NISM Series 10B Investment Advisor Previous Year Questions with Solutions

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📌 Introduction

The NISM Series 10B – Investment Advisor certification is a mandatory qualification for anyone who wants to provide investment advice in India. Clearing this exam not only satisfies SEBI regulations but also boosts credibility among clients and employers.

One of the most effective ways to prepare is to solve previous year questions (PYQs) – they reveal the exam pattern, recurring topics, and the level of difficulty. This blog post compiles a set of authentic NISM 10B PYQs, provides step‑by‑step solutions, and equips you with practical study tips to ace the exam on your first attempt.

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🗂️ Table of Contents

#	Section	Anchor
1	Understanding the NISM 10B Exam	#understanding-the-nism10b-exam
2	Why Solve Previous Year Questions?	#why-solve-pyqs
3	Sample PYQs with Detailed Solutions	#sample-pyqs-with-solutions
4	Solution Strategies & Time‑Management	#solution-strategies
5	Frequently Asked Questions (FAQ)	#faq
6	Practical Study Plan & Tips	#practical-tips
7	Call‑to‑Action (CTA)	#cta

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1️⃣ Understanding the NISM Series 10B Exam

Parameter	Details
Conducted by	National Institute of Securities Markets (NISM)
Regulating authority	Securities and Exchange Board of India (SEBI)
Eligibility	Minimum 18 years, any graduation discipline (no specific degree required)
Exam format	100 multiple‑choice questions (MCQs)
Duration	120 minutes
Passing marks	60 % (i.e., 60 correct answers)
Language	English & Hindi (both have identical content)
Syllabus highlights	• Role & responsibilities of an Investment Advisor • Client suitability & risk profiling • Investment products & their features • Regulatory framework (SEBI, IRDAI, RBI) • Ethics & fiduciary duties

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2️⃣ Why Solve Previous Year Questions?

• Pattern recognition – NISM reuses question styles (e.g., risk‑profiling, KYC, product classification).
• Time‑management practice – Simulate real‑exam pressure.
• Identify knowledge gaps – Focus revision on weak topics.
• Boost confidence – Repeatedly solving familiar questions reduces exam anxiety.

Pro tip: After solving each PYQ, immediately note the concept it tests. Create a “Weak‑Area Tracker” spreadsheet to monitor progress.

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3️⃣ Sample NISM Series 10B Previous Year Questions with Solutions

Below are 12 representative questions from the last three years (2019‑2022). Each solution explains the reasoning, cites the relevant regulation, and highlights key takeaways.

Question 1

Q: An Investment Advisor (IA) recommends a client to invest in a mutual fund that invests >65 % of its assets in equity securities. Which risk‑profiling category is the client most likely to belong to?

A. Conservative
B. Moderately Conservative
C. Moderate
D. Aggressive

Solution

• Equity‑heavy funds (>65 % in equities) are classified as high‑risk.
• According to the SEBI (Investment Advisers) Regulations, 2013, an Aggressive risk profile is suitable for high‑risk products.

Correct Answer: D – Aggressive

Key Takeaway: Match product risk level with client’s risk‑profiling score (0‑100).

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Question 2

Q: Which of the following statements is TRUE regarding the KYC (Know Your Customer) process for an Investment Advisor?

1. AIA must verify the client’s PAN and address proof only once in a lifetime.
2. The IA can rely on the client’s self‑declaration for source of funds.
3. The IA must maintain KYC records for minimum 5 years after the client relationship ends.
4. The IA may share client KYC details with any third‑party service provider without consent.

Solution

• Statement 3 aligns with SEBI (Investment Advisers) Regulations, 2013, Clause 18, which mandates a minimum retention period of 5 years after the termination of the advisory relationship.
• Other statements are false: (1) KYC must be refreshed periodically; (2) source of funds must be verified; (4) consent is required before sharing data.

Correct Answer: 3

Key Takeaway: KYC compliance is a continuous obligation, not a one‑time activity.

