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Series XXIV · Practice Set 1

NISM Series XXIV: AML and CFT Provisions in Securities Markets Certification — Practice Set 1 Practice Questions

Original starter practice set for NISM Series XXIV: AML and CFT Provisions in Securities Markets Certification. Every question below shows the correct answer and a full explanation, so you can read through this set as a study page or attempt it as a timed mock test.

Attempt this set as a timed mock

Prefer an exam-like experience? Start this set as a shuffled, timed mock test with instant scoring, negative marking, and a full review screen.

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Practice questions

All 35 questions in Practice Set 1

Read each question, think through your answer, then expand it to check the correct option and explanation.

Exam Strategy

Q1. Which habit is most useful while preparing for Series XXIV AML & CFT Provisions?

  1. A. Memorising only answer keys
  2. B. Practising topics and reviewing explanations
  3. C. Skipping regulatory concepts
  4. D. Attempting only one mock test
Show correct answer & explanation

Correct answer: B. Practising topics and reviewing explanations

Mock tests are most useful when they reveal weak topics and explanations are reviewed after every attempt.
Exam Strategy

Q2. A candidate is unsure about a question with negative marking. What is the best first step?

  1. A. Guess immediately
  2. B. Eliminate clearly wrong options first
  3. C. Leave all difficult questions unanswered
  4. D. Change every answer at the end
Show correct answer & explanation

Correct answer: B. Eliminate clearly wrong options first

Eliminating wrong options improves decision quality, especially where incorrect answers carry a penalty.
Exam Strategy

Q3. Why should practice questions be topic-tagged?

  1. A. To make the test look longer
  2. B. To identify strengths and weak areas
  3. C. To replace the official workbook
  4. D. To avoid reading explanations
Show correct answer & explanation

Correct answer: B. To identify strengths and weak areas

Topic tagging helps learners plan revision after the mock test.
Exam Strategy

Q4. What does a good mock-test explanation usually include?

  1. A. Only the option letter
  2. B. The reason the correct option is right
  3. C. A random market tip
  4. D. A copied official question
Show correct answer & explanation

Correct answer: B. The reason the correct option is right

Explanations should teach the underlying concept, not only reveal the option.
AML framework

Q5. In AML framework, which approach is usually preferred?

  1. A. Follow the documented process and maintain records
  2. B. Ignore client/investor documentation
  3. C. Rely only on verbal confirmation
  4. D. Skip suitability or risk checks
Show correct answer & explanation

Correct answer: A. Follow the documented process and maintain records

AML framework questions often test process discipline, documentation, and regulatory awareness.
AML framework

Q6. A question from AML framework is asking for the primary purpose of a control. What should you look for?

  1. A. The option that reduces risk or improves transparency
  2. B. The option with the longest wording
  3. C. The option that sounds most aggressive
  4. D. The option unrelated to investors
Show correct answer & explanation

Correct answer: A. The option that reduces risk or improves transparency

Most controls in market certification exams are designed to protect investors, reduce operational risk, or improve transparency.
AML framework

Q7. When revising AML framework, what is the best way to use mock results?

  1. A. Review only correct answers
  2. B. Map mistakes to the topic and revise the concept
  3. C. Delete difficult topics
  4. D. Attempt the same answers without review
Show correct answer & explanation

Correct answer: B. Map mistakes to the topic and revise the concept

The value of a mock test comes from converting mistakes into focused revision.
AML framework

Q8. A scenario question under AML framework includes several facts. What should you identify first?

  1. A. The role, rule, or risk being tested
  2. B. The longest sentence
  3. C. The first number shown
  4. D. The least technical option
Show correct answer & explanation

Correct answer: A. The role, rule, or risk being tested

Scenario questions become easier when the tested role, rule, or risk is identified before choosing an option.
Customer due diligence

Q9. In Customer due diligence, which approach is usually preferred?

  1. A. Follow the documented process and maintain records
  2. B. Ignore client/investor documentation
  3. C. Rely only on verbal confirmation
  4. D. Skip suitability or risk checks
Show correct answer & explanation

Correct answer: A. Follow the documented process and maintain records

Customer due diligence questions often test process discipline, documentation, and regulatory awareness.
Customer due diligence

Q10. A question from Customer due diligence is asking for the primary purpose of a control. What should you look for?

