NISM Series XIX-C AIF Managers Certification Exam -25
NISM Series XIX-C AIF Managers Certification Exam -25
Q 1. What is the primary objective of Private Equity investments?
a) Achieving short-term profits
b) Supporting start-up ventures
c) Long-term value creation
d) Providing liquidity to shareholders
Q 2. What type of risk does a long-only Equity Strategy aim to minimize?
a) Regulatory risk
b) Market risk
c) Liquidity risk
d) Operational risk
Q 3. Under what conditions are members of the Investment Committee exempt from responsibility for large-value funds for accredited investors?
a) If they are employees of the sponsor
b) If they have invested a minimum of INR 50 crore
c) If they have not furnished a waiver to a large value fund
d) If they are directors of the investment manager
Q 4. What is the primary purpose of a liquidation preference for investors?
a) To provide immediate returns on their investment
b) To grant investors control over the liquidation process
c) To secure priority in receiving proceeds in the event of liquidation
d) None of the above
Q 5. How does the Market-Neutral Strategy ensure zero betas for the fund?
a) By maximizing leverage
b) By minimizing leverage
c) By taking equal long and short exposures in equities
d) By focusing on short-term gains
Q 6. When is an LBO typically considered an attractive option?
a) When the acquiring company has excess cash reserves
b) When the target company is financially stable
c) When there is a large forecast of cash flow contingent on future projects or restructuring
d) When there is no alternative financing available
Q 7. Which of the following actions typically requires approval from preferred stockholders with protective provisions?
a) Hiring new employees
b) Issuing dividends to common shareholders
c) Dissolving the company
d) Change the company logo
Q 8. What is the purpose of forming a board of directors in a company?
a) To decrease investor influence
b) To increase operational costs
c) To provide guidance and oversight
d) To discourage innovation
Q 9. What is the role of side letters in AIF investments?
a) To limit investor rights
b) To increase conflicts of interest
c) To provide additional rights to specific investors
d) To bypass regulatory requirements
Q 10. What is the primary role of the AMC (Asset Management Company) in an AIF?
a) Addressing all investor complaints
b) Maximizing profits for the fund
c) Providing information to regulators
d) All of the above
Q 11. What does SAM stand for in the context of Venture Capital investments?
a) Serviceable Available Market
b) Sustainable Asset Management
c) Startup Asset Measurement
d) Strategic Acquisition Model
Q 12. What is the purpose of prohibiting the payment of dividends to equity shareholders, especially founders?
a) To encourage founders to reinvest profits back into the company
b) To ensure immediate returns for investors
c) To establish control over the company's financial operations
d) None of the above
Q 13. How does the continuing interest of the sponsor/manager mitigate moral hazard?
a) By ensuring high management fees
b) By aligning their interests with investors
c) By outsourcing management responsibilities
d) By maximizing investor returns
Q 14. What is a potential conflict of interest regarding the allocation of time and resources by the investment manager?
a) Outsourcing investment management decisions
b) Dedication of time towards AIF investment management decisions
c) Allocation of time among various projects
d) Co-investing with affiliates
Q 15. What is the significance of manager selection from an investor perspective?
a) It determines the investment strategy of the AIF.
b) It minimizes the risk of adverse selection.
c) It ensures regulatory compliance.
d) It eliminates the need for due diligence.
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