Aumsetu
← Mock Test
Aumsetu
← Mock Test
For the Investment Adviser (Level 1) exam, per the official workbook (Version September 2026). Every formula below is one the workbook teaches, grouped by module and chapter, with a small worked example — most of them the workbook’s own figures, re-checked. Learn them here, read the chapter notes, then drill the free mock tests.
| Module | Chapters | Marks |
|---|---|---|
| 1 · Personal Financial Planning व्यक्तिगत वित्तीय योजना | 1–4 | 37 |
| 2 · Indian Financial Markets भारतीय वित्तीय बाज़ार | 5–6 | 10 |
| 3 · Investment Products निवेश उत्पाद | 7–10 | 30 |
| 4 · Investment Through Managed Portfolio प्रबंधित पोर्टफोलियो | 11–13 | 23 |
| 5 · Portfolio Construction, Performance Monitoring & Evaluation पोर्टफोलियो निर्माण व मूल्यांकन | 14–16 | 20 |
| 6 · Operations, Regulatory Environment, Compliance & Ethics संचालन, विनियमन, अनुपालन व नैतिकता | 17–20 | 30 |
| Future value | FV = PV × (1 + r)^n — r and n per compounding period (8% p.a. compounded quarterly ⇒ r = 2%, n = 4 × years)
₹5,00,000 for 5 yrs at 8%: simple interest ₹2,00,000 · annual compounding ₹7,34,664 · quarterly ₹7,42,974 (more frequent compounding ⇒ more) |
| Present value | PV = FV ÷ (1 + r)^n — higher rate or later cash flow ⇒ lower PV
₹50,000 due in 5 yrs at 6% = ₹37,362.91 · ₹1,000 due in 3 yrs = ₹864 at 5%, ₹794 at 8% |
| PV of regular cash flow (ordinary annuity) | PV = C × [1 − 1 ÷ (1 + r)^n] ÷ r — paid at period end; Excel PV(rate, nper, pmt), type 0
₹6,500 a year for 8 yrs at 7% = ₹38,813.44 · ₹5,000 × 4 yrs at 10% = ₹15,849.33 · annuity factor (10 yrs, 5%) 7.7217 ⇒ ₹12,000 × 7.7217 = ₹92,660 |
| Annuity due | Paid at the start of each period ⇒ Excel type = 1 — always worth more than the ordinary annuity ₹5,000 × 4 yrs at 10%, paid in advance = ₹17,434.26 (check: 15,849.33 × 1.10) |
| Perpetuity | PV = C ÷ r — e.g. a perpetual bond
₹10,000 a year forever at 8% = ₹1,25,000 |
| CAGR | CAGR = (End value ÷ Beginning value)^(1/n) − 1; Excel RATE(n,,−PV,FV); for days use ^(365/days)
₹100 → ₹120 in 2 yrs = 9.54% · NAV 10.50 → 12.25 in 3 yrs = 5.27% · NAV 11 → 13.50 in 450 days = 18.07% |
| EMI (PMT) | EMI = Loan × r ÷ [1 − (1 + r)^−n] (the annuity formula solved for C); Excel PMT(rate/12, months, −loan)
₹30 lakh, 20 yrs (240 months), 6.5% = ₹22,367.19; if the rate falls to 6.25% = ₹21,927.85 |
| Loan tenure (NPER) | Excel NPER(rate/12, −EMI, loan) = number of instalments needed
₹5 lakh loan, EMI ₹12,000, 8% ⇒ 48.97 months |
| Annuity types | Fixed annuity (fixed payments, e.g. a 5.5% FD) vs floating annuity (linked to inflation or an index) |
The X-A workbook does not teach the Rule of 72 or a real-rate (Fisher) formula — it treats inflation qualitatively (fixed-rate bonds lose real return; inflation-indexed bonds protect it).
