NISM Series XIX-C AIF Managers Certification Exam - 44
NISM Series XIX-C AIF Managers Certification Exam - 44
Q 1. What is the implication if the yearly returns of an absolute-return fund exceed the predetermined rate specified by the investment manager?
a) The fund has underperformed
b) The fund has outperformed
c) The fund has matched the benchmark
d) The benchmark needs to be revised
Q 2. What currency terms shall the performance data and benchmarks be reported in?
a) Only in INR
b) Only in USD
c) Both in INR and USD
d) Pound Sterling only
Q 3. What does alpha represent in the CAPM method of computing AIF performance?
a) The systematic risk of the AIF.
b) The market risk premium.
c) The risk-free rate of return.
d) The volatility of the AIF's returns.
Q 4. How is the annualized traded value calculated?
a) By taking the median of the monthly averages of the daily traded values
b) By taking the average of the monthly medians of the daily traded values
c) By taking the median of the monthly medians of the daily traded values
d) By taking the mean of the monthly means of the daily traded values
Q 5. What is the first step in the deal pipeline of private equity?
a) Signing an NDA
b) Initial due diligence
c) Investment proposal
d) Final due diligence
Q 6. What factors should the Board of Directors consider when reviewing reports and information from the investment management team?
a) Compliance with the personal interests of board members
b) Fund performance, portfolio composition, investment strategies, and statutory compliance
c) Maximizing personal remuneration packages for directors
d) Avoiding engagement with investors
Q 7. What potential downside does a zero Beta not mitigate in the Market-Neutral Strategy?
a) Market risk
b) Systematic risk
c) Liquidity risk
d) Operational risk
Q 8. What risk can increase in the Market-Neutral Strategy due to excessive leverage and concentrated positions?
a) Market risk
b) Systematic risk
c) Liquidity risk
d) Operational risk
Q 9. What action is taken by the private equity firm during the signing of the Shareholder Agreement and Share Subscription Agreement?
a) Finalizing the start-up's marketing strategy
b) Handing over the investment amount
c) Drafting legal agreements
d) Finalizing the start-up's valuation
Q 10. What is one reason private equity firms closely observe the marketing and PR activities of investee companies?
a) To assess employee satisfaction
b) To monitor regulatory compliance
c) To analyze customer demographics
d) To track technological advancements
Q 11. How are target stocks evaluated in the Long-Short Equity Strategy?
a) Technical analysis only
b) Fundamental analysis only
c) Macro-economic factors only
d) Fundamental analysis and macro-economic factors
Q 12. Which of the following is NOT considered a stakeholder in a Private Equity deal?
A) Government agencies
B) High net-worth individuals
C) Institutional investors
d) Competitor companies
Q 13. What is the rationale behind Co-sale and Tag Along Rights?
a) To simplify the selling process for shareholders
b) To make shares more difficult to sell by requiring potential purchasers to buy additional shares
c) To ensure that shareholders receive the highest possible price for their shares
d) None of the above
Q 14. What is the primary focus of private equity deal sourcing?
a) Investing in publicly listed companies
b) Investing in government bonds
c) Finding new companies to invest in
d) Finding companies for venture capital funding
Q 15. What is the responsibility of the Manager and key management personnel regarding correspondence and understanding during a deal?
A) They should avoid documenting correspondence to minimize paperwork
B) They should document all relevant correspondence and understanding during a deal
C) They should delegate the responsibility to junior staff
d) They should rely on verbal agreements to expedite the deal process
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