NISM Series XIX-C AIF Managers Certification Exam - 4

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Q 1. Is the lock-in period applicable if the stressed loan is recovered from the borrower?

a) Yes

b) No

c) Only for half of the original lock-in period

d) Only if SEBI mandates it
 
Q 2. What due diligence requirements must the Special Situation Fund comply with for investors in stressed loans?

a) No due diligence required

b) Initial due diligence only

c) Continuous due diligence only

d) Due diligence only if the investment exceeds INR 1 crore
 
Q 3. What is one aspect that distinguishes alternative investment in real estate from general investment in personal properties?

a) Lower market risk

b) Higher liquidity

c) Involvement in property development companies

d) Limited investment avenues
 
Q 4. How are financial investments classified based on transferability of ownership?

a) Security and non-security form

b) Debt and equity

c) Primary and secondary markets

d) Listed and unlisted investments
 
Q 5. What is the potential benefit of alternative investments in terms of returns?

a) Guaranteed returns

b) Higher liquidity

c) Alpha return generation

d) Low complexity in contractual terms
 
Q 6. Which sector is emerging as a sunrise theme for alternative investment funds (AIFs)?

a) Traditional manufacturing

b) Automobile industry

c) Green energy and renewables

d) Mining and extraction
 
Q 7. What is the primary investment strategy of funds (FoFs) in the alternative investment space?

a) Direct investment in investee companies

b) Investing in traditional financial assets

c) Risk diversification by investing in several thematic funds

d) Pursuing active fund management
 
Q 8. Which investment option is primarily focused on generating stable cash flows?

a) Hedge Funds

b) Public equities

c) Alternative investments

d) Real estate investments
 
Q 9. What risk factor increases in the capital market due to longer investment horizons?

a) Credit risk

b) Market risk

c) Liquidity risk

d) Operational risk
 
Q 10. How did Eugene Fama categorize the overall Efficient Market Hypothesis (EMH) and its empirical tests?

a) Into three sub-hypotheses based on historical data

b) Into three sub-hypotheses based on future expectations

c) Into three sub-hypotheses based on information sets involved

d) Into three sub-hypotheses based on fundamental analysis
 
Q 11. What is one consequence of the mixed evidence regarding market efficiency?

a) Increased investor confidence

b) Decreased investor confidence

c) Elimination of market anomalies

d) Increased volatility in capital markets
 
Q 12. How does the strong form of the EMH contend with the ability of any group of investors to derive above-average risk-adjusted rates of return?

a) Any group of investors can consistently outperform the market

b) No group of investors should be able to derive above-average risk-adjusted rates of return

c) Only institutional investors can derive above-average returns

d) Only investors with insider information can derive above-average returns
 
Q 13. What characterizes a risk-averse investor's investment behavior?

a) They prefer investment opportunities with a negative expected risk premium.

b) They demand a higher risk premium to bear more risk.

c) They invest only in risk-free investment opportunities.

d) They disregard the risk-return profile of investment opportunities.
 
Q 14. Which institution evolved into a full-fledged private equity player in India?

a) World Bank

b) IMF

c) ICICI

d) World Trade Organization
 
Q 15. According to MPT, how do investors perceive two assets with equal rates of return but different levels of risk?

a) They prefer the asset with higher risk.

b) They consider both assets equally desirable.

c) They avoid both assets.

d) They disregard risk and focus solely on return.

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