| Ratio | Formula · benchmark · worked example |
|---|---|
| Savings ratio | Savings per year ÷ Annual income — savings include PF contributions (employer + employee) and all investments
₹60,000 ÷ ₹6,00,000 = 10% · XYZ: (9,000 + 200 + 500 + 500 − 7,000) ÷ 10,200 = 3,200 ÷ 10,200 = 31.4% |
| Budget savings | Savings = PF contribution + Investments + Monthly surplus in hand; surplus in hand = income − (expenses + investments)
ABC family: 9,000 + 18,000 + 7,000 = ₹34,000 ⇒ savings ratio 34,000 ÷ 1,37,000 = 24.8% |
| Expenses ratio | Annual recurring expenses ÷ Annual income = 1 − Savings ratio — one-off costs excluded; periodic ones annualised
₹5,40,000 ÷ ₹6,00,000 = 90% · a ₹6 lakh holiday every 3 yrs counts as ₹2 lakh a year |
| Savings-to-income | Total accumulated savings ÷ Annual income — self-occupied home excluded; aim for ≥ 3× by the early 40s
₹15 lakh ÷ ₹12 lakh = 1.25 |
| Net worth | Total assets − Total liabilities — monitor over time
₹65 lakh − ₹13 lakh = ₹52 lakh · Lakshmi: 36,22,000 − 12,07,000 = ₹24,15,000 |
| Leverage ratio | Total liabilities ÷ Total assets — higher = riskier; above 1 ⇒ assets cannot cover liabilities
₹13 lakh ÷ ₹65 lakh = 20% |
| Solvency ratio | Net worth ÷ Total assets = 1 − Leverage ratio — net worth must be positive
₹52 lakh ÷ ₹65 lakh = 80% |
| Liquidity ratio | Liquid assets ÷ Monthly expenses (incl. loan EMIs) — 4 to 6 is comfortable. Liquid: savings bank, FDs maturing within 6 months, liquid funds. Shares excluded
NFG: (7 + 2 + 4) lakh ÷ 1.5 lakh = 8.67 (the workbook truncates to 8.66) |
| Liquid assets to net worth | Liquid assets ÷ Net worth — low when goals are far away, higher when goals are near |
| Financial assets ratio | Financial assets ÷ Total assets — higher preferred as goals approach
PQR: ₹27 lakh ÷ ₹50 lakh = 54% |
| Debt-to-income | Monthly debt servicing (principal + interest) ÷ Monthly income — above 35–40% is excessive
₹60,000 ÷ ₹1,50,000 = 40% |
| Emergency fund | Six months’ expenses (including EMIs) in liquid assets; can be laddered — about 3 months liquid, the rest in less liquid but better-yielding assets; review yearly ABC family: (79,000 + 12,000) × 6 = ₹5,46,000 |
| Debt servicing ratio | EMIs ÷ Monthly income — cut it by a longer tenor, a lower rate or a smaller loan
₹7,500 ÷ ₹15,000 = 50% (too high) · ₹2,224.44 ÷ ₹10,000 = 22.24%; 6-yr tenor ⇒ 19.55%; plus a ₹1,000 EMI elsewhere ⇒ 29.55% |
| Annual cost of a monthly rate | (1 + monthly rate)^12 − 1
Credit card revolving credit at 3% a month ⇒ 42.6% a year |
| “Rest” vs payment cycle | Annual rest: work out the annual instalment, then divide by 12 (or 4) — the borrower gets no credit for payments within the year, so the effective cost is higher Annual instalment ₹27,740.97 ⇒ ₹2,311.75 a month for 60 months; at 1% a month (monthly rest) the EMI is ₹2,224.44 (these correspond to a ₹1 lakh loan at 12% for 5 yrs) |
| Interest / principal split | Excel IPMT (interest) and PPMT (principal); first-month interest = loan × monthly rate. Early EMIs are mostly interest
₹10 lakh, 10 yrs, monthly rest: 7% ⇒ EMI 11,610 = 5,833 interest + 5,777 principal · 5% ⇒ 10,606 = 4,166 + 6,440 · 9% ⇒ 12,667 = 7,500 + 5,167 |
| Restructuring | New EMI = PMT on the new terms; compare deals by the present value of the payments ₹3 lakh at 7%: 36 months ⇒ ₹9,263; stretched to 60 months ⇒ ₹5,940; haircut to ₹2 lakh over 36 months ⇒ ₹6,175 |
