NISM-Series-XV - Research Analyst Certification Exam - 29

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Q 1. What is the unique feature of Floating-Rate Bonds that distinguishes them from vanilla bonds?

a) Fixed coupon rate

b) Resetting coupon periodically

c) Issued at a discount

d) Cap and Floor limits

e) Short-term maturity
 
Q 2. What does EBITDA Margin indicate about a company's operations?

a) It measures the liquidity of the company.

b) It evaluates the company's profitability based on operations and direct costs.

c) It assesses the long-term debt of the company.

d) It reflects the company's cash flow.

e) It measures the company's solvency.
 
Q 3. What is the global consensus regarding the regulatory framework for research analysts?

a) No regulatory framework is required.

b) A regulatory framework is needed for partial reports.

c) Regulatory framework for impartial reports is essential.

d) The regulatory framework for conflicts of interest is unnecessary.

e) Regulatory framework for governance standards is not important.
 
Q 4. How do Floating-Rate Bonds manage interest rate risk?

a) By having a fixed coupon rate

b) With periodic coupon payments

c) By having Cap and Floor limits

d) By adjusting coupons periodically based on market rates

e) By having a longer maturity period
 
Q 5. How is EBITDA Margin calculated?

a) EBITDA Margin = Net Sales / EBITDA

b) EBITDA Margin = EBITDA / Net Profit

c) EBITDA Margin = EBITDA / Net Sales

d) EBITDA Margin = EBITDA + Net Sales

e) EBITDA Margin = Net Profit / EBITDA
 
Q 6. What role does investor education play in managing conflicts of interest related to research analysts?

a) Investor education is not relevant to managing conflicts of interest.

b) Investor education is essential for promoting biased research.

c) Investor education is crucial for minimizing market malpractices.

d) Investor education is encouraged to increase conflicts of interest.

e) Investor education is unrelated to the role of research analysts.
 
Q 7. What contradicts the thought process of fundamental analysis according to the provided information?

a) Identify a good investment option.

b) Investing at the right price.

c) Efficient Market Hypothesis (EMH).

d) Short-term price movements.

e) Market price diverging from fair value.
 
Q 8. How can a company raise funds through equity issuance?

a) Debt issuance

b) Rights issue

c) Merger and acquisition

d) Asset divestiture

e) Debt buyback
 
Q 9. According to Regulation 15, what must be ensured by research analysts or research entities to maintain independence in research activities?

a) Independence is not necessary.

b) Independence from market trends only.

c) Independence from regulatory authorities.

d) Independence from other business activities.

e) Independence only during market hours.
 
Q 10. What is the impact of a large fiscal deficit on interest rates and corporate borrowing?

a) Lowers interest rates and makes borrowing easy

b) Has no impact on interest rates

c) Increases interest rates and makes borrowing difficult

d) Reduces interest rates

e) Stimulates economic growth
 
Q 11. What is the purpose of share consolidation for a company?

a) To decrease the face value of shares

b) To increase the number of outstanding shares

c) To maintain paid-up capital

d) To decrease the market perception of the company

e) None of the above
 
Q 12. What is the responsibility of a research analyst or research entity in case of a change in control of the entity according to Regulation 24(3)?

a) Obtain approval from the shareholders

b) Notify the public immediately

c) Seek approval from the Board

d) Notify the Securities and Exchange Board of India (SEBI)

e) No action is required
 
Q 13. Which industry classification system is mentioned as widely used in the financial sector for global investors?

a) National Industry Classification (NIC)

b) Global Industry Classification Standard (GICS)

c) North American Industry Classification System (NAICS)

d) International Industry Framework (IIF)

e) Sectoral Industry Classification (SIC)
 
Q 14. When is the term "share swap" commonly used?

a) During an initial public offering (IPO)

b) During a bankruptcy proceeding

c) In the context of a merger or acquisition

d) When a company issues dividends

e) None of the above
 
Q 15. According to the Securities Contracts (Regulation) Act, 1956, what does the term 'Securities' include?

a) Only shares and debentures of incorporated companies

b) Derivatives and units of collective investment schemes

c) Only government security and derivative instruments

d) Shares, stocks, bonds, debentures, and various other instruments

e) Units of mutual fund schemes and government securities
 
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