NISM Series XIX-C AIF Managers Certification Exam - 23

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Q 1. When were the SEBI (Venture Capital Fund) Regulations 1996 notified?

a) 1992

b) 1994

c) 1996

d) 2000
 
Q 2. How is beta interpreted in the market portfolio?

a) A beta of 1 means the security's returns covariate equally with the market portfolio

b) A beta of 1 means the security is risk-free

c) A beta of 1 means the security's returns are independent of the market portfolio

d) A beta of 1 means the security is more volatile than the market portfolio
 
Q 3. Which sector initially dominated private equity investments in India?

a) Healthcare

b) Information Technology

c) Manufacturing

d) Energy
 
Q 4. What types of funds are included in Category I AIF?

a) Funds that invest primarily in government securities

b) Funds that invest in start-ups, early-stage ventures, social ventures, SMEs, infrastructure, or other sectors considered socially or economically desirable

c) Funds that employ diverse or complex trading strategies

d) Funds that invest primarily in publicly traded stocks
 
Q 5. What financial instruments are Category III AIFs allowed to use for leveraging and hedging purposes?

a) Stocks and bonds

b) Commodities and currencies

c) Futures and Options (F&O) contracts, structured products, margin trading, and arbitrage strategies

d) Mutual funds and ETFs
 
Q 6. How does the minimum corpus requirement for starting PMS compare to Category III AIF?

a) PMS has a minimum corpus requirement, while Category III AIF does not.

b) Both PMS and Category III AIF have a minimum corpus requirement.

c) Category III AIF has a minimum corpus requirement, while PMS does not.

d) There is no minimum corpus requirement for either PMS or Category III AIF.
 
Q 7. What is drawdown in the context of fund management?

a) A process of withdrawing funds from the market

b) A process of calling capital commitment from investors

c) A process of distributing profits to investors

d) A process of reducing management fees
 
Q 8. How are management fees typically calculated after the commitment period for Category III AIFs?

a) Fixed percentage of committed capital

b) Fixed percentage of the actual invested capital

c) Fixed percentage of the total fund size

d) None of the above
 
Q 9. If an AIF scheme closes with a total capital commitment of INR 1000 crore and the total drawdown amount at a given time is INR 650 crore, what is the "Invested Capital"?

a) INR 1000 crore

b) INR 650 crore

c) INR 350 crore

d) INR 500 crore
 
Q 10. Which of the following qualifications is NOT required for a trustee in an AIF?

a) Ability

b) Integrity

c) Experience in investment management

d) Compliance with securities laws
 
Q 11. Why is it important for investors to review the PPM before investing?

a) To ensure compliance with government regulations

b) To determine the management fee

c) To understand the fund's investment strategy

d) To maximize their returns
 
Q 12. What is the purpose of SEBI's Business Responsibility and Sustainability Reporting (BRSR) initiative?

a) To reduce the reporting burden on listed entities

b) To mandate non-financial reporting by corporate India

c) To eliminate environmental regulations

d) To minimize the role of ESG factors in investment decisions
 
Q 13. What role do merchant bankers play in the launch of schemes by AIFs?

a) Conducting investment research

b) Provide legal advice

c) Filing Private Placement Memorandum (PPM) with SEBI

d) None of the above
 
Q 14. What are the two types of waterfall structures commonly used in distribution terms?

a) American and European

b) Asian and African

c) Northern and Southern

d) Antarctic and Arctic
 
Q 15. Why might fund structures require complex legal agreements?

a) To manage trade execution platforms effectively

b) To calculate tax liabilities accurately

c) To address the interests of various stakeholders

d) None of the above

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