NISM-Series-XV - Research Analyst Certification Exam - 19
NISM-Series-XV - Research Analyst Certification Exam - 19
Q 1. What is prohibited regarding the usage of the SEBI logo by Investment Advisers and Research Analysts?
a) It can be used prominently in all advertisements
b) It should be used subtly in client agreements
c) It should not be used in any form
d) It can only be used on notice boards
e) It should only be used on statements or reports
Q 2. What makes an industry attractive from shareholders' perspective, according to the text?
a) High competition and low barriers to entry
b) Strong bargaining power of buyers and suppliers
c) Numerous substitutes for products/services
d) Low barriers to entry and weak suppliers' bargaining power
e) Weak barriers to entry and strong buyers' bargaining power
Q 3. What makes Enterprise Value/EBIT and Enterprise Value/EBITDA ratios more suitable from an acquirer's perspective?
a) they are based on the historical cost of assets
b) they are neutral to capital structure
c) they focus on sales metrics
d) they prioritize profitability over growth potential
e) they only consider common equity
Q 4. Why might companies in emerging markets prefer to issue bonds in USD or currencies of economically mature countries?
a) Because it limits their investor base
b) Because it carries significantly higher interest rates
c) Because it creates a foreign currency risk for the issuer
d) Because it allows them to avoid currency risk
e) Because it carries significantly lower interest rates
Q 5. What is the primary unit of pricing for retail businesses?
a) Quantity of Goods Sold
b) Real Estate Space Occupied
c) Full-time equivalent (FTE) per month
d) Number of Stores
e) Net Interest Margin
Q 6. What happens to the real rate of return when inflation increases, assuming a fixed return instrument like a bond?
a) It remains constant
b) It decreases
c) It increases
d) It becomes negative
e) It becomes unpredictable
Q 7. What is the primary purpose of Private Placement?
a) To issue shares exclusively to retail investors.
b) To increase public shareholding in a listed company.
c) To raise fresh capital through a public issue.
d) To retire debt and redo the capital structure.
e) To meet regulatory requirements for listing.
Q 8. Why is it important for analysts to focus on strengths or weaknesses related to opportunities and threats?
a) To identify the CEO's leadership style
b) To understand market trends
c) To assess the company's financial performance
d) To align internal capabilities with external conditions
e) To predict quarterly financial reports
Q 9. What does loss aversion bias suggest about the investor's perception of losses and gains?
a) Losses and gains are equally perceived.
b) Gains are more strongly preferred than losses.
c) Losses are twice as strong as gains in perception.
d) Gains are twice as strong as losses in perception.
e) Perception of losses and gains varies based on the investor's risk tolerance.
Q 10. What risks are associated with forward contracts?
a) Counterparty risk
b) Price risk of the underlying asset
c) Stringent margin requirements
d) Standardization risk
e) Settlement risk
Q 11. Why is prior knowledge of accounting considered an advantage for financial analysts?
a) To calculate market share accurately
b) To interpret economic conditions effectively
c) To understand the impact of industry-specific KPIs
d) To read and interpret financial statements
e) To evaluate a company's social responsibility
Q 12. Why is it important to assess whether the company has stable and growing return track records (ROE> 15% and ROCE > 15% continuously over the last 5 years)?
a) It guarantees high dividend payouts.
b) It indicates potential bankruptcy.
c) It reflects the company's ability to generate returns on equity and capital.
d) It is irrelevant to investment decisions.
e) It ensures short-term profitability.
Q 13. What protection mechanisms are mentioned to ensure forward contract honor?
a) Standardization
b) Formal legal agreements
c) Stringent margin requirements
d) Clearing corporate guarantees
e) Settlement in cash
Q 14. Which section of the fundamental analysis involves studying the interaction between various financial items and understanding the expected profits of a business?
a) Economic conditions analysis
b) Industry-specific KPI analysis
c) Financial statement analysis
d) Social responsibility analysis
e) Market sizing analysis
Q 15. What is the significance of evaluating whether the company has a stable and growing minimum 5-year dividend track record?
a) It determines the company's advertising strategy.
b) It indicates the company's commitment to shareholder returns.
c) It predicts the company's future stock prices.
d) It is not relevant for investment decisions.
e) It guarantees short-term stock appreciation.
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