  1. A. The option that reduces risk or improves transparency
  2. B. The option with the longest wording
  3. C. The option that sounds most aggressive
  4. D. The option unrelated to investors
Show correct answer & explanation

Correct answer: A. The option that reduces risk or improves transparency

Most controls in market certification exams are designed to protect investors, reduce operational risk, or improve transparency.
Customer due diligence

Q11. When revising Customer due diligence, what is the best way to use mock results?

  1. A. Review only correct answers
  2. B. Map mistakes to the topic and revise the concept
  3. C. Delete difficult topics
  4. D. Attempt the same answers without review
Show correct answer & explanation

Correct answer: B. Map mistakes to the topic and revise the concept

The value of a mock test comes from converting mistakes into focused revision.
Customer due diligence

Q12. A scenario question under Customer due diligence includes several facts. What should you identify first?

  1. A. The role, rule, or risk being tested
  2. B. The longest sentence
  3. C. The first number shown
  4. D. The least technical option
Show correct answer & explanation

Correct answer: A. The role, rule, or risk being tested

Scenario questions become easier when the tested role, rule, or risk is identified before choosing an option.
Suspicious transactions

Q13. In Suspicious transactions, which approach is usually preferred?

  1. A. Follow the documented process and maintain records
  2. B. Ignore client/investor documentation
  3. C. Rely only on verbal confirmation
  4. D. Skip suitability or risk checks
Show correct answer & explanation

Correct answer: A. Follow the documented process and maintain records

Suspicious transactions questions often test process discipline, documentation, and regulatory awareness.
Suspicious transactions

Q14. A question from Suspicious transactions is asking for the primary purpose of a control. What should you look for?

  1. A. The option that reduces risk or improves transparency
  2. B. The option with the longest wording
  3. C. The option that sounds most aggressive
  4. D. The option unrelated to investors
Show correct answer & explanation

Correct answer: A. The option that reduces risk or improves transparency

Most controls in market certification exams are designed to protect investors, reduce operational risk, or improve transparency.
Suspicious transactions

Q15. When revising Suspicious transactions, what is the best way to use mock results?

  1. A. Review only correct answers
  2. B. Map mistakes to the topic and revise the concept
  3. C. Delete difficult topics
  4. D. Attempt the same answers without review
Show correct answer & explanation

Correct answer: B. Map mistakes to the topic and revise the concept

The value of a mock test comes from converting mistakes into focused revision.
Suspicious transactions

Q16. A scenario question under Suspicious transactions includes several facts. What should you identify first?

  1. A. The role, rule, or risk being tested
  2. B. The longest sentence
  3. C. The first number shown
  4. D. The least technical option
Show correct answer & explanation

Correct answer: A. The role, rule, or risk being tested

Scenario questions become easier when the tested role, rule, or risk is identified before choosing an option.
Record keeping

Q17. In Record keeping, which approach is usually preferred?

  1. A. Follow the documented process and maintain records
  2. B. Ignore client/investor documentation
  3. C. Rely only on verbal confirmation
  4. D. Skip suitability or risk checks
Show correct answer & explanation

Correct answer: A. Follow the documented process and maintain records

Record keeping questions often test process discipline, documentation, and regulatory awareness.
Record keeping

Q18. A question from Record keeping is asking for the primary purpose of a control. What should you look for?

  1. A. The option that reduces risk or improves transparency
  2. B. The option with the longest wording
  3. C. The option that sounds most aggressive
  4. D. The option unrelated to investors
Show correct answer & explanation

Correct answer: A. The option that reduces risk or improves transparency

Most controls in market certification exams are designed to protect investors, reduce operational risk, or improve transparency.
Record keeping

Q19. When revising Record keeping, what is the best way to use mock results?

  1. A. Review only correct answers
  2. B. Map mistakes to the topic and revise the concept
  3. C. Delete difficult topics
  4. D. Attempt the same answers without review
Show correct answer & explanation

Correct answer: B. Map mistakes to the topic and revise the concept

The value of a mock test comes from converting mistakes into focused revision.
Record keeping

Q20. A scenario question under Record keeping includes several facts. What should you identify first?

