NISM Series XIX-C AIF Managers Certification Exam - 38
NISM Series XIX-C AIF Managers Certification Exam - 38
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Q 1. In a Parallel Structure, what advantage do investors have in terms of selecting investments?
a) Investors have no control over investment selection
b) Investors can independently choose underlying investments
c) Investors are required to participate in all underlying investments
d) Investors have limited access to investment options
Q 2. Which of the following is true regarding closed-end funds?
a) Investors can redeem capital at any time
b) Commitment periods typically range from 1-2 years
c) Have a variable maturity period
d) Offer continuous units to investors
Q 3. What is a significant risk associated with LBO structures?
a) Regulatory compliance
b) Minimal leverage
c) Default and bankruptcy
d) Limited risk concentration
Q 4. What are the two key return metrics commonly used by investors when analyzing investments?
a) Internal Rate of Return (IRR) and Return on Equity (ROE)
b) Return on Investment (ROI) and Return on Assets (ROA)
c) Return on Investment (ROI) and Internal Rate of Return (IRR)
d) Net Present Value (NPV) and Internal Rate of Return (IRR)
Q 5. What is the formula for the Treynor ratio?
a) (Portfolio Return - Risk-free Return) / Portfolio Standard Deviation
b) (Portfolio Return - Risk-free Return) / Portfolio Beta
c) Portfolio Return / Portfolio Beta
d) None of the above
Q 6. How are investment management firms, including AIFs, required to report performance under GIPS?
a) By providing only gross returns
b) By presenting the performance for each scheme
c) By reporting the consolidated performance of all schemes in different composites
d) None of the above
Q 7. What is the minimum period for which an AIF should present GIPS-compliant performance?
a) 1 year
b) 3 years
c) 5 years
d) None of the above
Q 8. When will the Green shoe option become available for the Alpha Fund's new scheme?
a) Year Y0
b) Year Y1
c) Year Y2
d) Year Y4
Q 9. What does a kurtosis value greater than 3 indicate about the distribution of returns?
a) The distribution is perfectly symmetrical
b) The distribution is negatively skewed
c) The distribution is positively skewed
d) The distribution has higher peakedness
Q 10. How is VaR defined?
a) Maximum expected profit
b) Maximum expected loss
c) Average market return
d) Probability of positive returns
Q 11. What are Trusteeship Fees in an AIF primarily used for?
a) To cover one-time establishment costs
b) To pay for ongoing management fees
c) To provide additional income to the Investment Manager
d) To invest in portfolio companies
Q 12. What does performance risk cover in the context of AIF investments?
a) Loss of investment value
b) Uncertainty in achieving investment objectives
c) Unsuccessful investment outcomes
d) None of the above
Q 13. How do investors' commitments and timelines affect Management Fees?
a) They do not affect Management Fees
b) Higher commitments result in lower Management Fees
c) Higher commitments result in higher Management Fees
d) Longer timelines result in lower Management Fees
Q 14. Why do Investment Managers prefer a high Catch-up Rate?
a) To minimize their share of profits
b) To decrease the total profits earned by the fund
c) To discourage investment in the fund
d) To reduce operational expenses
Q 15. In what scenarios are Incentive Fees calculated for Category I and Category II AIFs?
a) After every investment made by the fund
b) Quarterly
c) After every exit from portfolio companies
d) Bi-annually