NISM-Series-XV - Research Analyst Certification Exam - 33

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Q 1. What is the analyst's responsibility regarding insider information in investment research?

a) Collating and sharing insider information

b) Ignoring insider information

c) Utilizing insider information for personal gain

d) Conducting primary research on insider information

e) Ensuring research does not involve collating insider information
 
Q 2. What does a higher Asset Turnover ratio indicate about a company's operations?

a) The company is facing difficulties in recovering money from clients.

b) The company is becoming less efficient in using its assets.

c) The company is taking on higher leverage.

d) The company is becoming more efficient in using its assets.

e) The company is increasing its liquidity.
 
Q 3. What happens to the company's board upon the appointment of an Interim Resolution Professional (IRP) under the IBC?

a) the board remains unchanged.

b) the board is dissolved.

c) the board is restructured.

d) the board is expanded.

e) the board reports to the IRP.
 
Q 4. What is the impact of a continuous deficit on the current account of a country?

a) Boosts foreign currency reserves

b) Depletes foreign currency reserves

c) Increases confidence in the country's currency

d) Results in a surplus on the capital account

e) does not affect the economy
 
Q 5. How does a shareholder's proportionate ownership change during share consolidation?

a) It increases

b) It decreases

c) It remains unchanged

d) It doubles

e) It halves
 
Q 6. What are some of the restrictions that may be imposed under GSM on securities with low market capitalization?

a) Lowering the margin requirement

b) Allowing intraday trading

c) Increase the price band

d) Freezing of price on the upside

e) Relaxing the Trade for trade category
 
Q 7. What does the Threat of Substitutes force in Michael Porter's model assess?

a) Bargaining power of suppliers

b) Entry barriers for new competitors

c) Possibility of alternative products or services

d) Competition among existing rivals

e) Bargaining the power of customers
 
Q 8. What is the purpose of the Capital Asset Pricing Model (CAPM) in estimating the cost of equity?

a) Determining the risk-free rate

b) Calculating the cost of debt

c) Assessing the risk and expected return relationship for equity

d) Estimating the market risk premium

e) None of the above
 
Q 9. What is emphasized as a key guideline for analysts when communicating their findings to clients?

a) Include biased views for a more engaging report

b) Using complex language to sound more professional

c) Making assumptions without stating the m clearly

d) Being realistic and basing suggestions on facts and figures

e) Promoting conflicts of interest to benefit the analyst
 
Q 10. What does "unit of pricing" refer to in the context of industries?

a) the quantity of goods sold

b) the quality of products

c) the legal framework governing pricing

d) the marketing strategy of the company

e) the industry's financial performance
 
Q 11. What is the primary expectation of an investor from an investment?

a) To earn periodic income only

b) To preserve or safeguard the capital invested

c) To get the capital invested back only

d) To earn the highest possible return

e) To experience high volatility in returns
 
Q 12. What is the primary purpose of Mortgage Backed Securities (MBS) and Asset Backed Securities (ABS)?

a) Generating revenue from real estate projects

b) Pooling money from various investors for infrastructure projects

c) Securitizing financial assets against receivables and cash flows

d) Creating liquidity in illiquid assets through securitization

e) Providing tax benefits to investors
 
Q 13. Which factor determines whether a company has the necessary capability to exploit opportunities and withstand threats?

a) Competitive advantage

b) Business model

c) Management competencies

d) Governance structure

e) Industry-specific factors
 
Q 14. Who popularized the concept of Margin of Safety in investing?

a) Warren Buffett

b) Benjamin Graham

c) Peter Lynch

d) Ray Dalio

e) Charlie Munger
 
Q 15. How do Participatory Notes (P-Notes or PNs) function in the Indian stock markets?

a) Actively participating in buyouts of companies

b) Issuing instruments to overseas investors

c) Ensuring assets through core business activities

d) Reducing risk in investments through diversification

e) Professionally managing collective investment schemes
 
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