n NISM Certifications
X NISM Series X
Medium

To replicate an index like Sensex or Nifty, the simplest method is:

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Investing in equities of all index stocks proportionately

  2. Purchasing units of an Index Fund representing the index

    Correct answer

  3. C

    Both are equally easy

  4. D

    None of the above

Why this is the answer

Index funds replicate index returns by investing in the same securities in the same proportions, offering an easier replication method.

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