n NISM Certifications
X NISM Series X
Medium

How does a secondary sale differ from a strategic sale (M&A exit) in an AIF's exit strategy?

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Secondary sale involves valuation based on original issue price; strategic sale on market price

  2. Secondary sale involves another AIF as buyer; strategic sale involves a corporate entity

    Correct answer

  3. C

    Secondary sale involves shares sold through secondary market; strategic sale through primary market

  4. D

    Both involve sale to a corporate buyer

Why this is the answer

Secondary sale involves selling to another AIF, while a strategic sale involves a corporate buyer, often a competitor or larger company.

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