NISM Series XIX-C: Alternative Investment Fund Managers Cert. -Full-Length Test

Securities traded on a stock exchange or other regulated markets are to be valued at the closing price quoted on the relevant exchange or market, as on the relevant Valuation Day. State whether true or false.

________ Funds are recommended to comply with the Global Investment Performance Standards, to ensure full disclosures and fair performance presentation which helps to advance fair competitive practices within the industry and meet the demands of prospective clients and investors.

In Category III AIF Distributors model code of conduct Consider _________, risk profiling and suitability to their financial needs while marketing Category III AIFs and advising on the same.

________ will be calculated as the sum of the market value of the long and short positions of all securities / contracts held by the fund.

__________ commitment shall be in the form of investment in the scheme of the fund and shall not be through the waiver of management fees.

The United Nations-backed __________ is a global network of investors that attempts to integrate ESG practices into investment practices.

Performance Risk covers the ________ risk factors.

A Category III AIF can invest up to _____ of its investable funds in one single investee company.

The Investment Manager comes with ________ of experience dealing in equities, fixed-income securities, and derivatives and hence is able to take an investment call on behalf of their investors.

___________ made by AIFs in India, are considered foreign investments, if neither the Sponsor nor the Manager nor the Investment Manager is Indian owned and controlled.

In case of accreditation of Individual investors, HUFs and sole proprietorships, the value of the primary residence of the Individual, Karta of the HUF, or the Sole Proprietor, as the case may be, shall not be considered for calculation of net worth. State Whether true or false.

______ means an AIF that invests primarily in unlisted securities or partnership interest or listed debt or securitized debt instruments of investee companies or special purpose vehicles engaged in or formed for the purpose of operating, developing or holding infrastructure projects.

Incentive Fee is charged as a percentage of the incremental return earned by the Category III AIF, generally between ___________.

The Leverage Strategy of the fund/scheme, with a detailed description of the types of derivative exposures, target markets, and inherent risks of such exposures is a __________ Strategy of the Category III AIF/Fund scheme.

________ Strategy focuses on delivering absolute returns, by identifying overpriced and underpriced stocks, relative to the investment manager’s fair valuation.

Category III AIFs in India have been investing the funds faster, in order to generate alpha by employing diverse trading strategies. State whether True or False.

GST is also levied on the Trusteeship Fees, payable to the Trustee of the Category III AIF, at the rate of _________.

_________ is computed using a common method known as Capital Asset Pricing Model.

Employees who do not respect the Distributor’s Confidentiality Policy should be held liable for disciplinary action. The employees should _________.

__________ is a serious economic offense as it undermines the integrity of the market participants, distorts economic performance, misallocates capital flows, evades taxes and finances criminal and terrorist activities.

________ refers to the total funds to be contributed by investors for subscription to the Category III AIF, during the life of the fund.

Category III AIF indulges in any manipulative, fraudulent or deceptive practices or spreads rumors with a view to make personal gain. State whether true or false.

The distributors ensure that they are not in violation of SEBI Regulations. State whether true or false.

Which term describes the fund’s aspirations, investment objectives, and the vision of the Investment Manager?

The __________ should have effective policies and controls in the organization, to minimize conflicts of interest that may jeopardize the independence and objectivity of research.

The __________ Strategy focuses on delivering absolute returns for investors over the medium to long term, with a strong emphasis on capital preservation.

_________ can permit assessment of such income in the hands of the Trustee, wherein the Trustee would be assessed as a representative assesses of the fund.

Investors will always prefer a ______ TVPI, as it measures the Total Value generated, whether by distributions made or the value of unrealized assets in the fund.

A ___________ appointed for filing of PPM shall not be an associate of the AIF, its sponsor, manager or trustee.

The ________ is the offer document made by the Category III AIF, both at Onshore Level and Offshore Level to attract capital commitments from potential investors.

_________ of the following Trust structures are eligible to pass-through income in the nature of ‘Capital Gains’, to its investors.

At the Fund constituent level disclose the potential conflict if the _________ is a group or associate entity of the Category III AIF, or sponsor/investment manager of the fund, or has one or more directors in common.

