NISM Series 19A Mock Test 2: 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: 2 questions.
• Alternative Investment Funds in India: 3 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: 2 questions.
• Taxation – India specific: 3 questions.
• Good Practices: 3 questions.

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

Chapter split of Mock 2

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

3 sample questions, with answers

These 3 questions are not in Mock 2, so reading them spoils nothing here. They come from Mock 1 of this exam. Each one shows the hint, the answer and why every wrong option is wrong.

1. Q1An investment pays ₹11 lakh after one year and a final ₹121 lakh after two years. What is present value at 10% annually?

   • A

     Option A. ₹110 lakh — Correct answer

   • B

     Option B. ₹132 lakh

     Why it is wrong: ₹132 lakh adds the cash flows without discounting either payment.

   • C

     Option C. ₹109.09 lakh

     Why it is wrong: ₹109.09 lakh discounts both receipts for two years, delaying the first payment incorrectly.

   • D

     Option D. ₹120 lakh

     Why it is wrong: ₹120 lakh discounts both receipts for only one year instead of using their separate dates.

   Answer: A. The present value is ₹110 lakh after discounting each payment separately. Year-one present value = ₹11 lakh ÷ 1.10 = ₹10 lakh. Year-two present value = ₹121 lakh ÷ 1.10² = ₹100 lakh. Total = ₹10 lakh + ₹100 lakh = ₹110 lakh. Remember: Cash-flow timing must be preserved in a valuation.

   Hint, shown before you answer in practice mode: Value each cash flow at its own date before adding the present values. Common mistake: Applying one discount period to payments that occur on different dates.

   XIX-A-133hardnumerical

   Study this unit

2. Q2A 2% annual fee applies to a constant ₹100 crore base for exactly six months. Using simple half-year proration, what fee arises before tax?

   • A

     Option A. ₹4 crore

     Why it is wrong: ₹4 crore increases the full-year charge rather than prorating it for six months.

   • B

     Option B. ₹2 crore

     Why it is wrong: ₹2 crore is the full-year fee and ignores the stated half-year period.

   • C

     Option C. ₹1 crore — Correct answer

   • D

     Option D. ₹0.5 crore

     Why it is wrong: ₹0.5 crore halves the annual rate and then halves the period again.

   Answer: C. The six-month fee is ₹1 crore under the specified simple proration. Full-year fee = 2% × ₹100 crore = ₹2 crore. Half-year fee = ₹2 crore × 6 ÷ 12 = ₹1 crore. Remember: Apply a fee’s stated time basis as well as its capital base.

   Hint, shown before you answer in practice mode: Use both the fee rate and the stated fraction of a year. Common mistake: Charging a full annual fee for a shorter stated period.

   XIX-A-062mediumnumerical

   Study this unit

3. Q3On a ₹1 crore fee base, Plan A charges 1% plus ₹40,000 yearly. Plan B charges 1.2% only. What is their annual difference before tax?

   • A

     Option A. Plan A costs ₹40,000 more

     Why it is wrong: This compares only the fixed charge and ignores the difference in percentage fees.

   • B

     Option B. Plan A costs ₹20,000 more — Correct answer

   • C

     Option C. Plan A costs ₹20,000 less

     Why it is wrong: This reverses the result after the fixed charge is included.

   • D

     Option D. Both plans cost the same

     Why it is wrong: The fixed charge makes the lower percentage plan more expensive on this base.

   Answer: B. Plan A costs ₹20,000 more on the stated base. Plan A = 1% × ₹1 crore + ₹40,000 = ₹1,40,000. Plan B = 1.2% × ₹1 crore = ₹1,20,000. Difference = ₹20,000. Remember: A lower fee percentage can still produce a higher total charge.

   Hint, shown before you answer in practice mode: Convert both fee arrangements into rupees before comparing them. Common mistake: Comparing percentages while ignoring fixed costs.

   XIX-A-095mediumnumerical

   Study this unit

Then take Mock 3

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