n NISM Certifications
X NISM Series X
Medium

Under which condition will performance-linked fees in portfolio management services (PMS) NOT be payable?

Practice question from NISM Series XA- Investment Adviser (Level 1) Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Fixed fees are below the agreed level

  2. B

    Hurdle rate has been crossed

  3. Profitability targets are not met

    Correct answer

  4. D

    Any of the above

Why this is the answer

Performance fees are contingent upon achieving specified profitability targets or hurdle rates; if these are not met, such fees are not payable.

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