NISM Series XIX-C AIF Managers Certification Exam - 26

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Q 1. What does the Burn Rate measure?

a) Cash generated from a start-up's core business operations

b) Profitability of an investment relative to its cost

c) Rate at which a start-up spends its cash flows

d) Average revenue per order
 
Q 2. How is the value of a fixed income-bearing instrument such as a bond or debenture represented?

a) As the sum of future cash flows

b) As the sum of future cash flows is divided by the discounting rate

c) As the present value of future cash flows plus the present value of the principal amount

d) The sum of future cash flows raised to the power of the discounting rate
 
Q 3. Which method may be applied when the investee company is not performing satisfactorily and incurring losses, according to the IPEV Guidelines?

a) Price of the previous transaction

b) Net asset valuation (NAV)

c) Multiples Approach

d) Scenario analysis
 
Q 4. How is the equity value of the company calculated using the DCF methodology?

a) By deducting the market value of assets from the present value of the business

b) By deducting the total debt of the company from the present value of the business

c) By adding the outstanding debt of the company to the present value of the business

d) By dividing the current value of the business by the number of outstanding equity shares
 
Q 5. What action must be taken if an AIF scheme fails to obtain requisite investor consent for launching a Liquidation Scheme or making in-specie distribution?

a) Hold the investments indefinitely

b) Liquidate the investments immediately

c) Mandatorily distribute investments in-specie at market value

d) Seek approval from SEBI for an alternative approach
 
Q 6. What is the minimum percentage of the value of unliquidated investments for which bids must be arranged during in-specie distribution?

a) 10%

b) 15%

c) 20%

d) 30%
 
Q 7. What provisions do the AIF Regulations offer to investors in the event of material changes or change of control in the AIF?

- A) Mandatory exit option for investors for any of the specified reasons

- B) Option to renegotiate terms with the fund manager

- C) Automatic termination of the investment management agreement

- d) None of the above
 
Q 8. What options are available to an AIF during the liquidation period of a scheme for distributing investments that are not sold due to lack of liquidity?

- A) In-specie distribution to investors.

- B) Transfer of unsold investments to another AIF.

- C) Distribution of investments to the manager or sponsor.

- d) Selling investments to unrelated third parties.
 
Q 9. What is the purpose of disclosing the value of unliquidated investments to investors?

a) To ensure compliance with SEBI regulations

b) To evaluate the performance of the AIF scheme manager

c) To report to Performance Benchmarking Agencies

d) To attract more investors
 
Q 10. What determines the tax treatment for income earned by a Category III AIF?

a) The size of the AIF

b) The location of the AIF

c) The stream of income earned

d) The type of investments held
 
Q 11. What deduction is allowed for interest expenditure incurred to earn dividend income in a Category III AIF?

a) 15% of total dividend income

b) 20% of total dividend income

c) 25% of total dividend income

d) No deduction allowed
 
Q 12. What does section 90(1) of the Indian Income Tax Act emphasize regarding tax treaties?

a) Maximizing tax benefits for residents of other countries

b) Minimizing tax evasion and avoidance through tax treaties

c) Allowing for opportunities for non-taxation or reduced taxation

d) None of the above
 
Q 13. Which regulatory body issues modalities for FPI investments under FEMA?

a) RBI

b) SEBI

c) CBDT

d) None of the above
 
Q 14. What is the rate of Securities Transaction Tax (STT) payable by the seller for the sale of unlisted shares under an offer for sale to the public?

a) 0.1%

b) 0.2%

c) 0.125%

d) N.A.
 
Q 15. Under which circumstances does the ITA provide for the levy of MAT on domestic companies?

a) If the tax calculated at the rate of 10% is higher than the tax calculated under normal provisions

b) If the tax calculated at the rate of 15% of the book profits is higher than the tax calculated under normal provisions

c) If the company's turnover exceeds a certain threshold

d) None of the above

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