Free practice · 15 questions · Three modules
NISM V-D & SIF distributor exam questions with answers
Prepare for the Mutual Fund – Specialized Investment Fund Distributors Certification Examination with original multiple-choice practice questions, numerical examples and clear explanations. Attempt the question first, then check the reasoning.
Prepared by SIFPrime Academy · Updated 9 October 2026. Independent exam preparation; NISM conducts the certification examination.
What to practise for the SIF distributor exam
The official Series V-D examination covers mutual funds, equity derivatives and interest rate derivatives. These examples help you practise concepts and calculations across those subjects. They are original teaching questions, not actual or recalled examination papers.
Mutual fund exam questions
Practise NAV, investment returns, scheme selection and investor services before moving to derivatives.
1. A scheme has assets of ₹120 crore, liabilities of ₹5 crore and 5 crore units outstanding. What is its NAV?
- ₹24
- ₹23
- ₹25
- ₹20
Show answer and explanation
Answer: B. ₹23
NAV = (assets − liabilities) ÷ units. (120 − 5) crore ÷ 5 crore units = ₹23 per unit.
2. An investor buys a growth-option unit at ₹20 and redeems it at ₹22. Ignoring costs and taxes, what is the holding-period return?
- 2%
- 9.09%
- 10%
- 20%
Show answer and explanation
Answer: C. 10%
Return = (22 − 20) ÷ 20 × 100 = 10%. Use the purchase price as the denominator.
3. An investor needs money in two months and has a low tolerance for loss. What should a distributor assess first?
- Which equity fund returned the most last year
- Liquidity needs, time horizon and risk suitability
- Which scheme pays the highest commission
- Whether the fund name is familiar
Show answer and explanation
Answer: B. Liquidity needs, time horizon and risk suitability
A recommendation starts with the investor's needs, horizon and risk profile. Recent returns and distributor compensation do not establish suitability.
4. An open-ended scheme's units are normally purchased and redeemed through which mechanism?
- Only an initial public offering
- Transactions with the fund at applicable NAV-based prices
- A guaranteed fixed redemption price
- Only an annual auction
Show answer and explanation
Answer: B. Transactions with the fund at applicable NAV-based prices
Open-ended funds accept ongoing purchases and redemptions at applicable NAV-based prices, subject to scheme terms and transaction rules.
5. Which measure incorporates both return and volatility when comparing fund performance?
- Number of folios
- Face value
- Sharpe ratio
- Scheme name
Show answer and explanation
Answer: C. Sharpe ratio
The Sharpe ratio compares excess return over a risk-free rate with return volatility. Compare consistent periods and understand the measure's limitations.
Equity derivatives exam questions
Work through futures positions, option payoffs, break-even prices and hedging. State whether the question asks for payoff or profit.
6. A trader buys a call with strike ₹100 for a premium of ₹6. The underlying closes at ₹115 at expiry. What is the profit per unit, ignoring costs?
- ₹15
- ₹9
- ₹21
- −₹6
Show answer and explanation
Answer: B. ₹9
Call payoff = max(115 − 100, 0) = ₹15. Subtract the ₹6 premium: profit = ₹9 per unit.
7. What is the expiry break-even price for a long call with strike ₹250 and premium ₹12?
- ₹238
- ₹250
- ₹262
- ₹12
Show answer and explanation
Answer: C. ₹262
Long-call break-even = strike + premium = ₹262, ignoring transaction costs.
8. A trader buys a put with strike ₹200 for ₹8. The underlying is ₹180 at expiry. What is the net profit per unit?
- ₹20
- ₹12
- −₹8
- ₹28
Show answer and explanation
Answer: B. ₹12
Put payoff = max(200 − 180, 0) = ₹20. Profit after the ₹8 premium is ₹12 per unit.
9. A trader is long 100 units of futures at ₹500 and closes at ₹515. What is the profit, ignoring costs?
- ₹15
- ₹500
- ₹1,500
- −₹1,500
Show answer and explanation
Answer: C. ₹1,500
Long futures profit = (exit price − entry price) × quantity = (515 − 500) × 100 = ₹1,500.
