n NISM Certifications
X NISM Series X
Medium

How should an investment adviser respond when asked why they do not follow a high-risk, high-return investment style like a relative?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    All investors are unique in risk appetite

  2. B

    Higher returns involve higher risks

  3. C

    Past returns are not indicative of future performance

  4. All of the above

    Correct answer

Why this is the answer

Each reason highlights valid considerations for advising clients based on individual risk tolerance and investment suitability rather than replicating high-risk strategies.

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