NISM Series XIX-C AIF Managers Certification Exam - 29

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Q 1. How is Mean (ï R) calculated?

a) By summing the returns and dividing by the total number of observations

b) By taking the median of the returns

c) By finding the mode of the returns

d) By multiplying all the returns together
 
Q 2. How long is the investment period for the Alpha Fund's new scheme?

a) 1 year

b) 2 years

c) 3 years

d) 5 years
 
Q 3. What is the additional returns (carry) percentage for the Alpha Fund's new scheme?

a) 10%

b) 15%

c) 20%

d) 30%
 
Q 4. What is the primary difference between Gross IRR and Net IRR?

a) Gross IRR accounts for fund-level expenses, while Net IRR does not.

b) Gross IRR calculates returns before deducting expenses, while Net IRR calculates returns after deducting expenses.

c) Gross IRR includes taxes, while Net IRR excludes them.

d) Gross IRR measures returns since the fund's inception, while Net IRR measures returns since the last distribution date.
 
Q 5. How are distributions handled in the Alpha Fund's new scheme from Y4 onwards?

a) No distributions

b) Distributed annually

c) Distributed quarterly

d) Distributed semi-annually
 
Q 6. What is the Paid-in Capital (PIC) Multiple measure?

a) The total return generated by the fund

b) The amount of capital commitments made by investors

c) The proportion of capital invested by the fund

d) The timing of distributions made by the fund
 
Q 7. How are Transaction Expenses typically allocated among investors in an AIF?

a) Based on the fund's performance

b) Pro-rata across all classes of units, based on Capital Contributions or NAV

c) Equally among all investors

d) Based on the tenure of the investment
 
Q 8. What does Gross IRR represent in the calculation of investment returns?

a) Returns at the investor level

b) Returns before deducting expenses

c) Returns after deducting expenses

d) Returns after taxes are paid
 
Q 9. What is the frequency at which Management Fees are usually paid?

a) Daily

b) Weekly

c) Monthly

d) Irregularly
 
Q 10. Why does the risk of fundamental analysis exist in AIF investments?

a) Due to market volatility

b) Due to the speculative nature of investments

c) Because all factors affecting an investment may not be known

d) None of the above
 
Q 11. How does IRR handle the timing of cash flow in investment analysis?

a) It assigns equal weight to all cash flows

b) It computes the time-weighted return for each investment

c) It calculates the average return over the holding period

d) It only considers cash flow at the end of the investment period
 
Q 12. What potential consequence arises if the investment manager cannot continue to manage the fund?

a) Liquidation of the fund's assets

b) Increase in investor control over the fund

c) Decrease in investment risks

d) None of the above
 
Q 13. What potential risks are associated with fund management in AIF investments?

a) Lack of transparency

b) Concentration risks

c) Sub-optimal exits

d) None of the above
 
Q 14. Which category of investors includes family offices, high net-worth individuals, and ultra-high-net-worth individuals?

a) Institutional Investors

b) Non-Institutional Investors

c) Retail Investors

d) None of the above
 
Q 15. What does the pure time value of money represent?

a) Compensation for expected inflation

b) Risk premium for uncertainty

c) Rate of return demanded regardless of inflation and risk

d) Rate of return guaranteed by investments


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