| Repaying faster | Avalanche = highest rate first · Snowball = smallest balance first · Blizzard = snowball first, then avalanche Card ₹30,000 @42%, personal loan ₹1.2 lakh @21%, car ₹1 lakh @12%, home ₹15 lakh @8%: avalanche ⇒ card → personal → car → home; blizzard ⇒ card (smallest) → personal (highest rate) → car → home |
| Invest or prepay? | Compare the loan rate with the expected (risk-adjusted) return — expensive card or personal-loan debt first; e.g. 12% expected equity return vs a 7% loan favours investing, with risk borne in mind |
| Market capitalisation | Shares outstanding × Market price; market cap ÷ GDP sizes a country’s market |
| Turnover ratio | Turnover (₹) ÷ Market capitalisation — higher = more liquid |
| Book-building cut-off | Highest price at which cumulative demand fills the issue; price band = floor price to floor + 20%; retail discount ≤ 10%; minimum application ₹10,000–15,000 5,000 shares, band ₹120–144: demand 1,000 @144, 2,500 @140, 5,000 @135 ⇒ cut-off ₹135 |
| Margin | Margin % × Trade value, paid upfront by buyer and seller
100 shares × ₹100 at 17% ⇒ ₹1,700 |
| Circuit breakers / bands | Market-wide halt at 10%, 15%, 20% index moves (Sensex or Nifty 50, whichever first) · stock bands 2%, 5%, 10% (20% for the rest); F&O stocks have no band but a 10% operating range |
| Split / bonus / rights | Split 1:5 ⇒ 5× shares at ⅕ face value, value unchanged · bonus 1:3 ⇒ 1 free share per 3 held · rights 1:1 doubles capital, proportions unchanged 100 shares (FV ₹10) at ₹1,000 ⇒ 500 shares (FV ₹2) at about ₹200 — still ₹1,00,000 |
| EPS · P/E | EPS = PAT ÷ Shares outstanding · P/E = Price ÷ EPS — trailing uses the last 4 quarters’ EPS, forward the next 4 estimated; below market/industry P/E ⇒ undervalued
₹100 ÷ ₹5 = 20× · target 18 vs industry 22 ⇒ undervalued |
| Earnings yield | EPS ÷ Price × 100 — the inverse of P/E
₹2.5 ÷ ₹25 = 10% |
| Dividend yield | Dividend per share ÷ Price × 100
₹2 ÷ ₹40 = 5% |
| P/BV | Price ÷ Book value per share; BVPS = shareholders’ equity (less miscellaneous assets) ÷ shares — favoured for banks and financials
Equity ₹500 cr, 10 cr shares ⇒ BVPS ₹50; price ₹75 ⇒ 1.5× |
| P/S | Market cap ÷ Sales of the last 12 months — useful when earnings are negative or suspect |
| PEG | P/E ÷ Expected EPS growth rate (%), growth usually over 5 years — 1 = fairly valued, < 1 undervalued, > 1 overvalued
P/E 20, growth 25% ⇒ 0.8 (undervalued) |
| EVA · MVA | EVA = After-tax operating profit − (Invested capital × Cost of capital) · MVA = Market value − Capital contributed (positive ⇒ value added)
NOPAT ₹150 cr, capital ₹1,000 cr at 12% ⇒ EVA ₹30 cr |
| Enterprise value | EV = Market cap + Market value of debt − Excess cash; used in EV/EBITDA, EBIT/EV, EV/Sales
₹800 cr + ₹300 cr − ₹100 cr = ₹1,000 cr; EBITDA ₹125 cr ⇒ EV/EBITDA 8× |
| Credit spread | Corporate bond yield − G-sec yield (same maturity) — the risk premium for default risk |
| Impact cost | % price move caused by an order of a given size (e.g. ₹1 lakh) from the average of the best bid and offer — higher ⇒ less liquid |
| Bollinger bands | Price more than 2 standard deviations above its moving average ⇒ overbought; 2 below ⇒ oversold |
| Bond price | Price = Σ Coupon ÷ (1 + y)^t + Face ÷ (1 + y)^n = Coupon × PVIF + Face × DFₙ
10% coupon, 5 yrs, yield 8%: 10 × 3.9927 + 100 × 0.6806 = 107.99 (above par because coupon > yield) |
| Semi-annual coupons | Halve the coupon and the yield, double the periods Same bond: 5 × 8.1109 + 100 × 0.67556 = 108.11 |
| Coupon yield | Coupon ÷ Face value
