Skip to content

NISM Certifications · NISM-Series-X-A: Investment Adviser (Level 1) · Overview of Alternative Investment Funds (AIFs)

Which statement about the concentration norms for AIFs is correct?

Category I and II AIFs cannot invest more than 25% of their investable funds in a single investee company. Category III has a lower limit of 10%, and unlisted investments are in fact a main feature of these funds.

  1. AA Category I and II AIF can invest more than 25% of investable funds in a single investee company
  2. BA Category I and II AIF cannot invest more than 25% of investable funds in one investee companyCorrect
  3. CA Category III AIF cannot invest more than 10% of investable funds in one investee company
  4. DCategory I and II AIFs may not invest in unlisted companies

Explanation

Category I and II AIFs may invest up to 25% of investable funds in a single investee company, and Category III up to 10%. Hence the second option is correct. The third option understates the Category III limit incorrectly framed as a cap on Category I and II, and AIFs generally invest in unlisted companies.

Did you get it right without looking?

One question tells you little. A timed set on Overview of Alternative Investment Funds (AIFs) shows your real accuracy, how long you take and where you lose marks.

Practise Overview of Alternative Investment Funds (AIFs)Free diagnostic mock

More Overview of Alternative Investment Funds (AIFs) questions