Alternative Investment Funds (AIFs) are privately pooled investment vehicles that invest in assets beyond traditional options like stocks and bonds. In India, SEBI classifies AIFs into three categories, including hedge funds and venture capital funds.

❌ Statement I: Incorrect

• Bonds are traditional debt instruments and not classified as AIFs.

✅ Statement II: Correct

• Hedge Funds fall under Category III AIFs as per SEBI regulations.

❌ Statement III: Incorrect

• Stocks are conventional equity investments, not treated as AIFs.

✅ Statement IV: Correct

• Venture Capital is a form of Category I AIF in India.