NISM Series XIX-E (Cat III AIF) Practice Questions - NISM-Series-XIX-E Category III Alternative Investment Fund Managers Certification Examination Exam - NISM Series XIX-E (Cat III AIF) Practice Questions - NISM-Series-XIX-E Category III Alternative Investment Fund Managers Certification Examination Exam

Question 1

Which of the following best describes alternative investments in comparison to traditional investments like public equities and fixed income?

Alternative investments generally have higher liquidity and lower transaction costs. Alternative investments typically exhibit low correlation with traditional asset classes and may have complex fee structures. Alternative investments are subject to the same strict daily valuation requirements as mutual funds. Alternative investments are strictly limited to retail investors due to their low-risk profiles.

Correct Answer:

Alternative investments typically exhibit low correlation with traditional asset classes and may have complex fee structures.

Question 2

In the context of the Indian investment landscape, which of the following is considered a typical characteristic of a Private Equity (PE) investment compared to a Category III AIF?

PE investments are typically close-ended and invest in unlisted companies, whereas Category III AIFs often invest in listed securities and derivatives. PE investments engage in active high-frequency trading using leverage, while Category III AIFs only take long-only physical positions. PE investments have a typical fund life of 1 to 2 years, whereas Category III AIFs require a minimum lock-in of 15 years. PE investments are classified under Category III AIFs under SEBI regulations, while hedge funds are Category II.

Correct Answer:

PE investments are typically close-ended and invest in unlisted companies, whereas Category III AIFs often invest in listed securities and derivatives.

Question 3

Which of the following is a primary driver for institutional investors allocating capital to Category III Alternative Investment Funds?

The statutory guarantee of capital preservation provided by SEBI. The search for absolute returns that are uncorrelated with the broader equity index. The regulatory exemption from paying any income tax on distributions. The ease of daily redemption without exit loads.

Correct Answer:

The search for absolute returns that are uncorrelated with the broader equity index.

Question 4

Which of the following investment instruments is characterized by having its payoff tied to the performance of an underlying stock index but structured as a debt security with capital protection features?

Hedge Fund Units Equity-Linked Debentures (ELDs) Interest Rate Swaps Commodity Futures

Correct Answer:

Equity-Linked Debentures (ELDs)

Question 5

A structured product is designed such that the investor receives the principal back at maturity plus 80% of the positive return of the Nifty 50 index. If the Nifty 50 rises by 25% over the investment period, what is the total percentage return to the investor?

25% 20% 15% 80%

Correct Answer:

20%

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Prepare with the NISM Series XIX-E (Cat III AIF) Practice Questions - NISM-Series-XIX-E Category III Alternative Investment Fund Managers Certification Examination Exam practice quiz. This question bank includes 100 questions covering fund, category, sebi, investment, and return. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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NISM Series XIX-E (Cat III AIF) Practice Questions - NISM-Series-XIX-E Category III Alternative Investment Fund Managers Certification Examination Exam

This practice set contains 100 questions from the matching question bank and focuses on fund, category, sebi, investment, and return. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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NISM Series XIX-E (Cat III AIF) Practice Questions - NISM-Series-XIX-E Category III Alternative Investment Fund Managers Certification Examination Exam

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