₹8.24 ÷ ₹100 = 8.24% |
| Current yield | Annual coupon ÷ Market price × 100
₹8.24 ÷ ₹103 = 8.00% |
| Yield to maturity | The discount rate that equates the PV of all cash flows with the price (the bond’s IRR); trial and error or Excel YIELD()
2-yr 8% semi-annual bond at ₹102 ⇒ YTM 6.9121% |
| CR · CY · YTM | At par: CR = CY = YTM · at a discount: CR < CY < YTM · at a premium: CR > CY > YTM |
| Zero-coupon / T-bill | P = 100 ÷ (1 + r × days/365) · YTM = (100 − P) ÷ P × 365 ÷ days × 100
91-day T-bill at ₹98.50 ⇒ (1.50 ÷ 98.50) × (365 ÷ 91) = 6.11% |
| Perpetual bond | Value = Coupon ÷ Yield
8% coupon on ₹100 at a 6% yield ⇒ 8 ÷ 0.06 = ₹133.33 |
| Effective yield | Rate that gives the same year-end amount when interest is paid more often 4.20% paid monthly ⇒ (1 + 0.042/12)^12 − 1 = 4.28% |
| Dirty / clean price | Dirty (invoice) price = Clean price + Accrued interest; bonds trade and yields are quoted on clean price · day count 30/360 for bonds, actual/365 for money market |
| Macaulay duration | Σ (t × PV of cash flow at t) ÷ Price — in years; ≤ maturity; = maturity only for a zero-coupon bond
10% 5-yr bond at 8%: 4.20 years |
| Modified duration | MD = Macaulay duration ÷ (1 + periodic yield) — the % price change for a change in yield (≈ −MD × Δyield)
4.20 ÷ 1.08 = 3.89 ⇒ a 1% rise in yield cuts price by about 3.9% (exact repricing: −3.8%) |
| Yield curve | Normal (upward) · inverted (short > long, signals recession) · flat · humped (medium highest) |
| Price–yield rules | Inverse and non-linear (convexity); longer maturity and lower coupon ⇒ more price-sensitive |
| Futures price | F = S + Cost of carry (carry = market interest on the money for the period)
Spot ₹100, 20-day future ₹120 ⇒ carry of ₹20; if borrowing costs ₹20, there is no arbitrage |
| Basis | Difference between spot and futures prices; the workbook calls it positive when futures trade above spot; it shrinks to zero at expiry (convergence) |
| Cash-and-carry return | (F − S) ÷ S × 365 ÷ days — buy spot, sell futures
Spot ₹3,984, future ₹4,032, 27 days ⇒ (48 ÷ 3,984) × 365 ÷ 27 = 16.29% p.a. |
| Futures pay-off | Long: (Price at close − Futures price) × Qty; short: the reverse — zero-sum before taxes and costs |
| Intrinsic value | Call: Spot − Strike when positive (else 0) · Put: Strike − Spot when positive (else 0); in-the-money options have positive intrinsic value |
| Time value | Premium − Intrinsic value |
| Option pay-off | Buyer: Intrinsic value at expiry − Premium, maximum loss = premium · Writer: maximum gain = premium, loss theoretically unlimited
Call strike ₹100, premium ₹5: spot ₹112 ⇒ buyer +₹7, writer −₹7; spot ₹95 ⇒ buyer −₹5, writer +₹5 |
| Premium margin | Option premium × Quantity bought, paid by option buyers; initial margin (SPAN + ELM) covers losses in 99% of cases |
| Interest rate swap | Pay fixed, receive floating (or vice versa) on a notional principal that is never exchanged — converts a floating loan to fixed |
| NAV | NAV = Net assets ÷ Units outstanding; net assets = portfolio at market value + current assets − expenses/liabilities |
| Units allotted | Units = Amount invested ÷ Price (NAV) — decimals allowed
₹5,000 at ₹10 = 500 units; ₹10,000 = 1,000 units |
| Value of holding | Units × NAV
1,000 units: NAV ₹12 ⇒ ₹12,000; NAV ₹11.11 ⇒ ₹11,110 |
| Transactions at NAV | Buying or redeeming at NAV leaves NAV unchanged; issuing at any other price dilutes everyone Net assets ₹1,00,000, 9,000 units (NAV 11.11); 1,000 units sold at ₹10 ⇒ ₹1,10,000 ÷ 10,000 = NAV ₹11.00 |
