Civil Services Prep

Prelims 2025 · Economy · Question 31

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?

  1. Only one
  2. Only two
  3. Only three
  4. All the four

Answer

Only two

  • I. Bonds: Bonds are standard debt instruments, not a category of Alternative Investment Fund (AIF). Verdict: Incorrect.
  • II. Hedge Funds: Under SEBI AIF Regulations, hedge funds are recognized under Category III AIFs. Verdict: Correct.
  • III. Stocks: Stocks/shares are conventional securities, not treated as an AIF category. Verdict: Incorrect.
  • IV. Venture Capital: Venture Capital Funds are covered under Category I AIFs. Verdict: Correct.

Hence, only two of the above are treated as AIFs.

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