NISM Series XIX-C AIF Managers Certification Exam - 45

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Q 1. When should an AIF disclose the Investor Charter for new schemes?

a) In the annual financial report

b) At the time of registration with SEBI

c) At least 30 days before the launch of the scheme

d) At the time of redemption of units
 
Q 2. What is the purpose of the Distribution Agreement between the Investment Manager and the distributor?

a) To outline the investment strategy of the AIF

b) To define the role of the distributor and establish a Code of Conduct

c) To increase operational costs for the AIF

d) To avoid regulatory compliance
 
Q 3. What is the primary function of the local investment advisor in an offshore fund structure?

a) To manage offshore investor relations

b) To execute offshore investment transactions

c) To provide legal advice on offshore regulations

d) To oversee custodial services for offshore assets
 
Q 4. How are securities valued for which valuation norms are prescribed under SEBI (Mutual Funds) Regulations, 1996?

a) As per the discretion of the Investment Manager

b) As per the valuation guidelines endorsed by any AIF industry association

c) As per the regulations set forth by SEBI (Mutual Funds) Regulations, 1996

d) As per the recommendations of the Investment Manager
 
Q 5. How often should the Net Asset Value (NAV) be disclosed for closed-ended AIFs?

a) Quarterly basis

b) Monthly basis

c) Daily basis

d) None of the above
 
Q 6. Which approach is considered more reliable and transparent for valuing debt instruments?

a) Amortized cost

b) Historical cost

c) Book value

d) Discounted cash flow
 
Q 7. In which scenario does the 'Price to Book Value Multiple' provide a better measure of value?

a) When EBITDA is negative

b) When profit after tax (PAT) is positive

c) When the company is in a mature phase

d) When the company is asset-light
 
Q 8. Which method is typically used to value seed, start-up, or early-stage investments according to the IPEV Guidelines?

a) Price of the previous transaction

b) Net asset value (NAV)

c) Multiple Approach

d) None of the above
 
Q 9. What does Operating Cash Flow measure?

a) Cash generated from a start-up's core business operations

b) Profitability of an investment relative to its cost

c) Rate at which a start-up spends its cash flows

d) Average revenue per order
 
Q 10. What are the main approaches to business valuation mentioned in the text?

a) Historical valuation, income approach, and cost approach

b) Market approach, cost approach, and asset-based approach

c) Discounted Cash Flow (DCF) analysis, market approach, and relative valuation

d) Relative valuation, income approach, and discounted cash flow analysis
 
Q 11. What does the DCF methodology aim to find?

a) The future cash flow of a company

b) The historical cash flow of a company

c) The present value of the free cash flow of a company

d) The total debt of a company
 
Q 12. What is used for valuing Corporate Debt Securities?

a) Face value

b) Book value

c) Closing prices on recognized stock exchanges

d) Coupon rates
 
Q 13. How does the illiquidity of an AIF impact investor reactions to different situations?

a) It limits the ability to react quickly

b) It increases investor flexibility

c) It decreases investment opportunities

d) It simplifies decision-making processes
 
Q 14. What information is typically included in the "Cash and exit performance in maturity years" section of fund reporting?

a) Regulatory changes affecting the industry

b) Quarterly financial statements
c) Market forecasts

d) Changes in management within the fund
 
Q 15. What is the provision for extending the fund life in the event of unliquidated investments during the winding down phase of the scheme/fund?

- A) The fund life can be extended for up to 3 years subject to approval by two-thirds of the investors by the value of their investment in the fund

- B) The fund life can be extended for up to 5 years subject to approval by three-fourths of the investors by the value of their investment in the fund

- C) The fund life can be extended for up to 2 years subject to approval by two-thirds of the investors by the value of their investment in the fund

- D) The fund life can be extended indefinitely without requiring investor approval
 
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