📊 NISM Series V-D Chapter 14 of 22 ⚖ 5 of 150 marks weightage

Ch.14: Understanding Index

Practice questions for NISM-Series-VD: Mutual Fund - Specialised Investment Fund Distributors Certification Examination, Chapter 14: Understanding Index — covering index construction methods, impact cost, index management, and the applications of indices in fund products. 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

The index and its significance as a market benchmark and derivatives underlying
Four index construction methods: market-cap weighted, free-float, price-weighted and equal-weighted — including how each is calculated
Impact cost and the bid-ask spread, and how liquidity affects transaction cost
Index management: construction, maintenance and revision, including SEBI's 2025 prudential norms for non-benchmark index derivatives
Applications of indices — index funds, index derivatives and Exchange Traded Funds (ETFs)

Key Terms:Market-Cap WeightedFree-FloatPrice-WeightedEqual-WeightedImpact CostBid-Ask SpreadIndex CommitteeTracking ErrorETF

Free Sample Question

Q1MCQEasyPrice-Weighted Index

Which of these are cited as popular price-weighted indices?

ANifty 50 and Sensex

✓Dow Jones Industrial Average and Nikkei 225

CS&P BSE 500 and Nifty 500

DSX40 and Nifty Next 50

💡 The Dow Jones Industrial Average and Nikkei 225 are named as popular price-weighted indices.

29 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 14: Understanding Index 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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← Ch.13: Basics of Derivatives Ch.15: Introduction to Forwards and Futures →