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Series XXIV · Topic Drill

NISM Series XXIV: AML and CFT Provisions in Securities Markets Certification — Topic Drill Practice Questions

Focused topic-wise drill for NISM Series XXIV: AML and CFT Provisions in Securities Markets Certification revision. 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.

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Practice questions

All 30 questions in Topic Drill

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

AML framework

Q1. Which statement best reflects a responsible approach to AML framework?

  1. A. Follow the applicable rule, document the process, and protect investor interest
  2. B. Prioritise speed over documentation
  3. C. Avoid explaining risks to the investor
  4. D. Use the same answer for every client situation
Show correct answer & explanation

Correct answer: A. Follow the applicable rule, document the process, and protect investor interest

Responsible market practice generally combines rule awareness, documentation, transparency, and investor protection.
AML framework

Q2. A learner repeatedly makes mistakes in AML framework. What should be done before the next mock?

  1. A. Revise the concept and attempt targeted questions
  2. B. Attempt only easier exams
  3. C. Ignore the topic because one mock is enough
  4. D. Memorise option letters
Show correct answer & explanation

Correct answer: A. Revise the concept and attempt targeted questions

Targeted revision is more effective than repeating the same test without understanding the weak concept.
AML framework

Q3. In an exam scenario based on AML framework, why are definitions important?

  1. A. They help identify the exact role, product, rule, or risk being tested
  2. B. They make all options correct
  3. C. They replace calculations
  4. D. They remove the need to read the question
Show correct answer & explanation

Correct answer: A. They help identify the exact role, product, rule, or risk being tested

Definitions and roles often decide the correct option in certification-style questions.
AML framework

Q4. What is a common mistake while answering AML framework questions?

  1. A. Selecting an option before reading all conditions in the scenario
  2. B. Checking whether a rule or process applies
  3. C. Comparing similar options
  4. D. Reviewing the explanation after the test
Show correct answer & explanation

Correct answer: A. Selecting an option before reading all conditions in the scenario

Scenario questions often include conditions that change the answer, so every fact matters.
AML framework

Q5. Which revision note is most useful for AML framework?

  1. A. A short note linking the rule, exception, and practical example
  2. B. Only the question number
  3. C. Only the first option
  4. D. A note unrelated to the syllabus
Show correct answer & explanation

Correct answer: A. A short note linking the rule, exception, and practical example

Good notes connect the concept to its application, which improves recall in new questions.
Customer due diligence

Q6. Which statement best reflects a responsible approach to Customer due diligence?

  1. A. Follow the applicable rule, document the process, and protect investor interest
  2. B. Prioritise speed over documentation
  3. C. Avoid explaining risks to the investor
  4. D. Use the same answer for every client situation
Show correct answer & explanation

Correct answer: A. Follow the applicable rule, document the process, and protect investor interest

Responsible market practice generally combines rule awareness, documentation, transparency, and investor protection.
Customer due diligence

Q7. A learner repeatedly makes mistakes in Customer due diligence. What should be done before the next mock?

  1. A. Revise the concept and attempt targeted questions
  2. B. Attempt only easier exams
  3. C. Ignore the topic because one mock is enough
  4. D. Memorise option letters
Show correct answer & explanation

Correct answer: A. Revise the concept and attempt targeted questions

Targeted revision is more effective than repeating the same test without understanding the weak concept.
Customer due diligence

Q8. In an exam scenario based on Customer due diligence, why are definitions important?

  1. A. They help identify the exact role, product, rule, or risk being tested
  2. B. They make all options correct
  3. C. They replace calculations
  4. D. They remove the need to read the question
Show correct answer & explanation

Correct answer: A. They help identify the exact role, product, rule, or risk being tested

Definitions and roles often decide the correct option in certification-style questions.
Customer due diligence

Q9. What is a common mistake while answering Customer due diligence questions?

  1. A. Selecting an option before reading all conditions in the scenario
  2. B. Checking whether a rule or process applies
  3. C. Comparing similar options
  4. D. Reviewing the explanation after the test
Show correct answer & explanation

Correct answer: A. Selecting an option before reading all conditions in the scenario

Scenario questions often include conditions that change the answer, so every fact matters.
Customer due diligence

Q10. Which revision note is most useful for Customer due diligence?

  1. A. A short note linking the rule, exception, and practical example
  2. B. Only the question number
  3. C. Only the first option
  4. D. A note unrelated to the syllabus
Show correct answer & explanation

Correct answer: A. A short note linking the rule, exception, and practical example

Good notes connect the concept to its application, which improves recall in new questions.
Suspicious transactions

Q11. Which statement best reflects a responsible approach to Suspicious transactions?

  1. A. Follow the applicable rule, document the process, and protect investor interest
  2. B. Prioritise speed over documentation
  3. C. Avoid explaining risks to the investor
  4. D. Use the same answer for every client situation
Show correct answer & explanation

Correct answer: A. Follow the applicable rule, document the process, and protect investor interest

Responsible market practice generally combines rule awareness, documentation, transparency, and investor protection.
Suspicious transactions

Q12. A learner repeatedly makes mistakes in Suspicious transactions. What should be done before the next mock?

  1. A. Revise the concept and attempt targeted questions
  2. B. Attempt only easier exams
  3. C. Ignore the topic because one mock is enough
  4. D. Memorise option letters
Show correct answer & explanation

Correct answer: A. Revise the concept and attempt targeted questions

Targeted revision is more effective than repeating the same test without understanding the weak concept.
Suspicious transactions

Q13. In an exam scenario based on Suspicious transactions, why are definitions important?

