NISM Series XIX-C AIF Managers Certification Exam - 1

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Q 1. How does liquidity risk affect the conversion of assets into cash?

a) It facilitates quick conversion with minimal price deviation

b) It delays conversion with significant price deviation

c) It has no impact on asset conversion

d) It increases uncertainty in the secondary market
 
Q 2. Which market segment allows issuers to raise capital by issuing securities for the first time?

a) Secondary market

b) Tertiary market

c) Primary market

d) Quaternary market
 
Q 3. How is liquidity risk defined?

a) Variability of income flows caused by the nature of a firm's business

b) Increase in volatility of stockholder's income due to debt financing

c) Ease of converting an asset into cash near its economic worth

d) Uncertainty introduced by the secondary market of an investment
 
Q 4. What factors determine the real risk-free rate?

a) Desire for current consumption and inflation rate

b) Desire for current consumption and available investment opportunities

c) Available investment opportunities and growth rate of the economy

d) Desire for current consumption, available investment opportunities, and inflation rate
 
Q 5. What is the definition of a non-institutional investor?

a) An investor who trades for another company

b) An investor who buys and sells securities for personal accounts

c) An investor who applies for specified securities for a value of more than INR 2 lakh

d) An investor who employs specialized investment skills
 
Q 6. What is the constituent considered for the Nifty T-Bill Index for 91-day, 182-day, and 1-year T-bills?

a) The most liquid T-bill

b) T-bills with the highest trading value

c) The most recently issued T-bill

d) T-bill with the longest residual maturity
 
Q 7. What is the primary purpose of performance benchmarking for investors?

a) Predicting future market trends

b) Monitoring returns generated by AIFs

c) Maximizing short-term gains

d) Analyzing macroeconomic indicators
 
Q 8. Why is it difficult to benchmark the performance of Category I AIFs and Category II AIFs against broad-based indices?

a) They invest primarily in listed securities

b) They invest primarily in early-stage start-ups and unlisted securities

c) They have a passive investment strategy

d) They have a market-neutral strategy
 
Q 9. Who has appointed the three benchmarking agencies that have published AIF benchmarks for all Categories of AIFs?

a) SEBI

b) RBI

c) IVCA

d) AMFI
 
Q 10. How are stocks categorized into growth and value stocks?

a) Based on historical performance

b) Based on market volatility

c) Based on market capitalization

d) Based on ratios like P/E ratio, P/B ratio, and dividend yield
 
Q 11. What index represents the next 150 companies based on full market capitalization from NIFTY 500?

a) NIFTY 50 Index

b) NIFTY Next 50 Index

c) NIFTY 100 Index

d) NIFTY Midcap150 Index
 
Q 12. What is the primary focus of a Directional Strategy?

a) Minimizing systematic risk

b) Achieving short-term capital gains

c) Maximizing leverage

d) Speculative trading
 
Q 13. What happens if the AIF is established as a trust and incurs expenses related to resolving investor claims?

A) The expenses are borne by SEBI

B) The trust property covers all expenses

C) Investors are liable to cover expenses

d) Expenses are met by the Manager or officers, not from the trust property
 
Q 14. What risks are associated with a Short-bias Strategy during major macroeconomic upturns?

a) Increased market risk

b) Decreased market volatility

c) Enhanced capital preservation

d) Increased volatility
 
Q 15. What role do follow-up due diligence calls play in the IDD process?

a) They finalize the investment decision

b) They provide additional information for the financial model

c) They allow discussions with specific members of the investee company's management team

d) None of the above

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