NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Overview of Alternative Investment Funds (AIFs)
Mr. Iyer, a Mumbai businessman, wants to invest in an AIF that is closed-ended with a minimum tenure fixed at the time of launch. What is the minimum tenure required for a Category I and Category II AIF?
The minimum tenure for Category I and Category II AIFs is three years, since these must be close-ended. Category III funds may be open-ended, so the three-year minimum tenure applies specifically to the first two categories.
- A1 year
- B3 yearsCorrect
- C5 years
- D7 years
Explanation
Category I and Category II AIFs must be close-ended with a minimum tenure of three years. Category III AIFs can be open-ended or close-ended. Hence 3 years is correct; 1 year is too short for these categories.
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