| Redemption with exit load | Redemption is at the applicable NAV adjusted for exit load: Proceeds = Units × NAV × (1 − exit load)
1,000 units, NAV ₹50, 1% load ⇒ ₹49,500 · life-cycle funds: 3% / 2% / 1% within years 1 / 2 / 3 |
| IDCW | NAV falls by the amount paid out; the payout may include part of the investor’s own capital |
| SIP (rupee-cost averaging) | Same amount each time ⇒ more units when NAV is low; average cost per unit falls ₹1,000 at NAV ₹10 + ₹1,000 at ₹20 = 150 units ⇒ average cost ₹13.33 (below the ₹15 average NAV) |
| Value averaging | Instalment = Base amount + (Target value − Actual value)
₹10,000 a month, 1% target growth ⇒ target ₹10,100; actual ₹9,900 ⇒ invest ₹10,200; actual ₹10,400 ⇒ invest ₹9,700 |
| Instant access (liquid funds) | Lower of ₹50,000 or 90% of the holding, per day per scheme per investor (resident individuals) |
| Direct vs regular | Same portfolio; the direct plan has a lower expense ratio, so a higher net return |
| High-water mark | Profit share only on value above the highest level on which fees were last paid ₹50 lakh → ₹60 lakh: fee base ₹10 lakh; next year ₹55 lakh ⇒ no profit share until it crosses ₹60 lakh |
| Hurdle rate | No profit share until returns exceed the hurdle (e.g. 8%) |
| Catch-up / no catch-up | No catch-up: fee only on the return above the hurdle · catch-up: once the hurdle is crossed, fee on the whole return |
| AIF sponsor stake | Lower of 2.5% of corpus or ₹5 crore (Category III: lower of 5% or ₹10 crore)
Corpus ₹500 crore: 2.5% = ₹12.5 cr ⇒ ₹5 cr; Category III: 5% = ₹25 cr ⇒ ₹10 cr |
| Expected return | E(R) = Σ Probability × Return
A: 0.3×15% + 0.5×10% + 0.2×2% = 9.9% · B: 0.3×25% + 0.5×20% + 0.2×1% = 17.7% |
| Variance · SD | Variance = Σ (X − X̄)² ÷ (n − 1) · SD = √Variance
Returns 10%, 20%, 30%: mean 20, variance (100 + 0 + 100) ÷ 2 = 100, SD 10% |
| Portfolio return | Σ wᵢ × Rᵢ
0.2×9% + 0.1×12% + 0.3×15% + 0.4×18% = 14.7% |
| Two-asset variance | σp² = w₁²σ₁² + w₂²σ₂² + 2·w₁·w₂·ρ₁₂·σ₁·σ₂; covariance = ρ × σ₁ × σ₂
50:50, σ 5% each, ρ 0.5 ⇒ σp² = 0.001875, σp = 4.33% (less than 5%: diversification) |
| Covariance terms | (n² − n) ÷ 2
3 assets ⇒ 3 · 50 assets ⇒ 1,225 |
| Correlation | From −1 to +1; at +1 the portfolio SD is just the weighted average SD — no diversification benefit |
| Investor types | Risk-averse rejects a fair game · risk-neutral judges only expected return · risk-seeking accepts a fair game · CER = the risk-free rate equally attractive as the risky portfolio |
| Holding-period return | HPR = (E − B) ÷ B; with income (I + E − B) ÷ B
₹1,00,000 → ₹1,20,000 = 20%; with ₹5,000 dividend and interest = 25% |
| TWRR | Chain-link sub-period returns: [(1 + r₁)(1 + r₂)…(1 + rₙ)]^(1/years) − 1 — ignores the timing of cash flows; required for discretionary PMS disclosure (preceding 3 years)
−5%, −15.2%, 8.1%, 30.75%, 17.65% ⇒ wealth relative 1.3396 ⇒ 6.02% a year |
| MWRR | The IRR of all contributions and the final value — depends on the timing of cash flows ₹5k, 10k, 15k, 20k, 25k invested at the start of each year, worth ₹1,05,920.31 at the end ⇒ 15.15% |
| Arithmetic vs geometric mean | AMR = Σr ÷ n · GMR = [(1 + r₁)…(1 + rₙ)]^(1/n) − 1; GMR < AMR unless all returns are equal
−50% then +100%: AMR 25%, GMR 0% · 10% and 10%: both 10% |
| CAGR / annualised | (A ÷ P)^(1/t) − 1
₹1,00,000 → ₹1,33,960 in 5 yrs = 6.02% · 15.5%, 9.5%, −6.9% ⇒ 117.75 ⇒ 5.60% a year |
