NISM-Series-XV - Research Analyst Certification Exam - 39

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Q 1. What analogy does Charlie Munger use to describe projections?

a) A reliable source of information

b) A precise indicator of future performance 

c) An illusion created by liars

d) A trustworthy prediction tool

e) A factual representation of the future
 
Q 2.  According to the Code of Conduct, what should research analysts or research entities do regarding conflicts of interest?

a) Avoid addressing conflicts of interest.

b) Disclose conflicts of interest to competitors.

c) Effectively address conflicts of interest and make appropriate disclosures.

d) Engage in conflicts of interest for financial gain.

e) All Off Above 
 
Q 3. How does globalization impact end consumers?

a) Increases the divide between the rich and the poor

b) Reduces choices for consumers

c) Encourages creativity and innovation

d) Creates competition resulting in job loss

e) Provides greater access to foreign culture
 
Q 4. How can M&A activities lead to increased revenue and market share?

a) Through taxation benefits

b) By forming a new company

c) By acquiring loss-making companies

d) Through synergies, economies of scale, and market expansion

e) By absorbing the target company
 
Q 5. What forms of communication are covered by the advertisement code as per SEBI directives for Research Analysts/Investment Advisors?

a) Only printed materials such as pamphlets and brochures

b) Only electronic communications, including emails and messaging platforms

c) All forms of communication that may influence investment decisions

d) Only audio-visual forms of communication like television and motion pictures

e) Only publications in newspapers and magazines
 
Q 6. What is mentioned as a negative consequence of globalization?

a) Best allocation of global resources

b) Survival of the fittest through competition

c) Integration of developing economies

d) Increasing divide between the rich and the poor

e) Exposure to new technologies
 
Q 7. What advantages does geographical or other diversification offer in M&A activities?

a) Increased revenue and market share

b) Taxation benefits

c) Competitive advantage for the acquirer

d) Absorption of the target company

e) Formation of a new company
 
Q 8. As per SEBI directives, what is the minimum font size required for the standard warning in advertisements?

a) 8 font size

b) 12 font size

c) 10 font size

d) 14 font size

e) 6 font size
 
Q 9. How can understanding and pre-empting value migration benefit analysts?

a) By predicting short-term market trends

b) By ensuring cross-industry cooperation

c) By avoiding any disruption in the industry

d) By identifying suitable investment opportunities ahead of time

e) By focusing on geographic relocation for strategic reasons
 
Q 10. What are the two principal factors that drive the valuation of a firm using the DCF method?

a) Quantum of cash flow and present value

b) Expected rate of return and future market conditions

c) Estimated expected cash flow and determination of the discounted rate

d) Face value of the firm and current interest rate

e) None of the above
 
Q 11. What types of factors do Research Analysts consider during the analysis and decision-making process?

a) Geographical factors

b) Atmospheric conditions

c) Qualitative and quantitative factors

d) Political ideologies

e) Historical events
 
Q 12. What Legal factor might influence a business's decision to invest in a country?

a) GDP growth and its contributors

b) Balance payment and exchange rate stability

c) Stability in legislation and policy

d) Freedom of the press

e) Minimal corruption and bureaucracy
 
Q 13. What is the focus of the Price to Book Value Ratio (P/B ratio)?

a) How much an investor has to invest to earn a unit of profit

b) How much an investor needs to invest to gain ownership interest

c) How much an investor needs to invest to get a unit of dividend

d) How much an investor needs to invest to get ownership rights per unit of net assets

e) How much an investor needs to invest to get a unit of revenue
 
Q 14. What is explicitly excluded from the definition of 'securities' under the Securities Contracts (Regulation) Act, 1956?

a) Units linked to insurance policies and scripts

b) Government security and derivative instruments

c) Any unit providing a combined benefit risk on the life of individuals

d) Electronic Gold Receipts and government securities

e) Rights or interest in securities and units of pooled investment vehicles
 
Q 15. What is the unit pricing for commercial banks and NBFCs?

a) Number of transactions

b) Value of loan

c) Interest rates

d) Regulatory capital

e) Cash reserve ratio
 
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