Skip to content

NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Portfolio Manager

In a discretionary portfolio management service, the portfolio manager:

In a discretionary portfolio management service the manager exercises independent discretion in making investment and management decisions for the client, within the terms of the agreement. Prior approval for each trade is not needed, unlike non-discretionary services.

  1. AMust obtain the client's prior approval for every individual trade
  2. BExercises independent discretion over investment decisions on the client's behalf, as per the agreementCorrect
  3. CCan only invest in debt instruments
  4. DCannot charge any fee linked to performance

Explanation

Under a discretionary service the manager takes investment decisions independently, within the mandate in the agreement. Per-trade approval is the feature of non-discretionary services. There is no restriction to debt, and performance-linked fees are permitted if disclosed.

Did you get it right without looking?

One question tells you little. A timed set on Portfolio Manager shows your real accuracy, how long you take and where you lose marks.

Practise Portfolio ManagerFree diagnostic mock

More Portfolio Manager questions