n NISM Certifications
X NISM Series X
Medium

The difference between Gross IRR and Net IRR in an AIF arises primarily due to expenses, fees, and taxes deducted from gross returns, affecting the net realized return.

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. Due to expenses, fees, taxes

    Correct answer

  2. B

    Due to timing differences in cash flows

  3. C

    Due to withholding tax

  4. D

    Due to TDS on gains

Why this is the answer

Fees, expenses, and taxes reduce the gross IRR to arrive at the net IRR, creating the difference.

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