NISM Series XIX-C AIF Managers Certification Exam - 11

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Q 1. Why do some funds choose to charge performance fees only at the end of the fund's tenure?

a) To discourage early exits

b) To avoid situations related to clawback

c) To increase investor returns

d) None of the above
 
Q 2. What is the starting base value typically chosen for an equal-weighted index?

a) INR 500

b) INR 1000

c) INR 2500

d) INR 5000
 
Q 3. How are gross returns typically calculated for different classes of investors in an AIF?

a) By deducting all common fund expenses

b) By considering only management fees

c) By excluding incentive fees for certain classes of investors

d) None of the above
 
Q 4. What is exchange rate risk?

a) Volatility of returns caused by political changes

b) Volatility of returns due to changes in exchange rates

c) Volatility of returns due to geopolitical tensions

d) Volatility of returns due to economic fluctuations
 
Q 5. What is the market where securities are issued, bought, and sold referred to as?

a) Banking market

b) Investment market

c) Securities market

d) Capital market
 
Q 6. What does the required rate of return represent?

a) Guaranteed return from investments

b) Forecasted return from investments

c) Minimum rate of return investors expect

d) Rate of return adjusted for market trends
 
Q 7. What should an investor consider before discussing desired returns?

a) Liquidity preferences

b) Risk appetite

c) Market speculation

d) Short-term market trends
 
Q 8. What type of investors pursue the goal of capital preservation?

a) Risk-averse investors

b) Speculative investors

c) Long-term investors

d) Market trend followers
 
Q 9. What is the primary purpose of market indices?

a) To provide access to complex market indicators

b) To reflect individual security performance

c) To serve as a benchmark for portfolio evaluation

d) To calculate absolute portfolio performance
 
Q 10. What requirements do the GIPS standards impose on the benchmark chosen for any composite or pooled fund?

a) It must be selected by the investment manager.

b) It must be an appropriate total return benchmark.

c) It must be the same for all composite or pooled funds.

d) It must be the benchmark of a major index provider.
 
Q 11. How can an association of AIFs notify benchmarking agencies?

a) By representing at least 50% of the number of AIFs

b) By representing at least 25% of the number of AIFs

c) By representing at least 33% of the number of AIFs

d) By representing at least 90% of the number of AIFs
 
Q 12. How are benchmarks created for Category III AIFs?

a) Based on vintage years only

b) Using pooled IRR only

c) Using asset-weighted indices based on AUM and quarterly returns

d) None of the above
 
Q 13. How are weights assigned to selected bonds in the NIFTY A Bond Indices?

a) Random allocation

b) Based on your credit rating

c) Based on issuance size

d) Based on trading volume
 
Q 14. What is the focus of a value portfolio manager when anticipating a market correction?

a) Current earnings

b) Share valuation

c) Fundamental drivers of earnings growth

d) Trading frequency
 
Q 15. What is the primary objective of the Global Macro Investment Strategy?

a) Maximizing short-term profits

b) Achieving positive absolute returns across multiple markets

c) Minimizing diversification across asset classes

d) None of the above

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