NISM Series XIX-C AIF Managers Certification Exam - 43
NISM Series XIX-C AIF Managers Certification Exam - 43
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Q 1. Which regulation governs the remittance of funds abroad by Indian residents?
a) Foreign Investment Promotion Act
b) Foreign Exchange Management Act, 1999 (FEMA)
c) Securities and Exchange Board of India (SEBI)
d) Income Tax Act
Q 2. What type of financing is characterized by special-purpose acquisition vehicles?
a) Venture capital financing
b) Private equity financing
c) Leveraged Buy-out (LBO)
d) Angel investment
Q 3. Which of the following is NOT an advantage of pooling in investment management?
a) Customized investment outcomes
b) Economies of scale
c) Risk diversification
d) Higher individual returns
Q 4. What type of regulations apply to a Pure Offshore Structure?
a) AIF Regulations
b) FVCI Regulations
c) AIF Regulations and FVCI Regulations
d) SEBI Regulations
Q 5. What is a characteristic feature of Leveraged Buy-outs (LBOs)?
a) Minimal use of leverage
b) Large acquisition price
c) Public ownership structure
d) Limited risk of default
Q 6. What type of financing falls under the category of special situation financing and is a form of structured financing?
a) Leveraged Buy-out (LBO)
b) Management Buy-out (MBO)
c) Initial Public Offering (IPO)
d) Angel investment
Q 7. What is the purpose of Hurdle Rate in computing Incentive Fees?
a) To set a minimum return threshold before Incentive Fees are paid
b) To determine the maximum Incentive Fee percentage
c) To calculate the total management fees
d) To assess the risk tolerance of investors
Q 8. Which of the following Skewness values indicates a negatively skewed distribution?
a) 0.5
b) 1
c) 0
d) -0.5
Q 9. What is the primary reason for charging Performance Fees to investors?
a) To cover operational expenses of the fund
b) To provide additional income to the Investment Manager
c) To align the interests of the Investment Manager with the interests of the investors
d) To reduce the net asset value of the fund
Q 10. Why are fund exits important in managing investment risks?
a) They help in minimizing regulatory risks
b) They enable the fund to diversify its portfolio
c) They facilitate the realization of investment returns
d) None of the above
Q 11. How might higher inflation impact economic activity in India and potentially affect AIFs?
a) Increase in investment opportunities
b) Decrease in regulatory reforms
c) Adoption of corrective measures to moderate growth
d) None of the above
Q 12. How are Operating Expenses typically charged to investors in an AIF?
a) Based on the fund's performance
b) Pro-rata based on the value of their total capital commitments in the fund
c) Equally among all investors
d) Based on the tenure of investment
Q 13. Why is deciding on the appropriate Hurdle Rate critical for both investors and Investment Managers?
a) To guarantee a minimum return to investors
b) To minimize operational expenses
c) To benchmark investor expectations and align the interests of investors and Investment Managers
d) To discourage investment in the fund
Q 14. How are Management Fees typically calculated in Category III AIFs?
a) As a fixed percentage of Gross Net Asset Value
b) As a fixed percentage of Committed Capital
c) Based on the actual invested capital
d) As a percentage of future profits
Q 15. What factors determine the effectiveness of a clawback clause?
a) The fund's assets under management
b) The manager's ability to refund excess returns
c) The duration of the investment
d) None of the above