NISM Series XIX-C AIF Managers Certification Exam - 40

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Q 1. In which situations are AIFs exempt from the minimum prescribed PPM disclosures and audit requirements?

a) When AIFs are registered with SEBI

b) When AIFs raise capital contributions below INR 70 crore

c) When AIFs have not raised any money from investors

d) When AIFs invest only in angel funds
 
Q 2. Which statement accurately reflects the role of SEBI regarding PPMs?

a) SEBI approves all PPMs submitted to them.

b) SEBI takes responsibility for the accuracy of information in PPMs.

c) SEBI provides observations on PPMs but does not approve them.

d) SEBI has no involvement in the PPM submission process.
 
Q 3. What is the primary purpose of using mark-to-market valuation for debt instruments?

a) To increase discretion for managers

b) To hide potential default risks

c) To increase potential profits

d) To reduce market volatility
 
Q 4. What should the Investment Manager do if valuation policies do not result in a fair valuation?

a) Ignore the deviation

b) Deviate from such policies

c) Seek approval from investors

d) Change the valuation methodology
 
Q 5. How many different methods are identified in the IPEV Guidelines to value a portfolio company?

a) Five

b) Six

c) Seven

d) Ten
 
Q 6. According to the principles of valuation, why is valuation considered time-specific?

a) Because the value of a business depends only on its past performance

b) Because the value of a business changes depending on various factors such as cash flow and earnings

c) because the value of a business remains constant over time

d) Because the value of a business is not influenced by future cash flows
 
Q 7. What type of options contract gives the buyer the right, but not the obligation, to buy the underlying asset?

a) Call option

b) Put the option

c) Stock option

d) None of the above
 
Q 8. When did India sign the Multilateral Instrument (MLI) to modify its existing tax treaties?

a) 2013

b) 2015

c) 2017

d) 2021
 
Q 9. How are Series Liabilities allocated among all Series of units?

a) Equally

b) In proportion to the Opening Series NAV

c) Based on the number of units issued in each Series

d) Randomly
 
Q 10. What method can be used by Non-resident Investors to determine the Fair Market Value (FMV) of CCPS?

a) Comparable Company Multiple Method

b) Replacement Cost Method

c) Net Asset Value Method

d) Weighted Average Cost of Capital (WACC) Method
 
Q 11. How are Fund Expenses that are not specifically attributable to a Series allocated?

a) Equally among all Series of units

b) In proportion to the Opening Series NAV

c) Based on the number of units issued in each Series

d) Randomly
 
Q 12. Who ensures that all decisions of the AIF comply with the provisions of the AIF Regulations and other applicable laws?

a) Custodian

b) Investment Manager

c) Compliance Officer

d) Sponsor
 
Q 13. What information is provided in the "sector-specific discussion (micro level, trends, etc.)" section of fund reporting templates?

- A) Business performance of individual companies

- B) GDP growth and macroeconomic indicators

- C) Regulatory changes affecting the industry

- d) Transaction details of deals executed by the fund
 
Q 14. Besides maximizing returns, what other benefits does fund monitoring provide?

a) Reducing investment costs

b) Screening interesting investment opportunities

c) Eliminating the need for due diligence

d) Lowering regulatory requirements
 
Q 15. Which exit option is considered the least preferred and the worst-case scenario?

- A) Offer for Sale through an Initial Public Offer (IPO)

- B) Strategic Sale (M&A Exit)

- C) Corporate/Promoter Buyback

- d) Secondary Sale (Trade Sale)

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