| Gross vs net return | (Gross or Net value − Capital) ÷ Capital; net is after expenses, management fee, performance fee and exit load
₹1 crore → ₹1.20 crore gross (20%); less 60,000 + 1,65,000 + 1,55,000 + 2,32,400 = ₹6,12,400 ⇒ ₹1,13,87,600 net (13.88%) |
| Pre-tax ↔ post-tax | Post-tax = Pre-tax × (1 − t) · Pre-tax = Post-tax ÷ (1 − t)
5% at 15% tax ⇒ 4.25% |
| Cash-drag adjusted | Return on the whole capital, including uninvested cash ₹75 lakh in equity at 10% + ₹25 lakh in liquid funds at 4% = ₹8.5 lakh ⇒ 8.5% (not 10%) |
| Foreign-currency return | Convert at the start rate, apply the fund return, convert back at the end rate ₹50 lakh at ₹70/$ = $71,428.57; +15% = $82,142.86; at ₹65/$ = ₹53,39,286 ⇒ 6.79% in rupees |
| Portfolio beta | βp = Σ wᵢ × βᵢ; β > 1 more volatile than the index, < 1 less
0.60 × 1.2 + 0.40 × 1.1 = 1.16 |
| CAPM | Required return = Rf + β × (Rm − Rf) — only market (systematic) risk is priced |
| Jensen’s alpha | α = Rp − [Rf + β × (Rm − Rf)]; “alpha” is also loosely used for Rp − benchmark
Rp 25%, Rm 15%, β 1.5, Rf 5%: beta return 15%, α = 25 − 20 = 5% (excess over benchmark = 10%) |
| Sharpe ratio | (Rp − Rf) ÷ σp — reward to total risk; suits an investor who is not well diversified
(10.50% − 5.50%) ÷ 6.50% = 0.77 |
| Treynor ratio | (Rp − Rf) ÷ βp — reward to systematic risk; suits a well-diversified investor
(10.50% − 5.50%) ÷ 1 = 0.05 |
| Sortino ratio | (Rp − Rf) ÷ Semi-standard deviation — penalises downside only |
| Information ratio | (Rp − Rb) ÷ SD(Rp − Rb) = active return ÷ active risk (tracking error) |
| Tracking error · difference | Tracking error = SD of (portfolio − benchmark) returns, measured against the Total Return Index · tracking difference = simple point-to-point gap |
| M² (Modigliani) | Lever or de-lever the portfolio to the market’s SD: w = σm ÷ σp; Rp* = w × Rp + (1 − w) × Rf; compare Rp* with Rm
Rp 35%, σp 42%, Rm 28%, σm 30%, Rf 6%: w = 0.714 ⇒ Rp* = 26.7% < 28% ⇒ underperformed by 1.3% |
| Fama net selectivity | (Rp − Rf) − [(Rm − Rf) ÷ σm] × σp — excess return not explained by the market premium for the portfolio’s total risk
Same data: (35 − 6) − (22 ÷ 30) × 42 = 29 − 30.8 = −1.8% |
| Sharpe vs Treynor | Identical rankings for fully diversified portfolios; any difference in ranking reflects differences in diversification |
| Individual → non-individual | More than 300 clients or fees above ₹3 crore in a financial year, whichever is earlier; in-principle registration valid 3 months |
| Part-time IA | At most 75 clients; must use “part-time investment adviser” in all correspondence |
| Own-account trades | No trade contrary to advice for 15 days; earlier only after giving the client a revised view 24 hours in advance |
| Fees | Advance fee for at most 1 year; on early termination, refund for the unexpired period with breakage fee of at most one quarter’s fee; no cash; fee rules apply to individual and HUF clients (not accredited investors) |
| Records · audit | KYC, risk profile, suitability, agreements, advice and rationale, client register, communications — kept 5 years (digitally signed if electronic) · yearly compliance audit · complaint data on the website by the 7th of the next month |
| Qualification | IA / principal officer: finance-related graduate degree or professional qualification, PG diploma of at least 2 years, NISM PG programme (Investment Advisory) of at least 1 year, or CFA charter · persons associated with advice: any graduate · NISM certification renewed before it lapses |
