n NISM Certifications
X NISM Series X
Medium

Which category of Alternative Investment Funds (AIFs) is permitted to use leverage?

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

    Category I AIF

  2. B

    Category II AIF

  3. Category III AIF

    Correct answer

  4. D

    None of the above

Why this is the answer

Category III AIFs are allowed to employ leverage as part of their investment strategies, often involving derivatives and complex trading.

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