________ strategy, which aims at making investments, independent from the broad market movements.

The total net assets of the fund represent the total value attributable to all classes of units and investors with the Category III AIF. State whether True or False.

Every Manager of a Category III AIF and key management personnel of the manager and fund shall __________.

__________ is difficult to predict whether any additional interim or permanent governmental steps may be taken and what effect such steps may have on the Fund’s investment strategies.

RVPI can be represented as a summation of TVPI and DPI. State whether True or False.

_______ measures Systematic Risk which is the change in the returns earned by the fund portfolio, on account of a change in the returns on a broad-based index.

The _________ is based on the premise that the risk premium generated by an investment manager of a Category III AIF should not be compared with the total risk, but with the risk which is not diversifiable.

Delivery-based purchase and sale of equity shares, traded on a recognized stock exchange in India, are subject to STT at the rate of ________ on the transaction value of such purchase or sale.

As per SEBI regulations, what are the minimum investment requirements for a Category II Alternative Investment Fund (AIF)?

Category III AIF may take Leverage through investments in derivative contracts, provided ________.

_________ is disclosed to the investors at quarterly intervals for close-ended funds and at monthly intervals for open-ended funds.

Total income exceeding Rs.50 lakh but not exceeding Rs.1 crore, the Surcharge Rate is _________.

Distributors should abstain from providing incorrect or misleading information about  their Organization and employees, officials, or sales agents to the _______.

_________ measures the total amount distributed by the fund, per rupee of investment.

Hedge Funds take both long and short positions and use significant leverage at the fund level. State whether True or False.

If a Category III AIF deploys leverage, the Fund must ensure that _________.

Adequate internal controls should be implemented at the fund level to ensure compliance with the prudential norms and reporting any breach of leverage limits specified by SEBI, on a monthly basis if the fund is taking _________.

GAAR shall be invoked in case tax avoidance is sufficiently addressed by the Limitation of Benefit Clause in a Treaty with other countries. State Whether True or False.

The NAV of a Category III AIF shall be disclosed to all investors on a quarterly basis, if the fund is structured as an open-ended Category III AIF. State whether True or False.

In the context of Alternative Investment Funds (AIFs), what do paid-up units represent?

The _______ of a Category III AIF is of particular relevance to distributors and is fundamental to marketing the right product to investors as well as explaining the potential return and risks therein.

___________ refers to the degree to which a distribution is more or less peaked than a normal distribution.

Managers shall frame the preferred investment approach for making investments. State whether true or false.

Under Section 2(42A) of the Income Tax Act, 1961, a short-term capital asset is a capital asset held by the assesses, for a period not more than __________ immediately preceding the date of transfer, in case of securities listed on a recognized stock exchange, a unit of an equity oriented fund, listed bonds and debentures, or a zero coupon bond.

A Directional Strategy is an the opposite of ________ Strategy, as the investment manager will not aim at having a Portfolio Beta of zero or close to zero.

Nondiscretionary Trusts are administered as per the clauses of the trust deed and are not driven by the discretion of the trustee. State Whether True or False.

_________ is a measure used to quantify the downside risk in a Category III AIF.

The _________ computes the excess return earned by the fund over the risk-free rate, per unit of total risk taken as defined by its portfolio standard deviation.

Investors make capital commitments, which are called by the Investment Manager  making Capital Calls from investors, over a pre-defined period known as ________.

In a limited liability partnership structure that is widely prevalent abroad, the investment managers are known as ________.

_________ can also be Discretionary Trusts, where the trustee exercises discretion on the utilization of the assets of the trust, determines beneficial interest, and also exercises discretion over the distribution of income of the Trust.

For which type of investor is the applicable amount increased by the applicable surcharge along with a 4% Health and Education Cess?

__________ can be computed at such intervals, as determined by the Investment Manager, for the purposes of a closing or for redemptions or distributions, as applicable.

Category III AIF investors need to face the risk of ________ and increased market risks, on account of derivative exposures and use of leverage.

Short-term Capital Gains earned on the sale of equity shares, units of equity-oriented mutual funds, or units of business trust through a recognized stock exchange located in any _______ and consideration is paid or payable in foreign currency.

