Skip to content

NISM Certifications · NISM-Series-VII: Securities Operations and Risk Management · Introduction to the Securities Market

An investor wants exposure to a pooled portfolio managed by a professional, with units issued at NAV and the pool registered with SEBI under a trust structure. Which participant best fits this description, and how does it differ from a stock broker?

A mutual fund pools money from investors, invests it professionally and issues units at NAV, operating under SEBI regulation. A stock broker does not pool funds; it only executes buy and sell orders for clients as a trading intermediary.

  1. AA mutual fund, which pools investor money, whereas a broker only executes trades as an intermediaryCorrect
  2. BA depository participant, which pools money, whereas a broker holds shares
  3. CA clearing corporation, which pools money, whereas a broker advises
  4. DA merchant banker, which pools money, whereas a broker underwrites

Explanation

A mutual fund collects money from many investors and invests in securities, issuing units at NAV. A stock broker merely executes orders for clients as an intermediary. The other options misassign functions: DPs, clearing corporations and merchant bankers do not pool investor money into units.

Did you get it right without looking?

One question tells you little. A timed set on Introduction to the Securities Market shows your real accuracy, how long you take and where you lose marks.

Practise Introduction to the Securities MarketFree diagnostic mock

More Introduction to the Securities Market questions