n NISM Certifications
X NISM Series X
Medium

What should an investor primarily consider when evaluating an Alternative Investment Fund (AIF)?

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. The investor's risk appetite

    Correct answer

  2. B

    Statutory compliance requirements of the fund

  3. C

    The current exchange rate of the local currency

  4. D

    Foreign Portfolio investment regulations by RBI

Why this is the answer

A critical consideration for AIF investors is whether their risk appetite aligns with the illiquid and long-term nature of underlying investments, typically suitable for high net worth individuals.

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