NISM Series XIX-C AIF Managers Certification Exam - 5

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Q 1. What does a "final close" signify in the context of AIFs?

a) End of investment opportunities

b) The end of the fund's investment strategy

c) Acceptance of subsequent contributions from investors

d) Unlimited fundraising period
 
Q 2. What relationship should not influence the bias of a staff member towards the result of a transaction in an AIF?

a) Personal

b) Professional

c) Family

d) None of the above
 
Q 3. When were ESG indices first launched in the United States?

a) In the early 2000s

b) In the late 1980s

c) In the early 1990s

d) In the late 1990s
 
Q 4. How is Corporate Venture Capital (CVC) different from traditional venture capital (VC)?

a) CVC involves the pooling of funds from multiple investors, while VC is an on-balance sheet investment by a corporate entity

b) CVC involves strategic investment by a company in any domain, while VC is limited to financial industry investments

c) CVC is focused on large firms investing in small, innovative firms, while VC involves small firms investing in large, established firms

d) None of the above
 
Q 5. What role do Fund Administrators play in supporting Managers of AIFs?

a) Making investment decisions

b) Maintain fund books and records

c) Marketing the fund to potential investors

d) None of the above
 
Q 6. Under which waterfall structure are distributions made pro rata to investors?

a) American Waterfall

b) European Waterfall

c) Asian Waterfall

d) Antarctic Waterfall
 
Q 7. In an open-ended fund structure, investors can:

a) Only invest capital during a fixed period

b) Only redeem capital during a fixed period

c) Buy or sell units at any time

d) Only redeem capital quarterly
 
Q 8. How does pooling contribute to risk diversification in investment management?

a) By increasing individual risk exposure

b) By combining individual corpuses

c) By avoiding diversified portfolios

d) By encouraging speculative investments
 
Q 9. How does pooling contribute to economies of scale in investment management?

a) By reducing individual risk exposure

b) By increasing investor liability

c) By combining individual corpuses

d) By enhancing tax optimization
 
Q 10. Offshore funds are structured to invest in markets outside the investor's home country primarily to:

a) Increase regulatory oversight

b) Avoid tax obligations

c) Limit investment opportunities

d) Provide guaranteed returns
 
Q 11. Why is it essential for the corpus of an AIF trust to be divided into unit capital?

a) To facilitate investment management decisions

b) To ensure regulatory compliance

c) To allow for tax optimization

d) To limit risk exposure
 
Q 12. Who can direct investors to a Master-Feeder Structure?

a) Only institutional investors

b) Only domestic investors

c) Only foreign investors

d) Only government entities
 
Q 13. Which of the following is NOT a reason for private equity funds to indulge in buyout transactions?

a) Increasing risk concentration

b) Taking advantage of undervalued listed companies

c) Transforming sub-optimal capital structures

d) Gaining control of investee companies
 
Q 14. How can changes in regulatory provisions impact fund performance?

a) They may lead to increased returns

b) They may not affect returns

c) They may adversely affect returns

d) None of the above
 
Q 15. What is the role of GIPS in enhancing comparability across different investment firms?

a) Standardizing performance calculations and presentations

b) Maximizing profits for investment firms

c) Providing tax incentives for investors

d) None of the above

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