  1. A. The role, rule, or risk being tested
  2. B. The longest sentence
  3. C. The first number shown
  4. D. The least technical option
Show correct answer & explanation

Correct answer: A. The role, rule, or risk being tested

Scenario questions become easier when the tested role, rule, or risk is identified before choosing an option.
Risk categorisation

Q21. In Risk categorisation, which approach is usually preferred?

  1. A. Follow the documented process and maintain records
  2. B. Ignore client/investor documentation
  3. C. Rely only on verbal confirmation
  4. D. Skip suitability or risk checks
Show correct answer & explanation

Correct answer: A. Follow the documented process and maintain records

Risk categorisation questions often test process discipline, documentation, and regulatory awareness.
Risk categorisation

Q22. A question from Risk categorisation is asking for the primary purpose of a control. What should you look for?

  1. A. The option that reduces risk or improves transparency
  2. B. The option with the longest wording
  3. C. The option that sounds most aggressive
  4. D. The option unrelated to investors
Show correct answer & explanation

Correct answer: A. The option that reduces risk or improves transparency

Most controls in market certification exams are designed to protect investors, reduce operational risk, or improve transparency.
Risk categorisation

Q23. When revising Risk categorisation, what is the best way to use mock results?

  1. A. Review only correct answers
  2. B. Map mistakes to the topic and revise the concept
  3. C. Delete difficult topics
  4. D. Attempt the same answers without review
Show correct answer & explanation

Correct answer: B. Map mistakes to the topic and revise the concept

The value of a mock test comes from converting mistakes into focused revision.
Risk categorisation

Q24. A scenario question under Risk categorisation includes several facts. What should you identify first?

  1. A. The role, rule, or risk being tested
  2. B. The longest sentence
  3. C. The first number shown
  4. D. The least technical option
Show correct answer & explanation

Correct answer: A. The role, rule, or risk being tested

Scenario questions become easier when the tested role, rule, or risk is identified before choosing an option.
AML framework

Q25. In Series XXIV Core Practice, a learner wants to improve accuracy in AML framework. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
Suspicious transactions

Q26. In Series XXIV Core Practice, a learner wants to improve accuracy in Suspicious transactions. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
Risk categorisation

Q27. In Series XXIV Core Practice, a learner wants to improve accuracy in Risk categorisation. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
Customer due diligence

Q28. In Series XXIV Core Practice, a learner wants to improve accuracy in Customer due diligence. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
Record keeping

Q29. In Series XXIV Core Practice, a learner wants to improve accuracy in Record keeping. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
AML framework

Q30. In Series XXIV Core Practice, a learner wants to improve accuracy in AML framework. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
Suspicious transactions

Q31. In Series XXIV Core Practice, a learner wants to improve accuracy in Suspicious transactions. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
Risk categorisation

Q32. In Series XXIV Core Practice, a learner wants to improve accuracy in Risk categorisation. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
Customer due diligence

Q33. In Series XXIV Core Practice, a learner wants to improve accuracy in Customer due diligence. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
Record keeping

Q34. In Series XXIV Core Practice, a learner wants to improve accuracy in Record keeping. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.
AML framework

Q35. In Series XXIV Core Practice, a learner wants to improve accuracy in AML framework. Which study action is most useful?

  1. A. Review the concept, read explanations, and practise similar questions
  2. B. Memorise only the previous option letter
  3. C. Skip the topic because it appeared difficult
  4. D. Attempt faster without checking why answers were wrong
Show correct answer & explanation

Correct answer: A. Review the concept, read explanations, and practise similar questions

Accuracy improves when the learner connects the concept, the explanation, and repeated practice on the same weak area.

How to use this set

Work through the questions in order without expanding the answers first, exactly as you would in the real Series XXIV exam. Once you have picked an option, expand the answer to confirm whether you were right and read the explanation, even for questions you answered correctly, since the reasoning behind each option is where most of the learning happens.

If you get a question wrong, note the topic tag above the question and revisit that topic in the Series XXIV exam page before your next attempt. When you are ready for exam-condition practice, use the timed mock test above; it shuffles these questions, applies the negative marking rule, and gives you a scored review at the end.