  1. A. They help identify the exact role, product, rule, or risk being tested
  2. B. They make all options correct
  3. C. They replace calculations
  4. D. They remove the need to read the question
Show correct answer & explanation

Correct answer: A. They help identify the exact role, product, rule, or risk being tested

Definitions and roles often decide the correct option in certification-style questions.
Suspicious transactions

Q14. What is a common mistake while answering Suspicious transactions questions?

  1. A. Selecting an option before reading all conditions in the scenario
  2. B. Checking whether a rule or process applies
  3. C. Comparing similar options
  4. D. Reviewing the explanation after the test
Show correct answer & explanation

Correct answer: A. Selecting an option before reading all conditions in the scenario

Scenario questions often include conditions that change the answer, so every fact matters.
Suspicious transactions

Q15. Which revision note is most useful for Suspicious transactions?

  1. A. A short note linking the rule, exception, and practical example
  2. B. Only the question number
  3. C. Only the first option
  4. D. A note unrelated to the syllabus
Show correct answer & explanation

Correct answer: A. A short note linking the rule, exception, and practical example

Good notes connect the concept to its application, which improves recall in new questions.
Record keeping

Q16. Which statement best reflects a responsible approach to Record keeping?

  1. A. Follow the applicable rule, document the process, and protect investor interest
  2. B. Prioritise speed over documentation
  3. C. Avoid explaining risks to the investor
  4. D. Use the same answer for every client situation
Show correct answer & explanation

Correct answer: A. Follow the applicable rule, document the process, and protect investor interest

Responsible market practice generally combines rule awareness, documentation, transparency, and investor protection.
Record keeping

Q17. A learner repeatedly makes mistakes in Record keeping. What should be done before the next mock?

  1. A. Revise the concept and attempt targeted questions
  2. B. Attempt only easier exams
  3. C. Ignore the topic because one mock is enough
  4. D. Memorise option letters
Show correct answer & explanation

Correct answer: A. Revise the concept and attempt targeted questions

Targeted revision is more effective than repeating the same test without understanding the weak concept.
Record keeping

Q18. In an exam scenario based on Record keeping, why are definitions important?

  1. A. They help identify the exact role, product, rule, or risk being tested
  2. B. They make all options correct
  3. C. They replace calculations
  4. D. They remove the need to read the question
Show correct answer & explanation

Correct answer: A. They help identify the exact role, product, rule, or risk being tested

Definitions and roles often decide the correct option in certification-style questions.
Record keeping

Q19. What is a common mistake while answering Record keeping questions?

  1. A. Selecting an option before reading all conditions in the scenario
  2. B. Checking whether a rule or process applies
  3. C. Comparing similar options
  4. D. Reviewing the explanation after the test
Show correct answer & explanation

Correct answer: A. Selecting an option before reading all conditions in the scenario

Scenario questions often include conditions that change the answer, so every fact matters.
Record keeping

Q20. Which revision note is most useful for Record keeping?

  1. A. A short note linking the rule, exception, and practical example
  2. B. Only the question number
  3. C. Only the first option
  4. D. A note unrelated to the syllabus
Show correct answer & explanation

Correct answer: A. A short note linking the rule, exception, and practical example

Good notes connect the concept to its application, which improves recall in new questions.
Risk categorisation

Q21. Which statement best reflects a responsible approach to Risk categorisation?

  1. A. Follow the applicable rule, document the process, and protect investor interest
  2. B. Prioritise speed over documentation
  3. C. Avoid explaining risks to the investor
  4. D. Use the same answer for every client situation
Show correct answer & explanation

Correct answer: A. Follow the applicable rule, document the process, and protect investor interest

Responsible market practice generally combines rule awareness, documentation, transparency, and investor protection.
Risk categorisation

Q22. A learner repeatedly makes mistakes in Risk categorisation. What should be done before the next mock?

  1. A. Revise the concept and attempt targeted questions
  2. B. Attempt only easier exams
  3. C. Ignore the topic because one mock is enough
  4. D. Memorise option letters
Show correct answer & explanation

Correct answer: A. Revise the concept and attempt targeted questions

Targeted revision is more effective than repeating the same test without understanding the weak concept.
Risk categorisation

Q23. In an exam scenario based on Risk categorisation, why are definitions important?

  1. A. They help identify the exact role, product, rule, or risk being tested
  2. B. They make all options correct
  3. C. They replace calculations
  4. D. They remove the need to read the question
Show correct answer & explanation

Correct answer: A. They help identify the exact role, product, rule, or risk being tested

Definitions and roles often decide the correct option in certification-style questions.
Risk categorisation

Q24. What is a common mistake while answering Risk categorisation questions?

  1. A. Selecting an option before reading all conditions in the scenario
  2. B. Checking whether a rule or process applies
  3. C. Comparing similar options
  4. D. Reviewing the explanation after the test
Show correct answer & explanation

Correct answer: A. Selecting an option before reading all conditions in the scenario

Scenario questions often include conditions that change the answer, so every fact matters.
Risk categorisation

Q25. Which revision note is most useful for Risk categorisation?

  1. A. A short note linking the rule, exception, and practical example
  2. B. Only the question number
  3. C. Only the first option
  4. D. A note unrelated to the syllabus
Show correct answer & explanation

Correct answer: A. A short note linking the rule, exception, and practical example

Good notes connect the concept to its application, which improves recall in new questions.
Customer due diligence

Q26. In Series XXIV Topic Drill, 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

Q27. In Series XXIV Topic Drill, 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

Q28. In Series XXIV Topic Drill, 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

Q29. In Series XXIV Topic Drill, 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

Q30. In Series XXIV Topic Drill, 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.

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.