📊 NISM Series V-D Chapter 18 of 22 ⚖ 6 of 150 marks weightage

Ch.18: Interest Rate Instruments and Fixed Income Markets

Practice questions for NISM-Series-VD: Mutual Fund - Specialised Investment Fund Distributors Certification Examination, Chapter 18: Interest Rate, Interest Rate Instruments and Fixed Income Markets — covering interest rate fundamentals, the full taxonomy of fixed income securities, day count conventions, accrued interest, all bond yield measures, bond pricing mechanics, Macaulay/Modified Duration, PV01 and Convexity, and the structure and regulation of India's primary and secondary debt and money markets. Carries 6 out of 150 marks — the lowest weight per page-count in the syllabus, but one of its most conceptually dense chapters. The exam has 150 MCQs, 60% passing score, and −10% negative marking per wrong answer.

What You Will Learn in This Chapter

Macro and micro factors driving interest rates, effective vs. nominal rate, and the full taxonomy of fixed income securities by issuer, maturity, coupon type, embedded options, security and seniority
Risk-free rate, credit spread, term structure of interest rates (yield curve shapes) and term structure shifts (steepening, flattening, twist, convexity change)
Day count conventions (Actual/Actual, 30/360, Actual/365, Actual/360), accrued interest, and clean vs. dirty bond price
Bond yield measures — Current Yield, Yield to Maturity, Bond Equivalent Yield, Discount Yield, Effective Yield — and bond valuation mechanics for annual and semi-annual coupon bonds
Macaulay Duration, Modified Duration, PV01 and Convexity as measures of a bond's interest rate risk, and how India's primary/secondary G-Sec, corporate bond and money markets are structured and regulated

Key Terms:Macaulay DurationModified DurationConvexityPV01Accrued InterestClean PriceDirty PriceYield to MaturityDay Count ConventionCredit Rating

Free Sample Question

Q1MCQMediumTerm Structure Shifts

When the spread between long-term and short-term rates widens (increases), the shift is called:

AFlattening

✓Steepening

CA parallel shift

DInversion

💡 Steepening occurs when the difference between the long rate (LR) and short rate (SR) rises or widens — the curve shifts in an anti-clockwise direction. Flattening is the opposite, where the spread narrows.

59 more questions in this chapter

The full V-D question bank (900+ questions across all 22 chapters, with explanations) is included in the ₹199 mock pack and the notes PDF. Try the free full-length mock first, no login needed.

Start the free V-D mock Get notes and question bank

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 18: Interest Rate Instruments and Fixed Income Markets with verified answers and explanations. BullWiser is an independent exam preparation platform — not affiliated with NISM, SEBI or AMFI. Last updated: July 24, 2026.

NISM SERIES V-D

Practice the full Series V-D question bank.

22 chapters, 150 marks, 60% pass, negative marking. Take the free mock test or get the complete study pack.

Try the Free V-D Mock Test →

✓ Unlock the 8 full mocks (₹199), pass the real NISM exam, and get your ₹199 back in your UPI. Conditions apply

← Ch.17: Strategies using Equity Futures and Equity Options Ch.19: Interest Rate Derivatives →