NISM-Series-XV - Research Analyst Certification Exam - 12

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Q 1. What is a crucial constraint for the growth of retail businesses?

a) Regulatory Capital

b) Bench Strength

c) Same Store Sales Growth

d) Average Revenue per User (ARPU)

e) Customer Concentration Ratio
 
Q 2. Why is inflation risk considered less for equity shares compared to fixed return instruments?

a) Equity shares have higher interest rates

b) Equity shares are less affected by inflation

c) Equity shares have fixed returns

d) Equity shares are riskier

e) Equity shares have lower returns
 
Q 3. Who are considered Qualified Institutional Buyers (QIBs) in the context of Qualified Institutional Placements (QIPs)?

a) Retail investors.

b) Mutual funds, banks, and financial institutions.

c) Existing shareholders of a company.

d) Private placement investors.

e) Individuals participating in a public issue.
 
Q 4. What example illustrates how a lack of experience in self-driving cars can be a weakness for an Indian automobile company?

a) the company's strong execution capability

b) the absence of catalysts in the industry

c) A significant legal case distracting the company

d) the company's lack of experience in a particular strategy

e) A sequential decline in revenue or profit
 
Q 5. What does ownership bias, also known as the endowment effect, suggest about investors' perceptions?

a) Investors tend to undervalue their positions.

b) Investors place a lower value on things owned by others.

c) Investors place a higher value on their owned positions.

d) Investors are indifferent to the value of owned positions.

e) Investors value other rs' positions more than their own.
 
Q 6. In a Preferential Issue, to whom are specified securities issued on a private placement basis?

a) All existing shareholders of the company.

b) A select group of persons or entities.

c) Retail investors through a public issue.

d) Employees through stock option schemes.

e) Qualified Institutional Buyers (QIBs).
 
Q 7. What caution should analysts be aware of when conducting a SWOT analysis as outsiders?

a) the need for detailed financial disclosures

b) the importance of market share dynamics

c) the potential hiding of financial woes through creative accounting

d) the company's clout in the government

e) the impact of customer preferences on product innovation
 
Q 8. What is Gambler's fallacy in the context of investing?

a) Predicting random events based on past occurrences.

b) Ignoring trends and focusing on future predictions.

c) Believing that random events have no impact on investments.

d) Making decisions based solely on current market conditions.

e) Balancing nature through frequent occurrences.
 
Q 9. How does the term "Alternative Investment" differ from conventional investments?

a) Alternative Investments exclusively involve listed equities

b) Alternative Investments are regulated by other sectoral regulators

c) Alternative Investments are limited to fixed-income instruments

d) Alternative Investments include assets beyond conventional securities

e) Alternative Investments are covered under the regulation of SEBI
 
Q 10. What is the significance of asking "What could go wrong in the business" during analysis?

a) It ensures that entrepreneurs talk about the risks

b) It helps identify apparent and known risks

c) It classifies businesses as risk-free

d) It avoids businesses that have unknown risks

e) It assesses the profit potential of a business
 
Q 11. What does a 'hold' recommendation typically indicate in terms of expected returns?

a) More than 10%.

b) Between -10% and 10%.

c) Less than -10%.

d) Over 20%.

e) Exactly 0%.
 
Q 12. What is a key characteristic of equity investments in comparison to debt investments?

a) Fixed rate of interest

b) Return of principal at maturity

c) Ownership of the business

d) Steady income-oriented returns

e) Short-term investment horizon
 
Q 13. Which financial asset category includes investments, loans, advances, and financial claims that are likely to be received in the long term?

a) Current financial assets

b) Non-current financial assets

c) Intangible financial assets

d) Goodwill

e) Investment in joint ventures
 
Q 14. What aspects of the securities market does SEBI regulate about acquisitions of shares and takeovers of companies?

a) Regulating monetary policy.

b) Protecting the interests of investors.

c) Issuing currency and coins.

d) Managing foreign exchange.

e) Regulate substantial acquisition of shares and takeover of companies.
 
Q 15. How is the Price-to-Book Value Ratio (P/BV) calculated?

a) Market Capitalization / Annual Net Sales

b) Current Market Price (CMP) / Earnings per Share

c) Net worth / Number of shares outstanding

d) Annual Net Sales per Share / Current Market Price (CMP)

e) Earnings Before Interest and Taxes (EBIT) / Annual Net Sales

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