Q 1. How does liquidity risk affect the conversion of assets into cash?
Q 2. What does owning a security entitle an investor to?
Q 3. Which market segment allows issuers to raise capital by issuing securities for the first time?
Q 4. How do investors mitigate country risk?
Q 5. How is liquidity risk defined?
Q 6. What factors determine the real risk-free rate?
Q 7. What factor influences the magnitude of risk premium demanded by investors?
Q 8. What is the definition of a non-institutional investor?
Q 9. What is the term for the rate of return required to maintain the purchasing power of an investment?
Q 10. What is the constituent considered for the Nifty T-Bill Index for 91-day, 182-day, and 1-year T-bills?
Q 11. What percentage of weights is allocated to trading value in the liquidity score calculation for corporate bonds?
Q 12. What is the purpose of cap-based style segments such as Large cap value and Mid cap growth?
Q 13. What is the primary purpose of performance benchmarking for investors?
Q 14. What distinguishes broad market indices from other types of indices?
Q 15. Why is it difficult to benchmark the performance of Category I AIFs and Category II AIFs against broad-based indices?
Q 16. What is a disadvantage of using an equal-weighted index for creating index funds?
Q 17. Who has appointed the three benchmarking agencies that have published AIF benchmarks for all Categories of AIFs?
Q 18. What is the purpose of creating value and growth indices?
Q 19. How are stocks categorized into growth and value stocks?
Q 20. How is the eligible universe for index construction determined?
Q 21. What index represents the next 150 companies based on full market capitalization from NIFTY 500?
Q 22. According to SEBI regulations, who falls under the definition of "key management personnel" for AIFs?
Q 23. What is the primary focus of a Directional Strategy?
Q 24. What is thematic investing?
Q 25. What happens if the AIF is established as a trust and incurs expenses related to resolving investor claims?
Q 26. Which type of investors may not always have a right to a board seat?
Q 27. What risk is associated with a Short-bias Strategy during major macro-economic upturns?
Q 28. What distinguishes Private Equity investments from Venture Capital investments?
Q 29. What role do follow-up due diligence calls play in the IDD process?
Q 30. What is the purpose of the virtual data room in the IDD process?
Q 31. What distinguishes a Short-bias Strategy from a Dedicated-Long Strategy in terms of position-taking?
Q 32. Who conducts the Financial DDR on behalf of the AIF’s manager?
Q 33. What is the primary indicator for implementing Event-driven Investment Strategy?
Q 34. What is the role of the Acquiring Company in a merger or acquisition deal?
Q 35. How do AIF managers primarily develop market intelligence and a database of potential companies for deal sourcing?
Q 36. What is the primary purpose of seed capital investment?
Q 37. Which web-based system does SEBI provide for investors to lodge complaints against AIFs?
Q 38. What factor impacts the conversion ratio offered in Merger Arbitrage Strategy?
Q 39. What is a Leveraged Buyout (LBO)?
Q 40. What distinguishes a Short-bias Strategy from a Long-short Strategy?
Q 41. What is the purpose of the initial due diligence process in private equity deals?
Q 42. How many investee companies does a private equity firm typically analyze before making one investment?
Q 43. What method do investment managers commonly use to estimate growth of a company's stock in the Market-Neutral Strategy?
Q 44. Why should the manager assess the full value chain of each potential investment?
Q 45. What does the initial assessment of potential investments largely focus on?
Q 46. Which internal policy helps Private Equity Funds report their operations and investment-making decisions?
Q 47. What is a potential challenge in building the right board of directors for a startup?
Q 48. What type of due diligence is conducted by private equity investors before finalizing an investment?
Q 49. What does Financial DDR primarily focus on?
Q 50. What role does the manager play regarding advisory services for co-investment in investee companies?
Q 51. How does the Long-Short Equity Strategy aim to balance market exposure?
Q 52. When does the signing of the Shareholder Agreement and Share Subscription Agreement occur in the private equity deal process?
Q 53. What distinguishes a Short-bias Strategy from a Long-short Strategy regarding net exposure?
Q 54. What role does the Capitalization Table play in the private equity deal process?
