Series XIX-ANew
Alternative Investment Funds (Category I and II) Distributors
50 questionsPass mark 60%Negative marking 10% / wrong answer
NISM Series XIX-A practice questions
150 questions. Each answer is explained.
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Learn these topics
Practise one unit at a time
- Overview of Alternative Investments7 questions · 5 of 100 marks in the exam (5%)
- Alternative Investment Funds in India7 questions · 5 of 100 marks in the exam (5%)
- Concepts in Alternative Investment Funds Industry7 questions · 5 of 100 marks in the exam (5%)
- Regulatory Framework – Indian Context15 questions · 10 of 100 marks in the exam (10%)
- Alternative Investment Fund Structuring15 questions · 10 of 100 marks in the exam (10%)
- Risk and Return – Investor and Fund Perspective15 questions · 10 of 100 marks in the exam (10%)
- Investment Process and Governance of Funds15 questions · 10 of 100 marks in the exam (10%)
- Fund Due Diligence – Investor Perspective23 questions · 15 of 100 marks in the exam (15%)
- Legal Documents and Negotiations – Investor Perspective15 questions · 10 of 100 marks in the exam (10%)
- Fund Monitoring, Reporting and Exit7 questions · 5 of 100 marks in the exam (5%)
- Valuation8 questions · 5 of 100 marks in the exam (5%)
- Taxation – India specific8 questions · 5 of 100 marks in the exam (5%)
- Good Practices8 questions · 5 of 100 marks in the exam (5%)
Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 60% · 60 of 100 marks |
| Negative marking | 10% · 0.1 marks off per wrong answer |
| Certificate validity | 3 years · from the date of the examination |
NISM Series XIX-A Alternative Investment Funds (Category I and II) Distributors
Exam rules read on NISM's site on 29 October 2026. Check the current rules on NISM's site (opens in a new tab)
What these answers assume, and when it was last checked
Each question uses the rules listed below. We last checked them on 5 September 2026. A Budget or SEBI circular can change a rate, lot size or expiry day. If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.
- NSE uses Tuesday expiry and BSE uses Thursday expiry. This applies from 1 September 2025.
- The January 2026 index lot sizes are NIFTY 65, BANKNIFTY 30, FINNIFTY 60, MIDCPNIFTY 120 and NIFTYNXT50 25.
- The October 2024 SEBI framework sets a minimum index contract value of Rs 15–20 lakh. Each exchange may list one weekly benchmark index.
- Option buyers pay the premium upfront from 1 February 2025. A short index option has an extra 2% Extreme Loss Margin on expiry day from 20 November 2024.
- Equity short-term capital gains are taxed at 20%. Long-term gains are taxed at 12.5% above Rs 1.25 lakh. Both rates apply from 23 July 2024.
- F&O income is non-speculative business income in ITR-3. NSE equity derivatives trade from 9:15 a.m. to 3:40 p.m.
- The final ten-minute session began on 3 August 2026. It aligns with the cash market Closing Auction Session.
- Most Securities Transaction Tax questions test the base and who pays. On an option sale, it is the premium and the seller pays. On a futures sale, it is the traded value and the seller pays.
- On exercise, Securities Transaction Tax uses intrinsic value: settlement price minus strike price. The buyer pays it.
- Two questions test the current rate. From 1 April 2026, option sales carry 0.15% on the premium and futures sales carry 0.05% on traded price. The earlier rates were 0.10% and 0.02% from 1 October 2024.
- This section uses the T+1 rolling settlement cycle. Obligations are fixed on T+1. A short delivery goes to buy-in auction on T+1 and settles on T+2.
- The trade-for-trade surveillance segment uses direct close-out. Funds pay in by 10:30 a.m. and pay out on or after 1:30 p.m. on settlement day.
- Securities pay in to the settlement pool by 10:30 a.m. They pay out directly to the client’s demat account by 3:30 p.m.
- The 3:30 p.m. deadline replaced 1:30 p.m. under SEBI’s 10 October 2024 circular. Direct client credit was required by SEBI’s 5 June 2024 circular.
- The optional T+0 cycle trades until 1:30 p.m. Obligations are fixed by 2:30 p.m. on the trade day. An early pay-in shortage is closed out directly.
- Cash-market Value at Risk margin is six times exponentially weighted moving-average volatility. It has a 9% floor for Group I, a 21.5% floor for Group II, and a fixed 50% or 75% level for Group III.
- Extreme Loss Margin is 3.5% for a share and 2% for a broad-market-index exchange traded fund. Mark-to-market margin is collected before the next day’s trading. The trade-for-trade segment has 100% upfront margin.
