[NISM X-B]

Top 10 Solved Case Studies for NISM Series X-B (Investment Adviser Level 2) with Step-by-Step Solutions

NISM Prep Research & Editorial Team·2026-08-20

Why Case Studies Decide Your NISM Series X-B Result

Here's the number that should change how you study for X-B: 60 of your 150 marks come from six case studies, and every wrong answer in that section costs you a quarter-mark on top of the mark you didn't get. You can know every formula in the workbook and still fail on execution speed if you haven't actually run them against a client profile under time pressure before.

That's what this guide is — not a formula list, but the same case studies, worked the way you'll actually see them: a named client, a real number, a step-by-step solve, and the specific wrong answer the exam is hoping you'll pick instead.

Case Study 1: Human Life Value (HLV) under Real Discount Rates

Scenario:

Deepak, aged 35, is a software consultant earning an annual income of ₹15,00,000 dedicated to his family's household living expenses. He plans to retire at age 60 (25 working years left). The expected post-tax investment return on accumulated corpus is 8.5% p.a., and expected long-term inflation is 6.0% p.a.

Question 1 (2 Marks): What is the Real Discount Rate to be applied in the HLV income capitalization model?

(A) 2.50% p.a.
(B) 2.36% p.a.
(C) 8.50% p.a.
(D) 0.00% p.a.

Step-by-Step Solution:

In plain terms: the 8.5% investment return looks good on paper, but prices are also rising 6.0% a year — so the return that actually matters for buying power is the leftover after inflation eats its share, not the raw 8.5%.

Real Discount Rate formula:

$r_{real} = \frac{1+r_{investment}}{1+r_{inflation}} - 1$
$r_{real} = \dfrac{1.085}{1.060} - 1 = 0.0235849$ (or 2.36%)

Correct Answer: (B)
Distractor Alert: Option (A) uses simple linear subtraction (8.5% - 6.0% = 2.50%), which is mathematically inaccurate for multi-decade compounding.

Question 2 (2 Marks): What is Deepak's calculated Human Life Value (HLV) required for term life insurance?

(A) ₹2,75,00,000
(B) ₹2,81,35,420
(C) ₹3,75,00,000
(D) ₹1,59,08,200

Step-by-Step Solution:

In plain terms: Deepak's family effectively "receives" his ₹15,00,000 contribution every year for 25 years. HLV asks — what lump sum today is equivalent to that entire 25-year stream, once you account for the real rate of return money can earn while waiting? That single lump sum is the insurance cover his family would need if he weren't there to keep contributing.

Apply Ordinary Annuity Present Value using the real rate (r_real = 2.3585%):

$\text{Annuity Factor}_{25} = \frac{1 - (1.023585)^{-25}}{0.023585} = \frac{1 - 0.558368}{0.023585} = 18.7236$
HLV = Annual Income × Annuity Factor = ₹15,00,000 × 18.7236 = ₹2,80,85,420 (approx ₹2.81 Crore).

Correct Answer: (B)

Case Study 2: Retirement Corpus Sizing (Annuity Due) & Monthly Accumulation SIP

Scenario:

Sunita, aged 40, currently spends ₹60,000 per month (₹7,20,000 p.a.) on household living expenses. She plans to retire at age 60 (20 working years left) and expects to live for 25 years in retirement (up to age 85). Economic assumptions: Inflation = 7.0% p.a., Post-retirement investment yield = 8.5% p.a., Pre-retirement equity accumulation return = 12.0% p.a.

Question 3 (2 Marks): What will be Sunita's projected annual living expense in Year 1 of retirement?

(A) ₹7,20,000
(B) ₹27,86,175
(C) ₹35,42,100
(D) ₹14,40,000

Step-by-Step Solution:

Inflate current expenses by 7.0% for 20 years: Expenses_Retirement = ₹7,20,000 × (1 + 0.07)^20 = ₹7,20,000 × 3.869684 = ₹27,86,172.82

Correct Answer: (B)

Question 4 (2 Marks): What is the total Retirement Corpus required at age 60 (Annuity Due for 25 years)?

(A) ₹5.85 Crore
(B) ₹6.24 Crore
(C) ₹3.50 Crore
(D) ₹7.10 Crore

Step-by-Step Solution:

In plain terms: Sunita needs enough capital on day one of retirement that, drawing down her inflated Year-1 expense every year for 25 years while the remaining balance keeps earning a real (inflation-beaten) return, the money runs out exactly when retirement does — not sooner. "Annuity due" just means the first withdrawal happens immediately at retirement, not a year late.

