n NISM Certifications
X NISM Series X
Medium

Equity investments by AIFs tend to have follow-on funding because such companies rely heavily on growth capital through equity to scale their operations and realize valuation increases.

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 4 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Due to higher leverage

  2. B

    Due to lower growth potential

  3. Because they depend mainly on growth capital via equity

    Correct answer

  4. D

    To reduce valuation with additional financing

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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