10. Which position is commonly used to hedge broad market downside in an equity portfolio?
- Buy additional index futures
- Sell index futures in an appropriate hedge size
- Sell all protective puts
- Increase leverage without changing exposure
Show answer and explanation
Answer: B. Sell index futures in an appropriate hedge size
A short index-futures hedge can offset some market losses. The hedge size depends on portfolio value, beta and contract value; basis risk remains.
Fixed-income and interest rate derivatives questions
Focus on bond price–yield relationships, duration, coupon income and the direction of a hedge.
11. What normally happens to the price of an existing fixed-rate bond when market yields rise, all else equal?
- It rises
- It falls
- It must stay unchanged
- It becomes equal to its coupon
Show answer and explanation
Answer: B. It falls
A fixed-rate bond's price and yield move in opposite directions. Higher required yields reduce the present value of its cash flows.
12. A bond has modified duration 4. If yield rises by 0.50 percentage points, what is the approximate percentage price change?
- +2%
- −2%
- −0.5%
- +4%
Show answer and explanation
Answer: B. −2%
Approximate percentage price change = −modified duration × yield change = −4 × 0.005 = −0.02, or −2%. This is a duration approximation, ignoring convexity.
13. A ₹1,000 face-value bond pays an 8% annual coupon and trades at ₹950. What is its approximate current yield?
- 8%
- 9.5%
- 8.42%
- 5%
Show answer and explanation
Answer: C. 8.42%
Annual coupon = ₹80. Current yield = 80 ÷ 950 × 100 ≈ 8.42%. Current yield is different from yield to maturity.
14. Which bond generally has the greatest sensitivity to a small yield change, all else equal?
- The bond with the lowest modified duration
- The bond with the highest modified duration
- Every bond has identical sensitivity
- Only the bond with the highest face value
Show answer and explanation
Answer: B. The bond with the highest modified duration
Higher modified duration indicates a larger approximate percentage price response to the same small change in yield.
15. A portfolio holds bonds and is concerned about rising yields. Which hedge direction is typically appropriate using bond-price futures?
- Long bond-price futures
- Short bond-price futures
- Buy more unhedged bonds
- Neither direction can affect exposure
Show answer and explanation
Answer: B. Short bond-price futures
Rising yields generally lower bond prices. A short bond-price futures position may gain as prices decline and offset some portfolio loss. Contract choice and hedge size matter.
Move from practice questions to exam readiness
A full mock tests timing as well as understanding: 150 questions in 180 minutes gives an average of 72 seconds per question. Check the instructions for each Academy paper because shorter subject tests have different lengths. Record errors by concept, calculation or question reading, then revise the relevant chapters before your next attempt.
For a one-mark exam question, the score is +1 for a correct answer, −0.10 for a wrong answer and 0 for an unanswered question. For example, 100 correct, 20 wrong and 30 unanswered gives 98 marks. Aim for consistent scores above the pass threshold and review the reasons behind each answer.
Questions about V-D practice
Are these actual NISM V-D exam questions?
These are original practice examples created for learning. They are not actual, recalled or leaked NISM examination questions. Use the official NISM workbook and current syllabus alongside your preparation.
Are SIF exam questions and V-D exam questions the same preparation topic?
In the Indian distributor-certification context, SIF distributor exam, NISM V-D, NISM VD, V D and Series 5D are common ways learners search for preparation for NISM Series V-D. Its full name is the Mutual Fund – Specialized Investment Fund Distributors Certification Examination.
How should I use this question set?
Attempt each question before opening its answer. Write down calculation steps, review incorrect answers and revisit the linked chapter. Then take a full-length mock separately to practise timing and negative marking.
What is the NISM V-D marking pattern?
The official examination has 150 one-mark questions in 180 minutes. The passing score is 60%, or 90 out of 150, and wrong answers attract a 10% penalty. This 15-question practice set is a short learning exercise, not a full exam simulation.
Official syllabus and study material
Use the official NISM Series V-D examination page and NISM examination FAQs to check the current exam pattern and workbook access. The worked examples on this page support revision alongside the official material.