UPSC Prelims 2025·GS1·economy·money and banking

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?

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Last updated 23 May 2026, 3:31 pm IST
  1. AOnly one
  2. BOnly twoCorrect
  3. COnly three
  4. DAll the four

Explanation

Among the given investment options, two are treated as Alternative Investment Funds (AIFs): I. Bonds: No, bonds are traditional debt securities and not classified as AIFs. They are conventional investment instruments traded in regular debt markets. II. Hedge Funds: Yes, hedge funds are classified as Alternative Investment Funds under SEBI regulations. They use complex strategies and are available to sophisticated investors. III. Stocks: No, stocks (equity shares) are traditional investment instruments traded on stock exchanges and are not classified as AIFs. IV. Venture Capital: Yes, venture capital funds are classified as Alternative Investment Funds, specifically under Category I AIFs as they invest in startups and emerging companies. Therefore, only hedge funds and venture capital qualify as AIFs under Indian regulatory framework.
economy: With reference to investments, consider the following: I. Bonds II. Hedge Funds III. Stocks IV. Venture Capital How many
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