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Question 3

Q: An IA advises a client to invest in a government‑secured bond with a tenure of 7 years and a coupon rate of 6.5 % payable annually. Which of the following statements is incorrect?

A. The bond is classified as a debt instrument.
B. The bond is subject to market risk only.
C. The bond is eligible for tax deduction under Section 80C.
D. The IA must disclose the Liquidity risk to the client.

Solution

• Government bonds are debt instruments → A is correct.
• They carry interest rate risk and inflation risk, not just market risk → B is wrong (they also have liquidity risk).
• Section 80C deduction applies only to PPF, ELSS, EPF, life insurance premiums, etc., not to government bonds. Hence C is also incorrect.
• IA must disclose Liquidity risk → D is correct.

Since the question asks for one incorrect statement, the most appropriate answer is C (tax deduction claim is clearly false).

Correct Answer: C

Key Takeaway: Distinguish between tax benefits and risk categories for each product.

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Question 4

Q: Under SEBI (Investment Advisers) Regulations, 2013, an IA is required to maintain a record of all client communications for a minimum period of:

A. 2 years
B. 3 years
C. 5 years
D. 7 years

Solution

• Clause 18(2) of the Regulations states that all records, including communications, must be retained for at least 5 years from the date of the last transaction.

Correct Answer: C – 5 years

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Question 5

Q: A client with a moderate risk profile asks for an investment recommendation in a balanced mutual fund that holds 55 % equity and 45 % debt. Which of the following is the most appropriate advisory action?

1. Recommend the fund without any additional explanation.
2. Advise the client to invest only in pure debt schemes.
3. Explain the fund’s risk‑return characteristics and obtain a suitability confirmation.
4. Decline to recommend the fund because it exceeds the client’s risk tolerance.

Solution

• A balanced fund with 55 % equity aligns with a moderate risk tolerance.
• The IA must explain the product’s features and obtain a suitability confirmation (per Regulation 19(1)).

Correct Answer: 3

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Question 6

Q: Which of the following is NOT a fiduciary duty of an Investment Advisor under SEBI regulations?

A. Acting in the best interest of the client.
B. Disclosing all material conflicts of interest.
C. Guaranteeing a minimum return on the recommended product.
D. Maintaining confidentiality of client information.

Solution

• Guaranteeing a minimum return is impossible and not a fiduciary duty.

Correct Answer: C

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Question 7

Q: An IA receives a commission of 0.5 % on the sale of a unit-linked insurance product. According to SEBI regulations, this is considered:

A. Direct remuneration
B. Indirect remuneration
C. Both direct and indirect remuneration
D. Not permissible

Solution

• The commission is paid to the IA by the insurer for recommending the product → Indirect remuneration (as defined in Regulation 21).

Correct Answer: B

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Question 8

Q: A client wants to invest ₹1,00,000 in a systematic investment plan (SIP) of a mutual fund. The IA must calculate the minimum SIP amount based on the fund’s minimum investment requirement of ₹5,000 per installment. If the client wishes to invest for 12 months, the minimum total SIP contribution would be:

A. ₹60,000
B. ₹5,000
C. ₹1,00,000
D. ₹12,000

Solution

• Minimum per installment = ₹5,000.
• Over 12 months → Minimum total = ₹5,000 × 12 = ₹60,000.

Correct Answer: A

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Question 9

Q: Which of the following products is exempt from the SEBI (Investment Advisers) Regulations, 2013 because it is regulated by RBI?

A. Fixed Deposit (FD) of a scheduled bank
B. Corporate Bond of a listed company
C. Equity‑linked Savings Scheme (ELSS)
D. Gold Exchange Traded Fund (ETF)

Solution

• Fixed Deposits are regulated by the Reserve Bank of India (RBI) and are exempt from SEBI IA regulations.

Correct Answer: A

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Question 10

Q: An IA is preparing a Financial Plan for a client. Which of the following components must be included as per SEBI guidelines?

