n NISM Certifications
X NISM Series X
Medium

Management fees in an Alternative Investment Fund (AIF) are typically structured as a percentage of the capital commitments received from investors, aligning the manager’s interests with the fund’s size and investor commitments. Although SEBI does not prescribe specific management fee regulations, industry practice suggests the fee is based on committed capital during the investment period.

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 2 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    The management fee is a percentage of the underlying value of the assets under management

  2. The management fee is a percentage of the capital commitments received from investors

    Correct answer

  3. C

    The management fee is a percentage of the profits generated by the investment manager

  4. D

    The management fee is a percentage of the paid-up capital of the AIF trust

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

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