- Close-out uses the higher of the highest price from trade day to auction day and 20% above the auction day’s official close.
- A funds shortage costs 0.07% a day. The trading facility is withdrawn at a shortage of Rs 5 lakh or more.
- SCORES allows 21 calendar days, then two 15-day review levels. Online Dispute Resolution moves from conciliation to arbitration after the market participant and SCORES steps.
- At NSE, the Investor Protection Fund limit is Rs 35 lakh per investor for each defaulting or expelled member. This applies to claims arising after 13 August 2024.
- A Basic Services Demat Account has no annual maintenance charge up to Rs 4 lakh of holdings. It costs up to Rs 100 above that, until the Rs 10 lakh eligibility ceiling. These slabs apply from 1 September 2024.
- The rupee pairs are USD-INR, EUR-INR, GBP-INR and JPY-INR. The cross-currency pairs are EUR-USD, GBP-USD and USD-JPY.
- Each contract covers 1,000 units of the foreign currency, except JPY-INR. JPY-INR covers 100,000 yen and is quoted in rupees per 100 yen.
- The tick is 0.25 paise, or Rs 0.0025. It equals Rs 2.50 a contract.
- Rupee pairs trade from 9:00 a.m. to 5:00 p.m. A monthly contract stops trading at 12:30 p.m. two working days before the expiry month’s last business day.
- Final settlement is in cash at the FBIL reference rate on expiry day. FBIL, Financial Benchmarks India, has published this rate in place of the Reserve Bank since 2018. Premium-style European options are quoted in rupees. The buyer pays the premium in cash on T+1.
- Daily settlement is on T+1 and final settlement is on T+2.
- NSE Clearing circular 026/2020 sets SPAN margin plus Extreme Loss Margin. The futures margin is 0.50% for USD-INR, 0.15% for EUR-INR, 0.25% for GBP-INR and 0.35% for JPY-INR. A short option has 0.75%. These figures apply from 1 June 2020.
- A USD-INR client may hold 6% of total open interest or USD 20 million, whichever is higher. A trading member may hold 15% or USD 100 million.
- A resident user has one USD 100 million equivalent limit across all rupee pairs and exchanges. No document is needed below that limit, but a valid underlying contracted exposure must still exist. This clarification applies from 3 May 2024.
- The currency segment has no Securities Transaction Tax.
The exam figures (questions, time, pass mark, negative marking and certificate validity) come from NISM's own pages, read on 29 October 2026. Timed practice uses the same figures. Study with the official workbook as well.
The written-out answers on this page are hidden while your timed set runs.
5 sample questions with answers
The other 145 are on the unit pages above, written out the same way.
Q1How can an alternative asset help diversify a portfolio of listed shares?
Option A. Its returns may move differently from those shares — Correct answer
Option B. Its purchase removes the need to review other holdings
Why it is wrong: Diversification still requires reviewing how all holdings interact.
Option C. Its returns must be positive during every market fall
Why it is wrong: Different return behaviour does not require a gain in every falling market.
Option D. Its unlisted status makes its economic risk disappear
Why it is wrong: Being unlisted changes trading access, not the existence of economic risk.
Answer: A. An alternative asset may diversify listed shares when their returns do not move perfectly together. This can reduce some portfolio risk without eliminating losses. Remember: Diversification depends on return relationships, not just different asset labels.
Hint, shown before you answer in practice mode: Think about how the returns of different assets move together. Common mistake: Assuming that adding any alternative asset must make a portfolio safer.
XIX-A-004mediumconceptual
Q2A fund charges 1.5% annually on ₹80 crore of commitments. Invested capital is ₹50 crore. What is the full-year fee before taxes?
Option A. ₹1.2 crore — Correct answer
Option B. ₹0.75 crore
Why it is wrong: ₹0.75 crore incorrectly applies the fee to invested capital rather than the stated commitment base.
Option C. ₹0.45 crore
Why it is wrong: ₹0.45 crore applies the fee only to the uninvested difference of ₹30 crore.
Option D. ₹1.95 crore
Why it is wrong: ₹1.95 crore double counts invested capital by adding it to commitments.
Answer: A. The full-year management fee is ₹1.2 crore because the stated base is committed capital. Fee = ₹80 crore × 1.5% = ₹1.2 crore. The ₹50 crore invested amount does not change that contractual base. Remember: The fee percentage alone is insufficient without knowing its base.
Hint, shown before you answer in practice mode: Read the fee base before using the percentage. Common mistake: Applying a fee to invested capital when the documents specify commitments.
XIX-A-018mediumnumerical
Q3A fully realised investment cost ₹60 lakh and generated ₹150 lakh of total proceeds. What is its gross multiple on invested capital?
Option A. 1.50 times
Why it is wrong: 1.50 times divides the profit of ₹90 lakh by cost rather than total proceeds by cost.
Option B. 0.40 times
Why it is wrong: 0.40 times reverses the ratio by dividing cost by proceeds.
Option C. 2.50 times — Correct answer
Option D. 3.50 times
Why it is wrong: 3.50 times adds the original cost to proceeds and counts returned capital twice.
Answer: C. The gross multiple on invested capital is 2.50 times. Multiple = ₹150 lakh total proceeds ÷ ₹60 lakh invested = 2.50. This multiple alone does not state the holding period or an annual return. Remember: A value multiple is not an annualised return.
Hint, shown before you answer in practice mode: Use total value received, not only the gain. Common mistake: Reading a 2.50-times multiple as a fixed annual percentage return.
XIX-A-059mediumnumerical
Q4Why should due diligence examine a key manager’s outside business interests?
Option A. They replace the need to examine fund-level investment results
Why it is wrong: Outside interests are one assessment area, not a substitute for performance and process review.
Option B. They may create competing demands on time or conflicts of interest — Correct answer
Option C. They automatically cancel the manager’s existing fund registration
Why it is wrong: Outside interests do not automatically cancel registration in every situation.
Option D. They prove that every outside investment is unlawful
Why it is wrong: The existence of outside activity alone does not prove illegality.
Answer: B. Outside interests may create time pressures or conflicts with the fund’s responsibilities. Their nature, disclosure and management matter more than simply counting them. Remember: Assess whether outside activities affect the manager’s ability to serve the fund.
Hint, shown before you answer in practice mode: Consider attention, incentives and competing obligations. Common mistake: Ignoring other commitments because the manager has a strong reputation.
XIX-A-093mediumconceptual
Q5A business has earnings before interest, tax, depreciation and amortisation of ₹12 crore. An enterprise-value multiple of eight applies. What is enterprise value?
Option A. ₹20 crore
Why it is wrong: ₹20 crore adds the multiple to earnings even though the multiple is not a rupee amount.
Option B. ₹1.5 crore
Why it is wrong: ₹1.5 crore divides earnings by the multiple rather than multiplying them.
Option C. ₹104 crore
Why it is wrong: ₹104 crore adds the multiple again after using it to calculate value.
Option D. ₹96 crore — Correct answer
Answer: D. Enterprise value is ₹96 crore using the specified earnings multiple. Enterprise value = ₹12 crore × 8 = ₹96 crore. Equity value would require any relevant debt, cash and other adjustments. Remember: Apply a valuation multiple to its matching earnings or financial measure.
Hint, shown before you answer in practice mode: Match the stated valuation multiple with its matching earnings measure. Common mistake: Calling enterprise value the final shareholder value without checking the bridge.
XIX-A-131mediumnumerical
NISM Series XIX-A practice: common questions
Are these the real NISM Series XIX-A exam questions?
No. LearnNifty wrote every question from NISM's public syllabus. NISM does not publish its question bank, so nobody can offer you the real paper. Use these questions to check that an idea has gone in. Use the official NISM workbook to see what is examined.
How many practice questions are there for NISM Series XIX-A?
150 at the moment, across 13 practice topics, with one page per unit. It is a practice set, not a copy of the paper: the real NISM-Series-XIX-A: Alternative Investment Funds (Category I and II) Distributors Certification Examination has 100 questions.
Where are all the questions and answers?
On the 13 practice topics listed above. There are 5 in full. Each unit's page has the rest, with all four options, the correct answer and why each other option is wrong.
Does negative marking apply to NISM Series XIX-A?
Yes. NISM takes off 10% of a question's marks for a wrong answer. On a 1-mark question that is 0.1 marks off. A blank question earns nothing and loses nothing, so a wrong guess costs marks on this paper. Timed practice here uses the same rule.
How do I book the NISM Series XIX-A exam?
You register and pay on NISM's own website, nism.ac.in. The steps and the fee change from time to time, so read them there on the day you book.
Are these practice questions kept up to date?
Each question is written against the rules printed on this page, last checked on 5 September 2026. A Budget or a SEBI circular can change a rate, a lot size or an expiry day. If one of those rules changes before your exam, treat the questions that use it as out of date. Then check NISM's current workbook.
See the exam these questions follow
The Alternative Investment Funds (Category I and II) Distributors exam page shows the question count, the time, the pass mark and the marking rule.
Open the NISM Series XIX-A exam pagePaper Trading Try it on the practice trading desk