NISM Series XIX-C AIF Managers Certification Exam - 6

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Q 1. How many distinct rating segments are covered by the NIFTY Corporate Bond Indices?

a) 2

b) 3

c) 4

d).6
 
Q 2. When comparing two investments against the same benchmark, which asset is preferable according to the Sharpe ratio?

a) The asset with a higher return

b) The asset with a lower return

c) Assets with a higher Sharpe ratio

d) None of the above
 
Q 3. What factors determine business risk?

a) Means of financing assets

b) Nature of the firm's business

c) Sales volatility and operating leverage

d) Interest rates
 
Q 4. How does the existence of a securities market benefit both issuers and investors?

a) It allows issuers to raise funds at a lower cost and provides investors with guaranteed returns

b) It enables issuers to reach a broader group of investors and allows investors to convert their savings into financial assets

c) It provides issuers with voting rights and gives investors access to management teams

d) It restricts the types of securities available to investors and limits the capital-raising options for issuers
 
Q 5. How is the real risk-free rate of interest calculated?

a) By subtracting the inflation rate from the nominal rate of return

b) By adding inflation rate to the nominal rate of return

c) By dividing the nominal rate of return by the inflation rate

d) By subtracting the risk premium from the nominal rate of return
 
Q 6. What is geopolitical risk?

a) Volatility of returns caused by changes in exchange rates

b) Volatility of returns due to political changes

c) Volatility of returns due to regulatory changes

d) Volatility of returns due to tensions between states
 
Q 7. What term is used for the real risk-free rate for inflation expectations?

a) Pure rate of interest

b) Nominal risk-free rate

c) Expected return

d) Required rate of return
 
Q 8. What is the main difference between a price index and a Total Returns Index?

a) The price index includes dividend receipts, whereas the Total Returns Index does not.

b) The Total Returns Index considers only capital gains, whereas the price index includes dividends.

c) The price index reflects only capital gains, whereas the Total Returns Index includes dividend receipts.

d) The price index reflects both capital gains and dividends, whereas the Total Returns Index reflects only capital gains.
 
Q 9. Who typically chooses the benchmark for a segregated account, according to the CFA Institute?

a) The investment manager

b) The firm

c) The client, prospective client, or consultant

d) The government
 
Q 10. What is the role of SEBI regarding benchmarking agencies for AIFs?

a) To mandate the formation of industry benchmarks

b) To recommend specific benchmarking agencies

c) Develop an industry benchmark and recommend the formation of market-wide benchmarking agencies

d) To oversee the confidentiality of data reported by AIFs
 
Q 11. What aspects are used to create benchmarks for Category I and Category II AIFs?

a) Vintage years and pooled IRR only

b) Investment multiples only

c) Ratios such as DPI, RVPI, and TVPI only

d) None of the above
 
Q 12. How are weights assigned to constituent securities in a value-weighted index?

a) Based on individual security prices

b) Based on individual security earnings

c) Based on individual security sales

d) Based on individual security return on equity
 
Q 13. At what stage of funding does an entrepreneur typically seek support from start-up incubators?

a) Pre-seed Capital

b) Seed capital

c) Series A funding

d) Series C funding
 
Q 14. What role do co-investments play in the AIF investment paradigm?

A) They are optional and rarely utilized by investors

B) They allow investors to invest directly into the investee company alongside the AIF

C) They are primarily used by offshore investors to avoid pooling funds with domestic fund managers

d) They increase fees for investors without providing any additional benefits
 
Q 15. Why do some Private Equity Funds prefer investing in growth-stage and mature companies?

A) To avoid regulatory scrutiny

B) To minimize transparency in operations

C) To cater to short-term profitability only

d) To discourage strategic and long-term investments

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