n NISM Certifications
X NISM Series X
Medium

The aspect of a real estate debt fund that increases its risk is that projects often get stuck during construction, leading to a high risk of default. Such investments are exposed to sector-specific risks, including project delays and liquidity issues, making them inherently riskier than other asset classes.

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Real estate projects are many a times stuck in the construction phase and so the real estate debt funds have a high risk of default

    Correct answer

  2. B

    Real estate companies generally violate a lot of laws and so the real estate debt funds have a high risk of litigation

  3. C

    Real estate debt funds have a low credit rating

  4. D

    Real estate debt funds have high taxes

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

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