NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles
A Category III Alternative Investment Fund (AIF) in India is best characterised as one that:
A Category III AIF employs diverse or complex trading strategies and may use leverage, including through derivatives. Hedge funds are typical examples. Start-up, social venture and infrastructure funds belong to Category I, not Category III.
- AInvests in start-ups and early-stage ventures with a social benefit focus
- BEmploys diverse or complex trading strategies and may use leverage, including through listed or unlisted derivativesCorrect
- CReceives government incentives and invests only in infrastructure
- DIs prohibited from investing in listed securities
Explanation
Category III AIFs, such as hedge funds, employ diverse or complex trading strategies and may use leverage. Start-up and social venture funds fall under Category I. Category III funds can invest in listed securities, so the last option is wrong.
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