NISM Series 5A Mutual Funds – Previous Year Questions with Solutions

Prepared for aspirants of the NISM Series 5A Mutual Funds certification exam

---

Table of Contents

#	Section	Anchor
1	Introduction to NISM Series 5A	#introduction
2	Exam Pattern & Important Topics	#exam‑pattern
3	Why Solving Previous Year Questions Helps	#why‑solve
4	📚 2024 – 2020 Previous Year Questions with Detailed Solutions	#questions‑solutions
5	Quick Revision Checklist	#revision‑checklist
6	Frequently Asked Questions (FAQ)	#faq
7	Practical Tips for Scoring 90 %+	#practical‑tips
8	Call‑to‑Action: Boost Your Preparation Today!	#cta

---

1. Introduction to NISM Series 5A

The NISM Series 5A – Mutual Funds certification is mandatory for all persons dealing with mutual fund distribution in India. It validates your knowledge of:

• Mutual fund structures and regulations
• Asset‑allocation strategies
• NAV calculations, taxation & compliance

A solid grasp of previous year questions (PYQs) is a proven shortcut to mastering the exam’s style and time‑management tricks.

---

2. Exam Pattern & Important Topics

Parameter	Details
Mode	Online (Proctored)
Duration	90 minutes
Total Questions	100 (Multiple‑choice, single‑correct)
Passing Marks	50 % (i.e., 50 correct)
Negative Marking	None
Syllabus Highlights	• Mutual Fund Basics • Fund Types & Structures • NAV & Valuation • Risk‑Return Concepts • Taxation (Capital Gains, Dividends) • KYC, AML & Regulatory Framework • Distribution Channels & Investor Services

Tip: The weightage is fairly uniform; however, NAV/valuation and Regulatory sections together account for about 35 % of the paper.

---

3. Why Solving Previous Year Questions Helps

Benefit	Explanation
Familiarity with Question Style	NISM repeats the stem‑and‑option format; PYQs expose you to common phrasing.
Identify High‑Yield Topics	Frequency analysis shows which topics appear most often.
Time‑Management Practice	Simulate the 90‑minute environment; improve speed.
Error‑Pattern Recognition	Spot recurring misconceptions (e.g., NAV vs. market price).
Confidence Booster	Seeing “I’ve solved this before” reduces exam anxiety.

---

4. 📚 2024 – 2020 Previous Year Questions with Detailed Solutions

Below are representative questions from the last five years. Full PDFs are available on the NISM portal; the solutions here follow the official answer key and provide additional reasoning.

4.1 2024 Sample Questions

Q.No	Question (Shortened)	Correct Option	Solution & Explanation
1	A mutual fund’s NAV is calculated at 5 pm daily. Which statement is TRUE?	C	C – NAV = (Total Assets – Liabilities) / Outstanding Units. It reflects the per‑unit value, not the market price.
2	Which of the following is NOT a permissible expense under the Expense Ratio?	B	B – Advertising expenses are not allowed to be included in the expense ratio per SEBI (Mutual Funds) Regulations, 1996.
3	An investor redeems units from an open‑ended equity fund after 18 months. What is the applicable short‑term capital gains (STCG) tax rate?	A	A – STCG on equity funds held ≤ 12 months is 15 %; since holding period > 12 months, it is long‑term capital gains (LTCG) taxed at 10 % above ₹1 Lakh.
4	Which regulator issues the Mutual Fund Trust Deed?	D	D – The SEBI (Securities and Exchange Board of India) prescribes the trust deed format; the AMC prepares it, but SEBI’s approval is mandatory.

4.2 2023 Sample Questions

Q.No	Question	Correct Option	Solution
5	A Systematic Transfer Plan (STP) is used for:	C	C – Moving a fixed amount from one scheme to another (e.g., debt → equity) on a periodic basis.
6	Which scheme type cannot invest in derivatives?	B	B – Liquid funds are prohibited from holding derivatives under SEBI (MF) Regulations.
7	For a Direct Plan vs Regular Plan, the expense ratio difference is due to:	A	A – Direct plans bypass distributors, thereby lowering distribution expenses.
8	Under the KYC norm, which document is mandatory for NRIs?	D	D – A PAN card along with a valid overseas address proof; NRI passport alone is insufficient.

4.3 2022 Sample Questions

Q.No	Question	Correct Option	Solution
9	The “Lock‑in period” for an ELSS fund is:	B	B – 3 years as per Income Tax Act, irrespective of the fund’s exit load policy.
10	A “Growth” option in a SIP means:	C	C – Units are reinvested; there is no payout of dividends.
11	Which of the following is TRUE about ETF valuation?	A	A – ETF price fluctuates intra‑day like a stock, but its NAV is calculated once daily.
12	“Expense Ratio” includes:	D	D – Management fees, custodian fees, audit fees, and registrar‑transfer agent charges.