| Segregation | An individual IA cannot distribute; a non-individual IA segregates advisory and distribution clients at group level; implementation only through direct plans, with no commission or implementation fee |
| Penalty (Sec 15EB) | Not less than ₹1 lakh, up to ₹1 lakh per day of default, maximum ₹1 crore |
| IAASB eligibility | Parent exchange: 15 years old, net worth ₹200 crore, nationwide terminals, investor service centres in 20 cities — BSE Administration & Supervision Ltd is recognised |
| PMLA | Transaction records and identity records kept 5 years (identity records: 5 years after the relationship ends) |
| PMS | Minimum ₹50 lakh per client · net worth ₹5 crore · principal officer with 5 years’ experience + NISM certification, one more employee with 2 years’ · at most 30% in associates/related parties · no below-investment-grade securities · regulations of 2020 (first issued 1993) |
| AIF | Minimum ₹1 crore (₹25 lakh for employees/directors of the AIF or manager; accredited investors ₹25 lakh where adopted) · scheme corpus ≥ ₹20 crore · at most 1,000 investors · Category I/II ≤ 25% in one investee, Category III ≤ 10% · associates need 75% of investors by value · listed units in lots of ₹1 crore |
| Accredited investor | Individual/HUF/family trust: income ≥ ₹2 crore, or net worth ≥ ₹7.5 crore (≥ ₹3.75 crore financial), or income ≥ ₹1 crore + net worth ≥ ₹5 crore (≥ ₹2.5 crore financial) · trusts and body corporates ≥ ₹50 crore · angel investor: ₹2 crore net tangible assets (body corporate ₹10 crore) |
| SIF · LRS | Specialized Investment Fund minimum ₹10 lakh · LRS: USD 2,50,000 per financial year |
| Equity schemes | Large cap (top 100) ≥ 80% · mid cap (101–250) ≥ 65% · small cap (251+) ≥ 65% · large & mid ≥ 35% + 35% · multi cap ≥ 75% equity with ≥ 25% each in large, mid, small · flexi cap ≥ 65% · sectoral/thematic ≥ 80% · value and dividend yield ≥ 65% (an AMC offers a value or a contra fund, not both) · focused ≤ 30 stocks · ELSS ≥ 80%, 3-year lock-in, deduction up to ₹1.5 lakh under section 123 (old section 80C), old regime |
| Debt schemes | Overnight 1 day · liquid < 91 days · ultra short 3–6 months · ultra-short-to-short 6–12 months · money market ≤ 1 year · short 1–3 yrs · medium 3–4 yrs · medium-to-long 4–7 yrs · long > 7 yrs (Macaulay duration) · corporate bond ≥ 80% in AA+ and above · credit risk ≥ 65% in AA and below · banking & PSU, gilt, 10-yr constant maturity ≥ 80% · floater ≥ 65% |
| Hybrid & others | Conservative 10–25% equity · balanced 40–60% · aggressive 65–80% · multi-asset ≥ 10% in each of 3 asset classes · equity savings ≥ 65% equity + ≥ 10% debt · FoF ≥ 95% in the underlying fund · ETF ≥ 95% in index securities · gold ETF up to 20% in bank gold deposits · real estate MF ≥ 35% physical, ≥ 75% physical + related securities · infrastructure debt scheme: 90% in specified securities, ≥ 5-yr tenor, minimum ₹1 crore, unit ≥ ₹10 lakh |
| Structures | Interval fund windows ≥ 2 days, ≥ 15 days apart · life-cycle funds 5–30 years in multiples of 5, at most 6 open for subscription at a time · FoF held over 2 years taxed at 12.5% + surcharge and cess · solution-oriented category discontinued from 26 Feb 2026 |
| ₹50,000 rules | PAN-exempt micro investments: up to ₹50,000 a year across a fund house (individuals only) · cash purchases up to ₹50,000 per investor per fund per financial year (redemptions only through banks) · third-party payment by parents/grandparents for a minor up to ₹50,000 per transaction · PAN also needed for bank FDs and insurance premiums above ₹50,000 |
