SEBI Investor Certification Examination

Syllabus and chapter weightage

Weightages are taken from the official syllabus table published in the NISM workbook, so you can see exactly where the marks are.

Every chapter can be read free, no account needed — tap a chapter to open its plain-English Foundation lesson.

Sample questions

5 questions from the chapter tests, one per chapter. Pick your answer before you open the explanation.

1. Question 1 · Chapter 1: Introduction

   How does the booklet describe financial literacy?

   1. A.As a professional qualification required to work in the securities market
   2. B.As a life skill, to be imparted to every individual for management of their personal finances
   3. C.As a subject relevant only to investors in the stock market
   4. D.As a benefit available to those who have completed higher education
   Show the answer

   Answer: B. As a life skill, to be imparted to every individual for management of their personal finances

   "Financial literacy assumes much significance in today's world. FINANCIAL LITERACY, AS A LIFE SKILL, IS TO BE IMPARTED TO EVERY INDIVIDUAL for management of their personal finances." Three things are being asserted, and each is a trap for one of the wrong options: it is a life skill, not a professional qualification; it is for every individual, not for investors or graduates alone; and its object is personal finances, not corporate or public finance. A person who never buys a single share still needs it, because a bank form, an insurance pitch and a Ponzi offer will each reach them anyway.

2. Question 2 · Chapter 2: Key Concepts in personal finance

   How does the booklet define savings?

   1. A.The total balance lying in a bank account
   2. B.The surplus of income over expenditure
   3. C.Money invested in fixed deposits
   4. D.Income earned from salary and wages
   Show the answer

   Answer: B. The surplus of income over expenditure

   "Savings are the SURPLUS OF INCOME OVER EXPENDITURE." The word surplus makes savings a flow, not a balance. A family earning ₹40,000 and spending ₹42,000 has negative savings this month even if ₹3 lakh sits in its account from earlier years — it is running down the past rather than adding to it. The chapter breaks the two components out: income is "money earned from various sources like Salary, Wages, etc." and expenditure is "money spent on various items which include essential and NON-ESSENTIAL items". Note that both essential and non-essential spending count; an option restricting expenditure to essentials is wrong.

3. Question 3 · Chapter 3: Financial Planning

   How is net worth calculated?

   1. A.Income minus expenditure
   2. B.Assets you own minus liabilities you owe
   3. C.Total assets plus total liabilities
   4. D.Savings plus investments minus tax
   Show the answer

   Answer: B. Assets you own minus liabilities you owe

   "Your net worth is simply ASSETS YOU OWN MINUS LIABILITIES YOU OWE." The booklet works it out: car ₹25,000 + bank balance ₹5,00,000 + house ₹50,00,000 = ₹55,25,000 of assets; house loan ₹20,00,000 + car loan ₹10,000 = ₹20,10,000 of liabilities; net worth ₹35,15,000. Option (a) is the savings formula from Chapter 2, and confusing the two is the commonest error here — savings is a flow measuring what you added this month, net worth is a stock measuring where you stand today. Note also that the self-occupied house counts as an asset: the definition requires only that you own it and that it has economic value. The chapter adds why the number matters — "your net worth indicates your CAPACITY to achieve your financial goals."

4. Question 4 · Chapter 4: Savings Related Products

   Which of the following is listed as a drawback of keeping cash at home?

   1. A.Cash at home attracts wealth tax
   2. B.No or low credit eligibility, since deposits in banks create eligibility for taking loans
   3. C.Cash at home must be declared to the Reserve Bank of India
   4. D.Cash at home loses its legal tender status after five years
   Show the answer

   Answer: B. No or low credit eligibility, since deposits in banks create eligibility for taking loans

   The chapter lists three drawbacks: "Unsafe – Money can be stolen or lost due to natural calamities; Loss of growth opportunities - Loss of interest income; NO/LOW CREDIT ELIGIBILITY - Deposit in banks CREATES ELIGIBILITY FOR TAKING LOANS." The third is the one candidates forget, and it is the one that matters most in practice. A household keeping ₹2 lakh at home for five years has no record of it anywhere, so when it needs a loan for a shop, a hospital bill or a house, it has nothing to show. The same money in a bank builds a statement, a relationship and a borrowing capacity. The conclusion the chapter draws: "it is beneficial to keep money in banks rather than at home in cash."

5. Question 5 · Chapter 5: Investment in Securities Market

   A company announces a product recall and a new competitor enters its market. Which type of risk does this illustrate?

   1. A.Systematic risk
   2. B.Unsystematic risk
   3. C.Currency risk
   4. D.Inflation risk
   Show the answer

   Answer: B. Unsystematic risk

   "Unsystematic risk can be described as the uncertainty inherent in A PARTICULAR COMPANY OR INDUSTRY. Examples of unsystematic risk include a NEW COMPETITOR in the marketplace with the potential to take significant market share from the company an investor is invested in, A REGULATORY CHANGE, such as one that could drive down company sales, A SHIFT IN MANAGEMENT, A PRODUCT RECALL, etc." Contrast market or systematic risk, where "an investor may experience losses due to factors affecting the OVERALL PERFORMANCE of financial markets and macroeconomic factors", with "stock market bubbles and crashes" as examples. The practical difference is everything: unsystematic risk is what diversification removes, because a recall at one company leaves the other twenty untouched; systematic risk is what diversification cannot touch, because it strikes every holding at once.

Frequently asked questions

What is the passing mark for NISM Series SEBI-ICE?

You need 50% to pass NISM-Series-SEBI-ICE: SEBI Investor Certification Examination. On a 50-mark paper that is 25 marks.

Is there negative marking in NISM Series SEBI-ICE?

There is no negative marking, so never leave a question blank — an uncertain guess costs you nothing.

How long is the NISM Series SEBI-ICE exam?

The exam runs for 60 minutes and carries 50 marks in total.

How long is the NISM Series SEBI-ICE certificate valid?

NISM certifications are generally valid for 3 years from the date of passing, after which they must be renewed. Confirm the current position on nism.ac.in before your certificate lapses.