n NISM Certifications
X NISM Series X
Medium

What is the key challenge for a distributor selling an AIF to an HNI?

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

    Price fluctuations of underlying assets

  2. B

    Reliance on the competence of the manager

  3. Illiquidity of the scheme

    Correct answer

Why this is the answer

The primary challenge is the illiquid nature of AIF investments, making them less attractive for immediate liquidity needs.

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