NISM Series XIX-C AIF Managers Certification Exam - 48
NISM Series XIX-C AIF Managers Certification Exam - 48
Q 1. When should custodians for a scheme of an AIF be appointed?
a) After the first investment in the scheme
b) Before the first investment in the scheme
c) At the discretion of the fund manager
d) None of the above
Q 2. In the event of default on drawdown, what options does the fund agreement typically offer?
a) Increase the capital commitment
b) Reduce the management fees
c) Terminate the agreement and return the capital invested
d) Provide additional benefits to the investor
Q 3. What is the main advantage of pooling investment vehicles in jurisdictions with a good Bilateral Investment Promotion Agreement (BIPA) with India?
a) Tax exemption
b) Political stability
c) Wealth preservation
d) Enhanced market access
Q 4. What type of financing is an LBO considered?
a) Debt-free financing
b) Structured financing
c) Equity Financing
d) Angel investment
Q 5. Which stage of a company's lifecycle is typically perceived as less suitable for buyout transactions?
a) Seed stage
b) Growth stage
c) Maturity stage
d) Expansion stage
Q 6. How do sponsors utilize Feeder Funds in a Parallel Structure?
a) Feeder Funds are used to reduce regulatory oversight
b) Feeder Funds are used to offer guaranteed returns
c) Feeder Funds are used to provide access to exclusive investment opportunities
d) Feeder Funds are used to avoid tax obligations
Q 7. What is the main advantage of a Parallel Structure for investors?
a) Fixed returns
b) Limited investment options
c) Tax benefits for offshore investors
d) Mandatory lock-in period
Q 8. What type of investors might prefer investing through a feeder fund in a Master-Feeder Structure?
a) Domestic investors
b) Institutional investors
c) Foreign investors, such as those from Mauritius and Singapore
d) Banks and Insurance Companies
Q 9. What does VaR stand for?
a) Variable Asset Ratio
b) Value at Risk
c) Volatility Adjustment Rate
d) Value after Redemption
Q 10. What does High-Water Mark refer to in the context of Incentive Fees?
a) The highest point of fund performance since inception
b) The lowest point of fund performance since inception
c) The average return earned by the fund
d) The initial investment made by the investors
Q 11. Why are concentration risks a concern in fund management?
a) They increase portfolio diversification
b) They decrease the likelihood of sub-optimal exits
c) They expose the fund to excessive reliance on specific sectors or businesses
d) None of the above
Q 12. How are Incentive Fees beneficial for investors in the fund?
a) By increasing the overall cost of investment
b) By aligning the interests of the Investment Manager with the interests of the investors
c) By reducing the potential returns for the investors
d) By increasing the management overheads
Q 13. What does Distributed to Paid-in Capital (DPI) measure?
a) The total return generated by the fund
b) The amount of capital commitments made by investors
c) The proportion of capital invested by the fund
d) The timing of distributions made by the fund
Q 14. How is DPI calculated?
a) By dividing cumulative distributions to investors by paid-in capital
b) By dividing the total capital contributions by cumulative distributions
c) By dividing the total amount of committed capital by the PIC
d) By dividing total distributions by total capital contributions
Q 15. How are Incentive Fees allocated among investors?
a) Equally among all investors
b) Based on the tenure of investment
c) Pro-rata based on their value of investment in the fund
d) Randomly assigned
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