked to:

Question 30

Which situation most likely indicates front-running in PMS operations?

Question 31

A portfolio manager recommends highly leveraged products to a conservative investor despite the risk profile indicating low tolerance. This primarily violates:

Question 32

A discretionary portfolio manager purchases securities for a client without taking prior approval for each transaction. This action is:

Question 33

Which of the following would generally require immediate disclosure to PMS clients?

Question 34

Can a PMS provider use one client’s funds to temporarily settle another client’s obligations?

Question 35

A portfolio manager executes trades before obtaining required client approval in non-discretionary PMS. This is:

Question 36

Practice Set - 2