NISM Series XIX-C AIF Managers Certification Exam - 15

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Q 1. What type of investors are willing to invest in companies with "Product Market Fit"?

a) Venture capitalists

b) Banks

c) Retail investors

d) Private equity firms
 
Q 2. Which team usually conducts Business and Technical DDR?

a) Legal experts

b) Accounting firms

c) Investment bankers

d) None of the above
 
Q 3. What type of strategy involves taking a significant investment in an investee company to benefit from corporate events?

a) Convertible Arbitrage Strategy

b) Global Macro Strategy

c) Activist Strategy

d) Market-Neutral Strategy
 
Q 4. Who is entrusted with the overall supervision and oversight of the investment management functions of an AIF trust?

a) The sponsor

b) The manager

c) The trustee

d) The custodian
 
Q 5. Why do startups prefer private equity firms with a stronger brand presence?

a) To secure government contracts

b) To access cheaper loans

c) To gain market access at the right time

d) To minimize regulatory scrutiny
 
Q 6. Which of the following institutions may conduct due diligence on potential AIF investments?

a) Government agencies

b) Charitable organizations

c) Banks

d) All of the above
 
Q 7. What factors are considered in evaluating managers for potential investment?

a) The size of the fund only

b) The fund manager's academic qualifications only

c) The fund manager's regulatory compliance only

d) The fund manager's marketing strategies only
 
Q 8. What role do distributors play in the due diligence process?

A) They conduct due diligence on behalf of investors.

B) They market AIF investment products to potential investors.

C) They solely rely on fund managers for information.

d) They delegate the due diligence process to the fund offices.
 
Q 9. What does the presence of related parties in the fund structure indicate?

a) High investor returns

b) Regulatory compliance

c) Potential conflicts of interest

d) Outsourcing of due diligence
 
Q 10. What type of investors typically require access to the information contained in a PPM?

a) Retail investors

b) Institutional investors

c) Venture capitalists

d) Speculators
 
Q 11. What obligations do AIFs have regarding investors approaching through SEBI registered intermediaries charging fees?

a) They must charge an upfront distribution fee.

b) They must onboard such investors via Direct Plan only.

c) They must pay a placement fee to the intermediaries.

d) They must charge advisory fees directly to investors.
 
Q 12. Who conducts independent due diligence of all disclosures in the PPM?

a) Custodians

b) Trustees

c) Investment Managers or Sponsors

d) Merchant Banker
 
Q 13. What is the frequency at which Category I and Category II AIFs should value their investments?

a) Once every month

b) At least once every 6 months

c) Once every quarter

d) Once every two years
 
Q 14. How are money market instruments classified based on tenor?

a) By face value

b) By maturity

c) With coupon rate

d) By issuer credit rating
 
Q 15. What is one of the disadvantages of relative valuation?

a) It considers future capital expenditure and working capital requirements.

b) It is suitable for mature and stable companies.

c) The selection of multiples is objective.

d) It is less quantitative than the DCF approach.
 

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