NISM-Series-XV - Research Analyst Certification Exam - 36

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Q 1. What distinguishes Foreign Direct Investment (FDI) from Foreign Portfolio Investment (FPI)?

a) FDI is passive, while FPI is active

b) FDI involves management participation, while FPI does not

c) FDI is short-term, while FPI is long-term

d) FDI has no upper limits on holding, while FPI does

e) FDI is considered hot money, while FPI is stable
 
Q 2. What is the impact of a stock split on per-share data such as earnings per share and book value per share?

a) Immediate improvement

b) Immediate deterioration

c) No impact

d) Impact depends on market conditions

e) Impact depends on the sector
 
Q 3. When do the provisions of sub-regulations (2) and (3) of Regulation 22 not apply?

a) When the research analyst has no expertise

b) When the subject company is small

c) When a third-party provider is not well-known

d) When there's no business relationship with a third-party research provider

e) When the research report is for internal use only
 
Q 4. What benefits does Foreign Direct Investment (FDI) bring to developing economies?

a) Increased interest rates

b) Higher inflation

c) Job creation, new technologies, and managerial skills

d) Reduced economic growth

e) Systemic risk for the economy
 
Q 5. How does a stock split influence the psychology of investors?

a) By providing economic benefits

b) By increasing the face value of shares

c) By reducing liquidity in the market

d) By impacting per-share data positively

e) By reducing the market price per share
 
Q 6. According to Regulation 23(1), which qualifications are required for employees of proxy advisers engaged in providing proxy advisory services?

a) Post-graduate degree in finance

b) Minimum qualification to be a graduate in any discipline

c) Certified financial planner

d) Chartered financial analyst (CFA) designation

e) No specific qualifications required
 
Q 7. What is the primary factor an analyst should consider when defining an industry for a company?

a) Global Industry Classification Standard (GICS)

b) Number of competitors in the industry

c) Common driving factors that influence the business

d) Historical performance of the industry

e) Compliance with industry regulations
 
Q 8. When can a company apply for relisting after delisting its shares?

a) 2 years after delisting

b) 5 years after delisting (voluntary)

c) 10 years after delisting (compulsory)

d) 15 years after delisting

e) None of the above
 
Q 9. What is the primary purpose of issuing securities?

a) To create a surplus for investors

b) Transfer resources from investors to issuers

c) To provide a mechanism for issuers to raise money

d) To eliminate the need for investors to exit

e) Limit the options available to savers
 
Q 10. What did Micromax, a cellular device company in India, focus on to gain a 10% market share in just three years?

a) Lowering product prices

b) Adopting similar strategies to competitors

c) Minimizing innovation

d) Focusing on special features at competitive prices

e) Creating high barriers to entry
 
Q 11. What does the Price to Earnings Ratio (PE Ratio) indicate?

a) the amount of money an investor needs to invest to receive 1 unit of profit

b) the market's willingness to pay a rupee of earnings

c) the ratio of stock prices to dividends

d) the growth prospects of the company

e) percentage increase in stock prices over a year
 
Q 12. What is one of the principles mentioned for effective communication with the management of a company?

a) Provide personal inclinations to influence decisions

b) Rely on internet information for insights

c) Avoid pre-meeting research to maintain objectivity

d) Maintain independence and neutrality of view

e) Only meet with top management for insights
 
Q 13. What does Conduct analysis primarily focus on in the context of industry analysis?

a) Numerical ratios

b) Financial performance

c) Business structure

d) Behavior and strategies of industry players

e) Market growth rate
 
Q 14. 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 15. What is the role of Regulator for Warrants and Convertible Warrants in the Indian Securities Market?

a) RBI

b) SEBI

c) Regulators under the Companies Act

d) NSE

e) MSEIL

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