| Holders · nominees | Up to 3 joint holders (MF, shares, demat); 2 for bank FDs, SCSS, NSC; NPS sole · up to 3 nominees · from 1 Sep 2026 new single-holder demat accounts and MF folios must nominate or formally opt out |
| Transmission | Simplified (no succession certificate) for uncontested claims up to ₹10 lakh physical / ₹30 lakh demat · quick route for immediate relatives up to ₹10,000 / ₹30,000 |
| NRIs | Resident if in India ≥ 182 days, or ≥ 60 days + ≥ 365 days in the 4 preceding years · NRO proceeds repatriable up to USD 1 million a year · one NRI ≤ 5% of a company, all NRIs ≤ 10% (raisable to 24%) |
| KYC · demat | Uniform KYC through KRAs since 1 Jan 2012 · CKYCR for individual accounts opened from 1 Aug 2016 · FATCA/CRS self-declaration since 2016 · public issues over ₹10 crore only in demat · physical share transfers stopped 1 Apr 2019 · DRFs kept 5 years · ISIN is 12 characters |
| Payments | RTGS for ₹2 lakh and above, NEFT no minimum · IFSC 11 characters, MICR 9 digits · ASBA mandatory for public issues from 1 Jan 2016 · minors are under 18 |
| Credit | CIBIL score 300–900 · one free full credit report per calendar year from each credit bureau · no prepayment charge on bank home loans · education loans repaid over 5–8 years, vehicle loans 3–7, home loans up to 30–35 |
| Banks | Payment banks: deposits up to ₹1,00,000, no lending, no credit cards · DICGC cover ₹5 lakh per depositor per bank · senior-citizen FD extra 0.25–0.75% |
| Money market | Call: overnight · notice: 2–14 days · term: 15 days–1 year · T-bills 91/182/364 days, ₹10,000 multiples · CMBs < 91 days · CP: ₹5 lakh, 7 days–1 year · CD: ₹1 lakh; banks 7 days–1 year, FIs 1–3 years · TREP ₹5 lakh · market repo ₹1 crore |
| Bonds | G-secs: semi-annual coupons, 5–30 yr tenors, face ₹100 (corporate ₹10,000) · max 12 ISINs maturing per year for an issuer · debenture trustee compulsory above 18 months maturity · retail investor ≤ ₹2 lakh · QIB provident/pension funds need a ₹25 crore corpus · investment grade = BBB and above |
| Small savings | PPF 15 years · NSC 5 years, minimum ₹1,000 · SCSS 60+ (55 if retired and invested within 3 months) · POMIS 5 years, max ₹9 lakh single / ₹15 lakh joint, penalty 2% (years 1–3) or 1% (after 3) · POTD 1/2/3/5 years · RD from ₹100 a month, one loan up to 50% after a year · Sukanya: girl ≤ 10, ₹250–₹1.5 lakh a year, matures after 21 years, 50% withdrawal at 18 · floating-rate savings bond = NSC rate + 0.35% |
| Capital market | Entity first → SEBI SCORES → Online Dispute Resolution (Smart ODR), within the law of limitation |
| Banking | Bank’s three tiers → RBI Integrated Ombudsman if unresolved within 1 month; award if no settlement within a month |
| Insurance | Insurer → IGMS → Insurance Ombudsman: recommendation within 1 month, award within 3 months; accept within 1 month |
| NPS | CRA → NPS Trust after 30 days → Ombudsman if unresolved 30 days after reaching the Trust |
| Appeals | SEBI / IRDAI / PFRDA order → SAT within 45 days → Supreme Court within 60 days |
Aumsetu — free tools for Mutual Fund Distributors. This sheet is an independent, free study aid based on the publicly published NISM-Series-X-A Investment Adviser (Level 1) workbook (Version September 2026). It is not affiliated with, endorsed by, or a product of NISM or SEBI. Always study the official workbook for the exam.