__________ fees are charged to investors, on redemptions made after the completion of the lock-in period but before the expiration of stated fund tenure.

The person to whom the property is transferred is called the __________.

___________ are issued by the Investment Manager on the dates specified in the Agreement, which requires investors to the deposit requisite capital amount by a pre-specified date and through a specific method of payment

The _________ is managed by an India-based investment manager who enters into an Investment Advisory Arrangement with the Offshore Investment Manager, to provide recommendations on investment opportunities in the domestic market.

________ means an AIF that invests primarily in unlisted securities of startups, emerging or early-stage venture capital undertakings mainly involved in new products, new services, technology or intellectual property right-based activities or a new business model and shall include an angel fund.

Excessive leverage and concentrated positions taken in stocks can also increase the volatility of the fund. State Whether true or false.

According to the SEBI (AIF) Regulations, 2012, an Alternative Investment Fund (AIF) is defined as a ________ structure.

________ is a pooled investment vehicle, which invests in other AIFs in the industry, with the purpose of achieving greater diversification across different investment strategies.

The agreement prepared by legal advisors, wherein the trustee appoints the investment manager of the Category III AIF, is known as ________.

Venture capital, private equity, hedge funds, Over-the-counter and exchange-traded derivative contracts, real estate, commodities, precious metals, arts, and antiques are avenues for ___________.

The concentration limit of __________ is on the fund corpus and not on total contributions from one investor.

A Foundation is a __________ organization that donates funds and provides support to other organizations, for charitable purposes.

Unlisted securities should be valued at the ________ price which represents the true and fair market value of such unlisted securities.

________ helps to align the interest of the Investment Manager with the interest of the fund and encourages the Investment Manager to seek the best execution of investments for the interest of the investors in the fund.

_________ may be invoked by the Indian income-tax authorities, in case any arrangements entered into by a Category III AIF are found to be impermissible avoidance arrangements.

_________ Funds were started by several countries such as members of the OPEC, China, Japan, Singapore and Malaysia.

________ agreement sets out the terms and conditions on which an investor will subscribe to the securities issued by an offshore fund.

_________ of the following disclosures should be made in the section of ‘Proposed Investment Strategy’ of an ideal pitchbook:

___________ measures allow investors to compare the returns of a Category III AIF, adjusted for the risk level of a benchmark.

___________ an Alternative Investment Fund or scheme of an Alternative Investment Fund in which each investor is an accredited investor and invests not less than Rs. 70 crores.

The _________ can charge customized fees to the investors, based on the investor profile, targeted market segment, tenure of the fund, and other macro-economic factors or risks.

Investments made by Offshore Funds in India are regulated by SEBI. State Whether true or false.

Specific interest is calculated based on the underlying asset price, exercise price, inherent volatility in asset price, changes in interest rates and time period to Option Expiry. State whether true or false.

The ________ schemes offer units to investors on a continuous basis and do not have a fixed maturity period.

__________ is pre-defined in the Private Placement Memorandum and depends on the Investment Manager, investment strategy and the time remaining until fund liquidation.

Category III AIFs deploy complex strategies with a view to make short-term gains and generate __________.

_______ refers to the extent to which a distribution is not symmetrical across the mean.

In case the IPO involves the fresh issue of equity shares and the majority of the proceeds from such fresh issue are proposed to be utilized for capital expenditure, then the lock-in period for such shares shall be _______.

Model Code Of Conduct for Category III AIF Distributors Inform investors about the key risk factors of each fund/scheme and desist from ________ or exaggeration.

An _______ is a Trust in which the Settlor of the Trust does not have powers to revoke the trust and the trust shall continue operations, until its purpose is served or stipulated tenure is complete.

Marketing, Sales, Investor Support and Relationship Management form the four pillars of AIF distributorship. State whether True or False.

A ________ is a legal entity set,up  for the transfer of property from one person to another, with the intention that the Trust is administered for the benefit of the owners.

__________ the types of fees  charged by Investment Managers for maximizing the return for investors in the Category III AIF.