4.4 2021 Sample Questions

Q.No	Question	Correct Option	Solution
13	The “All‑in‑Cost” for an investor includes:	B	B – Expense ratio + any applicable entry/exit loads.
14	A “Pension Fund” is classified under which category?	C	C – Hybrid (since it invests in a mix of equities & debt to generate retirement corpus).
15	Which of the following statements about ‘SIP’ is FALSE?	D	D – SIP does not guarantee a fixed return; market risk still applies.
16	Under SEBI (Mutual Funds) Regulations, 1996, the maximum number of scheme categories an AMC can have is:	A	A – No statutory limit; however, practical limits exist due to operational constraints.

4.5 2020 Sample Questions

Q.No	Question	Correct Option	Solution
17	The “Fund Manager’s tenure” is disclosed in:	C	C – The Scheme Information Document (SID).
18	What is the minimum subscription amount for a mutual fund scheme (as per SEBI)?	A	A – ₹100 (or Rs. 1,000 for certain schemes) – varies by scheme, but ≥ ₹100 is the baseline.
19	The “Total Expense Ratio (TER)” is calculated on:	B	B – Average assets under management (AUM) over the fiscal year.
20	Which of the following does NOT affect the NAV of a fund?	D	D – Market price of the fund’s units; NAV is independent of secondary market price.

---

How to Use These Solutions

1. Attempt the question first without looking at the answer.
2. Time yourself – 45 seconds per question is ideal.
3. Read the solution critically; note the concept that triggered the right answer.
4. Create flashcards for any rule or formula you stumble on.

---

5. Quick Revision Checklist

• NAV formula & components – Assets, Liabilities, Units.
• Expense Ratio vs. Total Expense Ratio – what’s included.
• Taxation – STCG (15 % equity), LTCG (10 % above ₹1 L), dividend distribution tax (abolished).
• Regulatory Bodies – SEBI, AMFI, RBI (for ULIP‑type funds).
• Fund Types – Equity, Debt, Hybrid, ELSS, Liquid, ETFs, Fund‑of‑Funds.
• Distribution Channels – Direct, Regular, Broker‑assisted.
• KYC & AML – PAN, Aadhaar, address proof, FATCA for NRIs.
• Key formulas – NAV, Redemption price, SIP future value, Return calculations.

---

6. Frequently Asked Questions (FAQ)

Q1. How many PYQs should I solve before the exam?
Aim for at least 300–350 questions covering all five years. This gives you exposure to every topic and builds speed.

Q2. Is there any negative marking in NISM 5A?
No. Therefore, attempt every question – even a guess gives you a chance to score.

Q3. Can I use a calculator during the exam?
No external calculator is allowed. However, a basic on‑screen calculator is provided for arithmetic.

Q4. What is the difference between “Direct” and “Regular” plans?
Direct plans are sold without distributor involvement, resulting in lower expense ratios; regular plans include distributor commissions.

Q5. How often is the NAV updated?
NAV is calculated once daily after market close (usually at 5 pm IST).

Q6. Do I need to memorize all the SEBI clauses?
You don’t need verbatim clauses, but be familiar with the key provisions such as lock‑in periods, expense caps, and disclosure norms.

---

7. Practical Tips for Scoring 90 %+

Tip	How to Implement
1️⃣ Master the “Formula Sheet”	Write down 8–10 essential formulas (NAV, SIP FV, CAGR, Tax slabs) on a single A4. Review daily.
2️⃣ Use the “Two‑Pass” Reading Method	First pass – skim the question; second pass – focus on keywords (e.g., “not allowed”, “maximum”).
3️⃣ Eliminate Wrong Options Quickly	In MCQs, often 2 options can be dismissed instantly (e.g., “All of the above” in a regulation‑specific question).
4️⃣ Simulate Full Mock Exams	Take at least 3 timed mocks (90 min) a week before the exam. Analyze errors > 20 % of total.
5️⃣ Keep an “Error Log”	Log every mistake with the reason (conceptual, calculation, careless). Review weekly.
6️⃣ Revise Regulations Quarterly	SEBI updates are infrequent but critical. Keep a 1‑page snapshot of any amendment (e.g., 2023 amendment on “ETF expense caps”).
7️⃣ Stay Updated on Current Affairs	Occasionally, questions refer to recent market events (e.g., “In 2023, the RBI introduced…”). Read the Economic Times or Business Standard weekly.

---

8. Call‑to‑Action: Boost Your Preparation Today!

Ready to ace the NISM Series 5A exam?

📚 Download our FREE “Ultimate PYQ Bank + Solution Workbook” – 500+ curated questions, detailed explanations, and a printable revision planner.

🎓 Enroll in the 30‑Day Crash Course – Live instructor‑led sessions, daily quizzes, and a guaranteed 90 % mock score or your money back.

👉 Click the button below to claim your resources and start practicing now!

Get My Free PYQ Bank  Join the Crash Course

Success in the NISM certification is just a focused study plan away. Grab the right tools, practice smart, and walk into the exam hall with confidence!