n NISM Certifications
X NISM Series X
Medium

Regarding Category II AIFs, what is their borrowing policy?

Practice question from NISM Series XB- Investment Adviser (Level 1) Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Cannot borrow at all

  2. Can borrow for operational needs only

    Correct answer

  3. C

    Can borrow for socially beneficial projects

  4. D

    Can borrow for leverage within limits

Why this is the answer

Category II AIFs are permitted to borrow only for meeting day-to-day operational expenses, not for leverage purposes.

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