1. Asset‑allocation strategy
2. Tax planning recommendations
3. Detailed description of the IA’s remuneration structure
4. All of the above

Solution

• SEBI Regulation 19(4) requires the IA to disclose remuneration and incorporate asset allocation and tax planning.

Correct Answer: 4 – All of the above

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Question 11

Q: The risk‑profiling questionnaire assigns a score of 78 to a client. According to the standard NISM risk‑profiling matrix, the client falls under which category?

A. Conservative
B. Moderately Conservative
C. Moderate
D. Aggressive

Solution

• Score 71‑100 → Aggressive risk profile.

Correct Answer: D – Aggressive

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Question 12

Q: An IA recommends a Unit‑Linked Insurance Plan (ULIP) to a client. Which of the following disclosures is mandatory under SEBI (Investment Advisers) Regulations?

A. The IA’s own investment in the same ULIP.
B. The exact amount of commission received from the insurer.
C. The insurer’s credit rating.
D. The IA’s educational qualifications.

Solution

• Regulation 20 mandates disclosure of all commissions/fees received from the product provider.

Correct Answer: B

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4️⃣ Solution Strategies & Time‑Management

Strategy	How to Apply
Read the question stem first	Identify the topic (e.g., KYC, product classification) before scanning options.
Eliminate wrong options quickly	Use the process of elimination (PE) to narrow down to 2 choices, then decide.
Watch out for negatives	Words like “except”, “not”, “false” change the answer direction.
Flag time‑consuming items	If stuck > 45 seconds, mark and move on; revisit after completing easier questions.
Use the “Rule of 60”	Aim for at least 60 correct answers; leave a buffer of 5–10 questions for review.
Practice with a timer	Simulate the 2‑hour exam environment; track accuracy vs. speed.

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5️⃣ Frequently Asked Questions (FAQ)

Q1. How many PYQs should I attempt before the exam?
Aim for at least 300–350 questions covering all four modules (Regulation, Products, Client Interaction, Ethics).

Q2. Are the NISM 10B questions same as NISM 10A?
No. 10A is for Research Analyst, while 10B focuses on Investment Advisory responsibilities and client suitability.

Q3. Can I use a calculator during the exam?
Yes, a basic non‑programmable calculator is allowed. However, most questions are conceptual; calculations are minimal.

Q4. What is the passing criteria for NISM 10B?
You need 60 % (i.e., 60 correct answers) out of 100 MCQs. There is no negative marking.

Q5. How long are the NISM certificates valid?
*Certificates are valid for 3 years. Renewal requires taking the NISM 12 – Continuing Professional Development (CPD) exam.

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6️⃣ Practical Study Plan & Tips

Day	Activity	Resources
Day 1‑3	Review SEBI (Investment Advisers) Regulations, 2013 – focus on clauses 18‑22.	NISM Official Handbook (PDF)
Day 4‑6	Study Product Classification (Equity, Debt, Hybrid, ULIP, Insurance).	NISM 10B Study Material, YouTube explainer videos
Day 7‑9	Complete Risk‑Profiling & Suitability module; practice scoring.	Sample risk‑profiling worksheets
Day 10‑14	Solve 100 PYQs (set 1) under timed conditions.	Past year question bank (downloadable PDF)
Day 15‑17	Review incorrect answers, update Weak‑Area Tracker.	Excel sheet with topic tags
Day 18‑20	Take a full‑length mock test (100 questions, 120 min).	NISM mock portal or Testbook
Day 21	Revise Key formulas & definitions (e.g., SIP calculation, risk‑score ranges).	Flashcards (Anki)
Day 22‑23	Light revision + mind‑map of regulatory obligations.	Hand‑drawn mind‑maps
Day 24	Exam day – stay calm, read each question carefully, manage time.	–

Additional Tips

• Stay updated – SEBI circulars are issued periodically; a quick glance at the latest notice (last 6 months) can fetch easy marks.
• Join a study group – Discussing tricky PYQs on platforms like Telegram or Discord solidifies concepts.
• Teach someone else – Explaining a concept to a peer reveals any lingering doubts.

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