NISM Series XIX-C AIF Managers Certification Exam - 42

Explore Additional Mock Tests Here

Q 1. What does the evidence on the Efficient Market Hypothesis (EMH) suggest about the efficiency of capital markets?

a) All capital markets are efficient

b) No capital markets are efficient

c) Some capital markets are efficient while others are not

d) Capital markets are never efficient
 
Q 2. According to the semi-strong form of the EMH, can investors derive above-average risk-adjusted returns based on public information?

a) Yes

b) No

c) Only with sophisticated strategies

d) Only with historical information
 
Q 3. How does the weak-form Efficient Market Hypothesis (EMH) impact the relevance of technical analysis?

a) Enhances its effectiveness

b) Renders it completely irrelevant

c) Provides limited support for its effectiveness

d) Strengthens its predictive power
 
Q 4. How does the semi-strong form of the EMH view the role of public information in stock pricing?

a) It has no role in stock pricing

b) It is the sole determinant of stock pricing

c) It is one of the determinants of stock pricing

d) It determines insider trading activities
 
Q 5. What does a straight line connecting the returns of two perfectly correlated securities on a risk-return graph indicate?

a) There is no possibility for risk diversification when combining the two securities in any proportion.

b) It is possible to create a portfolio with a higher return than that of security B and a lower risk than that of security A.

c) The portfolio's risk is greater than the weighted average risk of the securities.

d) The securities have a negative correlation.
 
Q 6. What distinguishes the utility from the risk-to-reward ratio or Sharpe Ratio in evaluating investment attractiveness?

a) Utility considers investors' risk aversion, unlike the risk-to-reward ratio or Sharpe Ratio.

b) Utility ignores the risk-return profile of investments.

c) The risk-to-reward ratio or Sharpe Ratio assigns utility scores based on unique risk aversion.

d) The risk-to-reward ratio or Sharpe Ratio measures risk without considering a return.
 
Q 7. What is the variance of the return measure for a portfolio?

a) The average return of the portfolio

b) The expected return of the portfolio

c) The dispersion of returns around the expected value

d) The standard deviation of historical returns
 
Q 8. What tendency have some studies observed regarding the regression of betas over time?

a) High-beta portfolios tend to decrease, while low-beta portfolios tend to increase

b) High-beta portfolios tend to increase, while low-beta portfolios tend to decrease

c) All portfolios tend to converge to a beta of 1.00 over time

d) Beta remains constant over time for all portfolios
 
Q 9. According to capital market theory, what happens if an asset has a higher weight in the M portfolio than its market value justifies?

a) Its price decreases

b) Its price remains unchanged

c) Its price increases

d) It becomes less diversified
 
Q 10. What is the primary focus of Capital Market Theory?

a) Maximizing returns

b) Minimizing transaction costs

c) Understanding how risk affects expected return

d) Eliminating market inefficiencies
 
Q 11. Which of the following types of funds are explicitly excluded from the definition of Alternative Investment Funds (AIFs)?

a) Mutual funds and hedge funds

b) Family trusts and holding companies

c) Pension funds and sovereign wealth funds

d) Venture capital funds and private equity funds
 
Q 12. How do Private Equity Funds differ from Venture Capital Funds in terms of investment stage?

a) Private Equity Funds focus on early-stage investments, while Venture Capital Funds focus on later-stage financing

b) Private Equity Funds focus on later-stage financing, while Venture Capital Funds focus on early-stage investments

c) Both focus on early-stage investments

d) Both focus on mid-stage investments
 
Q 13. How did foreign investors primarily invest in Indian securities markets through hedge funds?

a) Direct investment only

b) Through mutual funds

c) Through exchange-traded funds (ETFs)

d) Through government bonds
 
Q 14. What is the primary reason for HNI investors and institutional investors to diversify their portfolios with alternative investments?

a) To achieve higher returns than traditional investments

b) To avoid regulatory restrictions on traditional investments

c) To concentrate their investments in one asset class

d) To reduce investment fees and expenses
 
Q 15. What is the role of return attribution in portfolio management?

a) Identifying sources of risk in the portfolio

b) Minimizing risk for a given return

c) Maximizing return at a given risk level

d) Calculating the NAV of the portfolio

Explore Additional Mock Tests Here