Q 55. Which of the following areas is NOT essential for aligning interests between investors and sponsors/managers?
Q 56. Why should investors consider macro-economic factors when assessing AIFs?
Q 57. Why are business continuity and disaster recovery plans crucial for AIFs?
Q 58. Which of the following is NOT considered a tool to ensure the success of AIF investment management activity?
Q 59. What role can distributors play in mitigating Key-Person Risk for investors?
Q 60. What conflict may arise due to the involvement of the manager in managing several funds or schemes?
Q 61. Why is the ownership structure and continuing interest of the sponsor/manager important for investors?
Q 62. Why is it important for investors to analyze risk factors and leverage during due diligence?
Q 63. What does the term 'legal documentation' refer to in the context of an AIF?
Q 64. Why is the appointment of a merchant banker with proper credentials important for AIFs?
Q 65. Why is appointing a custodian mandatory for all AIFs under existing SEBI regulations?
Q 66. In the case of Category III AIFs breaching permitted leverage limits, what is the custodian's obligation according to SEBI regulations?
Q 67. What is a key covenant of the distributor outlined in the Distribution Agreement?
Q 68. According to the AIF Regulations, who is responsible for filing the placement memorandum with SEBI?
Q 69. In the case of an AIF constituted as an LLP, what is the constitutional document?
Q 70. How often are AIFs required to intimate SEBI regarding changes in terms of the PPM?
Q 71. How are Series Assets computed for a particular Series of units in a Category III AIF?
Q 72. What should the information provided to investors regarding valuation deviation include?
Q 73. What determines the NAV attributable to a specific class/sub-class of units?
Q 74. How does NAV per unit calculation contribute to transparency?
Q 75. Why is it important to compute NAV per unit separately for each Series?
Q 76. How often should Category III AIFs disclose the Net Asset Value (NAV) to investors if structured as a closed-ended fund?
Q 77. How is the value of cash in hand, bills and demand notes, and prepaid expenses determined?
Q 78. How do changes in the capital structure of a company affect its valuation?
Q 79. Which of the following is not a type of money market instrument based on tenor?
Q 80. What is the most acceptable approach to valuation according to theoretical standards?
Q 81. Which of the following methods is used more to corroborate the fundamental value derived from cash flow-based valuation?
Q 82. What approach is commonly used for profit-making companies according to the IPEV Guidelines?
Q 83. Which of the following is NOT considered in the computation of Fair Market Value (FMV) of unquoted equity shares under Option 1 for Resident Investors?
Q 84. What is required to be included in the PPM of AIFs regarding valuation methodology?
Q 85. When are traded debt securities considered as such?
Q 86. What is added to the forecasted free cash flow to compute the present value of the company's business?
Q 87. When must an AIF scheme mandatorily make in-specie distribution of units held in a Liquidation Scheme of another AIF scheme?
Q 88. What happens if the AIF fails to arrange bids for a minimum of 25% of the value of unliquidated investments during in-specie distribution?
Q 89. What is one of the main risks associated with adhering too closely to a declared investment strategy in the context of AIF investing?
Q 90. What information does the "Current investment portfolio and investment allocation by the Fund" section of fund reporting provide?
Q 91. What is the timeframe for intimating changes to the PPM and other fund documents to investors and SEBI?
Q 92. What does Principle 4 of the Stewardship Code emphasize?
Q 93. Which exit option involves selling the AIF's holdings in the company in the IPO market?
Q 94. Why are secondaries considered complex to execute from an AIF perspective?
Q 95. What does Principle 6 of the Stewardship Code require AIFs to do?
Q 96. When must the in-specie distribution of unliquidated investments be carried out?
Q 97. What does Regulation 22 require AIFs to provide when required by SEBI for systemic risk purposes?
Q 98. Which type of risk should AIFs disclose in their reports to investors?
Q 99. Which section of the Income Tax Act (ITA) exempts Investment Funds from withholding taxes on non-business income?
Q 100. What would the Indian Revenue authorities consider if unlisted shares are transferred along with the control and management of the underlying business?
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