NISM-Series-XV - Research Analyst Certification Exam - 10

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Q 1. Which factor is crucial for attracting investors, involving the availability of a technology-savvy population and institutions driving technological initiatives?

a) Economic Factors

b) Political Factors

c) Technological Factors

d) Socio-Cultural Factors

e) Legal Factors
 
Q 2. How is the EV to Capital Employed ratio calculated?

a) (Enterprise Value - Value of Debt) / (Total Equity + Total Debt)

b) Enterprise Value / Total Equity

c) (Value of Equity + Value of Debt) / (Total Equity + Total Debt)

d) Enterprise Value / (Total Equity + Total Debt)

e) (Enterprise Value + Value of Debt) / Total Equity
 
Q 3. Which regulatory body oversees Mutual Fund Units and Exchange Traded Funds (ETFs) in the Indian Securities Market?

a) RBI

b) SEBI

c) Regulators under the Companies Act

d) NSE

e) MSEIL
 
Q 4. What does a surcharge represent in terms of income tax?

a) Tax on profits

b) Tax on expenses

c) Tax on tax

d) Tax on dividends

e) Tax on assets
 
Q 5. What is Credit Risk, also known as?

a) Market Risk

b) Default Risk

c) Operational Risk

d) Inflation Risk

e) Interest Rate Risk
 
Q 6. What is the role of clearing and settlement in the equity trade life cycle?

a) Negotiating trades between buyers and sellers.

b) Ascertaining the net obligations of buyers and sellers.

c) Facilitating direct contact between issuers and investors.

d) Providing liquidity to securities.

e) Guaranteed settlement for issuers.
 
Q 7. How can the deregulation of an industry pose a threat to existing players?

a) By creating an economic recession

b) By increasing entry barriers

c) By favoring technological disruptions

d) By reducing competition

e) By removing entry barriers and increasing competition
 
Q 8. What initiates the transition from a bear market to a bull market, as per the text?

a) Sellers accepting lower prices.

b) Central bankers reducing interest rates.

c) Economic conditions changing.

d) Buyers finding attractive valuations.

e) Bull markets reaching their peak.
 
Q 9. What characterizes trading or speculating in the financial markets?

a) Acting on information to bring about changes in prices

b) Using insurance to limit potential losses

c) Engaging in hedging activities to offset losses

d) Avoiding leverage and borrowed funds

e) Investing in long-term capital appreciation
 
Q 10. What is the key criterion for one company to control another company and be referred to as the holding or parent company?

a) Ownership of more than 25% of the voting rights

b) Ownership of more than 40% of the voting rights

c) Ownership of more than 50% of the voting rights

d) Ownership of more than 60% of the voting rights

e) Ownership of more than 75% of the voting rights
 
Q 11. What is the primary responsibility of the Ministry of Corporate Affairs in India?

a) Administration of the Competition Act 2002.

b) Regulating monetary policy.

c) Issuance of securities.

d) Administration of the Companies Act and Allied Acts.

e) Managing foreign exchange.
 
Q 12. How does a company access a larger pool of investors in the context of debt?

a) By issuing equity securities

b) By taking a bank loan

c) By issuing debt securities

d) By issuing common shares

e) By offering differential voting rights
 
Q 13. How are operating cash flows calculated, and what adjustments are made to convert net profit into operating cash flow?

a) Operating cash flows are calculated by adding back cash expenditures.

b) Operating cash flows are the same as net profit.

c) Net profit is converted into operating cash flow by subtracting non-cash expenditures.

d) Operating cash flow excluding changes in account receivables and payables.

e) Operating cash flows are irrelevant for financial analysis.
 
Q 14. Which of the following does NOT fall under the instances of fraud as cited in the regulations?

a) A representation made recklessly and carelessly.

b) A promise made without any intention of performing it.

c) A suggestion as to a fact believed to be true.

d) A wilful misrepresentation of the truth.

e) An honest representation made in good faith.
 
Q 15. Why might technical analysis be less suitable for long-term investing?

a) Business fundamentals rarely change in the long run.

b) Technical analysis relies on insider information.

c) Long-term trends are difficult to identify with technical analysis.

d) Technical analysis is based on short-term fluctuations.

e) Technical analysis ignores support and resistance levels.
 
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