📊 NISM Series V-D Chapter 10 of 22 ⚖ 5 of 150 marks weightage

Ch.10: Risk, Return and Performance of Funds

Practice questions for NISM-Series-VD: Mutual Fund - Specialised Investment Fund Distributors Certification Examination, Chapter 10: Risk, Return and Performance of Funds — covering measuring return (total return, rolling return, XIRR), measuring risk (Beta, standard deviation, VaR), systematic vs. unsystematic risk and diversification, risk-adjusted return measures (Sharpe, Sortino, Jensen's Alpha), and the impact of expense ratio on returns. Carries 5 out of 150 marks. The exam has 150 MCQs, 60% passing score, and −10% negative marking per wrong answer.

What You Will Learn in This Chapter

Components of return, and different return measures — total return, rolling return, and XIRR
Measuring risk — Beta, standard deviation, Value at Risk (VaR), and debt fund-specific risks like duration and interest rate risk
Systematic vs. unsystematic risk, and how diversification reduces (but does not eliminate) portfolio risk
Risk-adjusted performance measures — Sharpe Ratio, Sortino Ratio, and Jensen's Alpha — and their interpretation and limitations
Factors affecting mutual fund performance, including the impact of expense ratio and portfolio turnover on net returns

Key Terms:BetaStandard DeviationValue at Risk (VaR)Sharpe RatioSortino RatioJensen's AlphaSystematic RiskUnsystematic RiskRolling ReturnXIRR

Free Sample Question

Q1MCQEasySystematic and Unsystematic Risk

Which of the following best describes systematic risk in the context of mutual fund investments?

ARisk specific to a particular company or industry

BRisk that can be diversified away by holding a well-diversified portfolio

✓Risk inherent to the entire market or economy and cannot be diversified away

DRisk arising from poor management decisions within a specific fund

💡 Systematic risk, also known as market risk, is the risk inherent to the entire market or market segment. It is caused by factors such as interest rate changes, inflation, recessions, and wars. Unlike unsystematic risk, it cannot be eliminated through diversification.

42 more questions in this chapter

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About this content: These practice questions are based on the NISM-Series-VD: Mutual Fund - Specialised Investment Fund Distributors Certification Examination Workbook published by the National Institute of Securities Markets (NISM), Mumbai (March 2026 edition). NISM is a SEBI-established institution. Questions cover Chapter 10: Risk, Return and Performance of Funds with verified answers and explanations. BullWiser is an independent exam preparation platform — not affiliated with NISM, SEBI or AMFI. Last updated: July 24, 2026.

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