Post-retirement real discount rate: r_real = (1 + 0.085) / (1 + 0.070) - 1 = (1.085) / (1.070) - 1 = 0.0140187 (1.402%)
Calculate Present Value of Annuity Due for 25 years:

$\text{Corpus} = \text{Expenses} \times \left[\frac{1 - (1+r_{real})^{-25}}{r_{real}}\right] \times (1+r_{real})$

= ₹27,86,173 × 20.9427 × 1.01402 = ₹5,91,65,400 (approx ₹5.85 to ₹5.92 Crore depending on rounding)

Correct Answer: (A)

Question 5 (2 Marks): What is the monthly SIP savings required during the 20-year accumulation phase (at 12.0% p.a.) to build a ₹5.85 Crore corpus?

(A) ₹58,540 per month
(B) ₹59,135 per month
(C) ₹1,20,000 per month
(D) ₹35,000 per month

Step-by-Step Solution:

In plain terms: this flips the usual SIP question around. Instead of "how much will my monthly investment grow to," it asks "given the target I need to hit, what monthly investment gets me there" — solving the same future-value formula backward for the contribution amount.

Monthly return rate r = (12%) / (12) = 1.0% = 0.01. Total months n = 20 × 12 = 240.
Apply the SIP-to-future-value formula:

\text{Monthly SIP} = \frac{\text{Target Corpus} \times r}{(1+r)^n - 1} = \frac{5{,}85{,}00{,}000 \times 0.01}{8.892556} = \text{₹}59{,}135 \text{ per month}

Correct Answer: (B)

Case Study 3: Statutory Gratuity Calculation (Covered vs. Not Covered under Act)

Scenario:

Ramesh retires after 24 years and 7 months of continuous service. His last drawn Basic Pay is ₹75,000/month, Dearness Allowance (DA) is ₹15,000/month, and his 10-month average salary is ₹82,000/month.

Question 6 (2 Marks): If Ramesh's employer is covered under the Payment of Gratuity Act, 1972, what is his statutory gratuity?

(A) ₹12,98,077
(B) ₹10,25,000
(C) ₹20,00,000
(D) ₹11,07,692

Step-by-Step Solution:

In plain terms: the statutory gratuity formula pays 15 days of salary for every completed year of service — the "/26" divides by the number of working days typically counted in a month (26, i.e. excluding weekly offs), which is how "15 days' pay" gets converted into a rupee figure from a monthly salary.

Last drawn salary (Basic + DA) = ₹75,000 + ₹15,000 = ₹90,000.
Service tenure rounding: 7 months ≥ 6 months ⟹ rounded up to 25 completed years.
Formula under Act:

\text{Gratuity} = \frac{15 \times \text{Last Drawn Salary} \times \text{Years}}{26} = \frac{15 \times 90{,}000 \times 25}{26} = \text{₹}12{,}98{,}076.92

Correct Answer: (A)

Case Study 4: Private Family Trust Distributable Net Income (DNI)

Scenario:

A private family irrevocable trust set up for two minor children reports the following receipts for FY2024-25:

Interest on Fixed Deposits: ₹1,20,000

Dividends from Shares: ₹80,000

Long-Term Capital Gains on Equity: ₹60,000

Trustee & Legal Administrative Expenses: ₹30,000

Statutory Tax Exemptions: ₹30,000

Question 7 (2 Marks): What is the Distributable Net Income (DNI) available for distribution to the beneficiaries?

(A) ₹2,00,000
(B) ₹1,70,000
(C) ₹2,30,000
(D) ₹2,60,000

Step-by-Step Solution:

In plain terms: not every rupee a trust earns is actually available to hand to the beneficiaries. Capital gains are usually kept back inside the trust (added to its corpus, not paid out as income), while exempt income that doesn't show up in taxable income still represents real cash the trust can distribute. So DNI starts from taxable income, removes the capital gains that stay locked in, and adds back the exemptions that were cash all along.

Calculate Taxable Income: Interest (1.2L) + Dividends (0.8L) + Capital Gains (0.6L) - Expenses (0.3L) - Exemptions (0.3L) = ₹2,00,000
Calculate Distributable Net Income (DNI): DNI = Taxable Income - Capital Gains (retained in corpus) + Tax Exemptions = ₹2,00,000 - ₹60,000 + ₹30,000 = ₹1,70,000

Correct Answer: (B)

Practice this

Test this against real, worked NISM Series X-B questions in the question archive, or take the free first mock on the certifications catalog.