n NISM Certifications
X NISM Series X
Medium

Why are Alternative Investments added to a portfolio?

Practice question from NISM Series XB- Investment Adviser (Level 1) Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    To improve liquidity

  2. B

    Due to legal requirements over Rs. 1 crore

  3. To enhance returns

    Correct answer

  4. D

    To generate steady cash flows

Why this is the answer

A primary purpose of AIFs is to improve the overall return profile through diversification and access to high-growth assets.

Test yourself for real

Take a full NISM Series X mock test.

Same duration, same weighting, same difficulty distribution as the real exam — with explanations on every question.