NISM-Series-XV - Research Analyst Certification Exam - 15
NISM-Series-XV - Research Analyst Certification Exam - 15
Q 1. When might EV/Capacity be an appropriate metric for valuation?
a) For well-established companies with stable financial metrics
b) For start-ups or companies undergoing special situations
c) For companies in the technology sector
d) For companies in the retail sector
e) For companies with high market capitalization
Q 2. What is two-way fungibility?
a) the ability to trade depositary receipts in both local and foreign markets
b) the fungibility of shares traded in OTC markets
c) the conversion of DRs into shares in the domestic stock exchange
d) the fungibility of shares within the country of issuance
e) the trading of DRs in OTC markets only
Q 3. What type of tax is Value Added Tax (VAT), and which products does it currently apply to?
a) Production tax: Electronics and Textiles
b) Sales tax: Liquor, Petrol, and Diesel
c) Import tax: Electronics and Medicines
d) Goods and Service Tax (GST); All goods and services
e) Production tax: All goods and services
Q 4. How is Country Risk defined in investments?
a) Risk associated with individual companies
b) Risk associated with global economic trends
c) Risk related to a country's ability to honor financial commitments
d) Risk associated with market demand
e) Risk related to changes in interest rates
Q 5. What is the main function of depositories in the securities market?
a) Providing credit facilities to investors.
b) Managing funds settlement for investors.
c) Issuing new securities to the market.
d) Holding securities in electronic form for investors.
e) Offering trading terminals for investors.
Q 6. What is the significance of the top management team's past track record in senior positions when evaluating competency?
a) To predict quarterly financial reports
b) To assess the CEO's leadership style
c) To understand market trends
d) To analyze customer preferences
e) To provide insight into their ability to handle business challenges
Q 7. How is liquidity measured using the stock turnover ratio?
a) By dividing the number of outstanding shares by the traded value.
b) By dividing the market capitalization by the traded value.
c) By dividing the number of shares traded by the number of outstanding free float shares.
d) By dividing the market capitalization by the number of shares traded.
e) By dividing the traded value by the number of outstanding free float shares.
Q 8. Who facilitates investors to hold and transact securities in dematerialized form in the securities market?
a) Stock Exchanges
b) Depositories
c) Depository Participants
d) Clearing corporations
e) Registrar to the Issue
Q 9. Why is the long association of the top management team with the current company important for evaluating performance?
a) To predict quarterly financial reports
b) To assess the CEO's leadership style
c) To understand market trends
d) To analyze customer preferences
e) To assess the likelihood of continuing similar performance
Q 10. What does the traded value turnover ratio measure?
a) the ratio of traded value to outstanding shares.
b) market capitalization relative to the traded value.
c) the number of outstanding shares relative to the traded value.
d) the liquidity of a stock relative to its market capitalization.
e) the ratio of traded value to market capitalization.
Q 11. How do futures contracts differ from forward contracts in terms of trading venues?
a) Both are traded Over-the-counter (OTC)
b) Forward contracts are traded on stock exchanges, while futures are OTC
c) Both are standardized exchange-traded contracts
d) Forward contracts are subject to stringent margin requirements
e) Futures contracts are negotiated between known parties
Q 12. What does the bottom-up approach to market sizing involve?
a) Calculating industry-specific KPIs
b) Obtaining revenue numbers from financial statements
c) Assessing the impact of economic conditions on the company
d) Evaluating a company's social responsibility
e) Reading and interpreting financial statements
Q 13. According to the checklist, why is assessing the company's capex plans and financing strategies important?
a) It ensures the company's bankruptcy.
b) It predicts short-term stock performance.
c) It is irrelevant to investment decisions.
d) It provides insights into the company's growth plans and financial discipline.
e) It guarantees high dividend yields.
Q 14. How are blue-chip stocks characterized in terms of market cap?
a) Small-cap stocks
b) Large-cap stocks
c) Mid-cap stocks
d) Stocks with high volatility
e) Stocks with low liquidity
Q 15. What is the characteristic of "Core working capital" in comparison to the general "Working capital" calculation?
a) It includes short-term investments
b) Only factors in current assets and liabilities used or arising out of core operations
c) It represents obligations to be fulfilled within one year
d) It includes long-term debt
e) This includes all short-term obligations