n NISM Certifications
X NISM Series X
Medium

What does 'Fair Value' mean in the context of AIF investments?

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. A

    The average market price for one year

  2. B

    The value arrived at with a fair idea

  3. The price agreed upon by unrelated buyers and sellers (arm’s length)

    Correct answer

  4. D

    The value disclosed in financial statements

Why this is the answer

Fair Value represents the arm’s length transaction price between unrelated, willing parties, reflecting true market conditions.

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