NISM Series 19A Mock Test 1: Free AIF Distributors Paper

How this mock is marked

• 50 questions, one mark each.
• 60 minutes on the clock. That is the real exam's pace: 120 minutes for 100 questions.
• A wrong answer loses one tenth of a mark. A blank loses nothing.
• You pass with 60% or more.
• Submit to see your score and the chapters to work on. Then check each right answer and why it is right.

What this paper covers

50 questions from 13 chapters. Each chapter gets a share that follows our question bank.

• Overview of Alternative Investments: 3 questions.
• Alternative Investment Funds in India: 2 questions.
• Concepts in Alternative Investment Funds Industry: 2 questions.
• Regulatory Framework – Indian Context: 5 questions.
• Alternative Investment Fund Structuring: 5 questions.
• Risk and Return – Investor and Fund Perspective: 5 questions.
• Investment Process and Governance of Funds: 5 questions.
• Fund Due Diligence – Investor Perspective: 8 questions.
• Legal Documents and Negotiations – Investor Perspective: 5 questions.
• Fund Monitoring, Reporting and Exit: 2 questions.
• Valuation: 3 questions.
• Taxation – India specific: 3 questions.
• Good Practices: 2 questions.

By level: Beginner 15 · Intermediate 25 · Advanced 10.

Chapter split of Mock 1

How Mock 1 shares its questions between chapters and levels. This split belongs to this paper. The other mocks of this exam have their own.

• Overview of Alternative Investments: Beginner 1 · Intermediate 1 · Advanced 1.
• Alternative Investment Funds in India: Beginner 1 · Intermediate 1 · Advanced 0.
• Concepts in Alternative Investment Funds Industry: Beginner 0 · Intermediate 2 · Advanced 0.
• Regulatory Framework – Indian Context: Beginner 2 · Intermediate 2 · Advanced 1.
• Alternative Investment Fund Structuring: Beginner 1 · Intermediate 3 · Advanced 1.
• Risk and Return – Investor and Fund Perspective: Beginner 1 · Intermediate 3 · Advanced 1.
• Investment Process and Governance of Funds: Beginner 2 · Intermediate 2 · Advanced 1.
• Fund Due Diligence – Investor Perspective: Beginner 2 · Intermediate 4 · Advanced 2.
• Legal Documents and Negotiations – Investor Perspective: Beginner 2 · Intermediate 2 · Advanced 1.
• Fund Monitoring, Reporting and Exit: Beginner 0 · Intermediate 2 · Advanced 0.
• Valuation: Beginner 1 · Intermediate 1 · Advanced 1.
• Taxation – India specific: Beginner 1 · Intermediate 2 · Advanced 0.
• Good Practices: Beginner 1 · Intermediate 0 · Advanced 1.

3 sample questions, with answers

These 3 questions are not in Mock 1, so reading them spoils nothing here. They come from Mock 3 of this exam. Each one shows the hint, the answer and why every wrong option is wrong.

1. Q1A zero-coupon instrument pays ₹121 exactly two years from today. At a 10% annual compounded discount rate, what is its present value?

   • A

     Option A. ₹100 — Correct answer

   • B

     Option B. ₹101

     Why it is wrong: ₹101 subtracts a simple ₹20 from the final value rather than applying compound discounting.

   • C

     Option C. ₹110

     Why it is wrong: ₹110 discounts the payment for only one year rather than two.

   • D

     Option D. ₹121

     Why it is wrong: ₹121 ignores the time value of money and does not discount the payment.

   Answer: A. The present value is ₹100 because ₹100 compounded at 10% for two years becomes ₹121. Present value = ₹121 ÷ 1.10² = ₹121 ÷ 1.21 = ₹100. Remember: Discount each payment over its full remaining term.

   Hint, shown before you answer in practice mode: Work backwards through two years of compounding. Common mistake: Discounting a two-year cash flow for only one year.

   XIX-A-132mediumnumerical

   Study this unit

2. Q2An investor pays ₹100 lakh today and receives ₹144 lakh exactly two years later, without interim flows. What is the annual internal rate of return?

   • A

     Option A. 22%

     Why it is wrong: 22% divides the total 44% gain by two and ignores annual compounding.

   • B

     Option B. 44%

     Why it is wrong: 44% is the total two-year gain rather than the annual internal rate of return.

   • C

     Option C. 14.4%

     Why it is wrong: 14.4% does not solve the compounded relationship between the stated cash flows.

   • D

     Option D. 20% — Correct answer

   Answer: D. The annual internal rate of return is 20% because two years of 20% compounding turn ₹100 lakh into ₹144 lakh. ₹100 lakh × (1 + r)² = ₹144 lakh. r = √1.44 − 1 = 0.20 = 20%. Remember: Annualising a multi-year investment requires compounding.

   Hint, shown before you answer in practice mode: Find the annual compounded rate that turns the initial amount into the final payment. Common mistake: Dividing a total multi-year percentage gain by the number of years.

   XIX-A-063hardnumerical

   Study this unit

3. Q3A ₹2 crore management fee is reduced by 50% of ₹0.6 crore transaction fees under the contract. What management fee remains before tax?

   • A

     Option A. ₹2.3 crore

     Why it is wrong: ₹2.3 crore adds the offset instead of reducing the management fee.

   • B

     Option B. ₹1.4 crore

     Why it is wrong: ₹1.4 crore deducts all transaction fees rather than the stated 50% offset.

   • C

     Option C. ₹1.7 crore — Correct answer

   • D

     Option D. ₹1 crore

     Why it is wrong: ₹1 crore halves the management fee rather than applying 50% to transaction fees.

   Answer: C. The management fee remaining is ₹1.7 crore under the stated contractual offset. Offset = 50% × ₹0.6 crore = ₹0.3 crore. Remaining fee = ₹2 crore − ₹0.3 crore = ₹1.7 crore. Remember: Apply a fee offset to the correct base and in the correct direction.

   Hint, shown before you answer in practice mode: Identify the amount to which the offset percentage applies. Common mistake: Assuming that an offset percentage applies to the management fee itself.

   XIX-A-094mediumnumerical

   Study this unit

Then take Mock 2

Read the chapters your result names first. A new paper then shows whether those gaps have closed.