NISM-Series-XV - Research Analyst Certification Exam - 4

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1. How is the number of discounted shares a shareholder can buy in a rights issue determined?

a) Based on the prevailing market prices

b) Proportional to the number of shares held by the shareholder

c) Fixed numbers for all shareholders

d) Random allocation by the company

e) Based on the company's net profit
 
Q 2. 6: What does Regulation 19(vi) specify regarding disclosures in research reports and public appearances?

a) It specifies the disclosure of market conditions

b) It specifies the disclosure of ownership and material conflicts of interest

c) It specifies the disclosure of compensation details

d) It specifies the disclosure of personal life details

e) It specifies disclosures as specified by the Board under any other regulations
 
Q 3. What is mentioned as a challenge in market sizing?

a) Lack of unorganized players

b) Availability of private company information

c) Accuracy of assumptions made during sizing

d) Bottom-up approach being more reliable

e) Simplification of data aggregation
 
Q 4. What are some reasons for carrying out valuations of assets/businesses/liabilities?

a) Predicting stock market trends

b) Determining asset ownership

c) Mergers and Acquisitions

d) Assessing macroeconomic factors

e) All of the above
 
Q 5. Which entities, in addition to research analysts, also provide research reports?

a) Investment bankers and regulators

b) Newspapers, media, and consolidators of information

c) Asset managers and portfolio managers

d) Mutual and hedge funds

e) Research originators and boutique firms
 
Q 6. Which environmental factor might act as a deterrent for investors entering the country, especially as it pushes to become a manufacturing hub?

a) Economic policies

b) Political stability

c) Environmental issues

d) Legal frameworks

e) Socio-cultural factors
 
Q 7. A company's stock is currently trading at $150 per share. It has 1,000,000 shares outstanding. If the company announces a new issue of 200,000 shares at $140 per share, what will be the company's new market capitalization?

A) $140,000,000

B) $150,000,000

C) $168,000,000

D) $170,000,000

E) $172,000,000

 
Q 8. What distinguishes Preference Shares from common equity shares?

a) Preference shares carry voting rights, while common equity shares do not

b) Preference shares have a right over the residual assets of the company, unlike common equity shares

c) Preference shares do not carry voting rights and do not have a right over the residual assets of the company

d) Preference shares pay interest, unlike common equity shares

e) Preference shares have a fixed maturity period, unlike common equity shares
 
Q 9. How is a surcharge calculated for profits above Rs.10 crores, according to the information provided?

a) 5% of taxes payable

b) 7% of taxes payable

c) 10% of taxes payable

d) 12% of taxes payable

e) 15% of taxes payable
 
Q 10. 5: What indicates the highest degree of creditworthiness in a credit rating agency's assessment?

a) BBB

b) A1

c) CC

d) AAA

e) D
 
Q 11. How does the clearing corporation reduce counterparty risk in the stock exchanges?

a) By directly negotiating trades.

b) By acting as the buyer to every seller and seller to every buyer.

c) By settling obligations through direct counterparties.

d) By involving multiple clearing houses.

e) By guaranteeing profits for investors.
 
Q 12. What is the agency risk in the context of companies?

a) the risk of economic recession

b) the risk of technological disruptions

c) the risk of separation between ownership and management

d) the risk of increased competition

e) the risk of regulatory headwinds
 
Q 13. 1: What is the significance of the market, according to Benjamin Graham's quote?

a) In the short run, it is a weighing machine; in the long run, it is a voting machine.

b) Achieving superior results is easier in the short run than in the long run.

c) