With reference to investments, consider the following :
- I.Bonds
- II.Hedge Funds
- III.Stocks
- IV.Venture Capital
How many of the above are treated as Alternative Investment Funds?
Show answer
Answer: B. Under SEBI's AIF Regulations, 2012, an Alternative Investment Fund is a privately pooled fund outside the usual stock and bond markets. Venture capital funds are Category I AIFs and hedge funds are Category III AIFs. Ordinary bonds and stocks are traditional investments, not AIFs. So only two are AIFs.
Watch for: Do not count bonds and stocks just because an AIF may invest in them; the question asks what is treated as an AIF.
Why the other options are wrong
- A. Only one is wrong because both hedge funds and venture capital are AIFs.
- C. Only three is wrong because bonds and stocks are traditional investments, not AIFs.
- D. All the four is wrong because bonds and stocks are not AIFs.
Source to check: SEBI (Alternative Investment Funds) Regulations, 2012; SEBI website (AIF categories)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.