NISM V-D Flashcards – Free Active-Recall Practice

Browse the full flashcard deck

All 42 cards, listed by deck, for quick reference or offline printing. Prefer the guided practice mode? Jump back to the interactive flashcards above.

Roles & participants (8 cards)

What is SEBI?: Securities and Exchange Board of India. Regulates mutual funds, distributors, and the derivatives segments covered in this exam.
What is AMFI?: Association of Mutual Funds in India — an industry body (not a regulator) issuing the ARN and policing the distributor Code of Conduct.
What is Sponsor?: The promoter who sets up the mutual fund trust.
What is Trustees?: Oversee the AMC on investors' behalf; at least two-thirds must be independent.
What is AMC?: Asset Management Company — runs the fund's day-to-day operations.
What is Hedger?: Uses derivatives to reduce an existing risk exposure.
What is Speculator?: Takes a directional derivative position to profit from an expected price move.
What is Arbitrageur?: Exploits price discrepancies between markets for a near risk-free profit.

Core definitions (19 cards)

What is Net Asset Value (NAV)?: The true worth of one unit of a scheme — Net Assets ÷ Outstanding Units.
What is Total Expense Ratio (TER)?: All permitted costs charged to a scheme: base expense ratio + brokerage + transaction cost + statutory levies.
What is ARN?: AMFI Registration Number — mandatory for anyone distributing mutual funds.
What is EUIN?: Employee Unique Identification Number — identifies an employee of an institutional distributor, operating under that institution's ARN.
What is SID?: Scheme Information Document — everything specific to one scheme.
What is SAI?: Statement of Additional Information — fund-wide statutory information.
What is Forward contract?: A customised, OTC agreement to transact at a set price on a future date.
What is Futures contract?: A standardised, exchange-traded, daily-margined version of a forward.
What is Open interest?: The total number of outstanding (not yet settled) derivative contracts.
What is Intrinsic value?: The in-the-money portion of an option's premium.
What is Time value?: The portion of an option's premium beyond its intrinsic value, reflecting time remaining to expiry.
What is Put-call parity?: The formula tying a call, a put, and the underlying's price together for the same strike/expiry.
What is Delta-hedging?: Constructing a position momentarily insensitive to small moves in the underlying, using an option's Delta.
What is Free-float market capitalisation?: Index weighting method based on shares actually available for public trading, not total shares outstanding.
What is Term structure of interest rates?: The yield curve — yields plotted across different maturities.
What is Spot rate (zero rate)?: The yield on a zero-coupon instrument for a specific maturity.
What is Accrued interest?: Interest accumulated since the last coupon payment, owed to the seller on a bond sale.
What is Basis risk?: The risk that a hedge's underlying imperfectly matches the hedger's actual position.
What is OTC derivative?: A customised, bilaterally-negotiated derivative without central clearing.

Formulas & ratios (4 cards)

Formula for Sharpe Ratio?: (Return − Risk-free) ÷ Standard Deviation — Excess return per unit of TOTAL risk.
Formula for Treynor Ratio?: (Return − Risk-free) ÷ Beta — Excess return per unit of MARKET risk (Beta).
Formula for Futures contract value?: Futures Price × Lot Size — Contract value from the futures price.
Formula for Cost-of-carry futures price?: Spot Price + Cost of Carry (financing cost − dividend yield) — The theoretical futures price model.

Key numbers (11 cards)

V-D exam structure?: 150 Q / 150 marks — 150 questions, 1 mark each.
Exam duration?: 3 hours — Time allowed to complete the full V-D exam.
Passing score?: 60% (90/150) — Minimum percentage required to pass.
Negative marking?: 10% per wrong answer — Deducted from the score for each wrong answer.
Module 1 — Mutual Fund Distributors?: 68 of 150 marks — Chapters 1–12, same ground as V-A.
Module 2 — Equity Derivatives?: 52 of 150 marks — Chapters 13–17 — the heaviest module.
Module 3 — Interest Rate Derivatives?: 30 of 150 marks — Chapters 18–22.
IRF lot size?: Notional Rs. 2 lakh (2,000 bonds) — One lot of IRF on a GOI security.
IRF tick size?: Rs. 0.0025 — Minimum price movement for IRF contracts.
IRF expiry day?: Last Thursday of the month — Standard expiry day for IRF contracts.
IRF underlying maturity buckets?: 4–8, 8–11, 11–15 years — Residual maturity ranges for GOI security IRF.