NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles
Which category of AIF is generally permitted to employ leverage and invests in listed or unlisted derivatives, such as hedge funds?
Category III AIFs, such as hedge funds, employ complex trading strategies and may use leverage and derivatives. Category I funds target startups and infrastructure, while Category II funds generally cannot borrow except to meet day-to-day operational needs.
- ACategory III AIFCorrect
- BCategory I AIF
- CCategory II AIF only for venture capital
- DAngel funds
Explanation
Category III AIFs employ diverse or complex trading strategies and may use leverage, including investing in derivatives. Category I covers socially desirable sectors like venture capital and infrastructure, and Category II generally does not use leverage except for day-to-day operational needs.
Did you get it right without looking?
One question tells you little. A timed set on Collective Investment Vehicles shows your real accuracy, how long you take and where you lose marks.
More Collective Investment Vehicles questions
- Under SEBI's regulations for Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs), which statement is correct…
- Under SEBI's framework, which statement about Infrastructure Investment Trusts (InvITs) is correct?
- Under SEBI AIF Regulations, what is the minimum investment amount per investor in an AIF (other than accredited investors and certain employ…
- An Exchange Traded Fund (ETF) tracking an index differs from a regular open-ended index fund mainly because the ETF:
- An open-ended mutual fund differs from an exchange-traded fund (ETF) mainly in that an ETF:
- A mutual fund scheme has net assets of Rs 520 crore and 20 crore units outstanding. An investor invests Rs 1,30,000 in a scheme with no entr…