n NISM Certifications
X NISM Series X
Medium

Which of the following can be considered a negative finding during due diligence of an 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. A

    No co-investment facility offered by the AIF

  2. Several conflict of interest transactions by the investment manager

    Correct answer

  3. C

    Replacement of auditors by rotation

  4. D

    All of the above

Why this is the answer

Conflicts of interest involving the manager indicate potential governance issues, whereas absence of co-investment facilities or auditor rotation are standard practices.

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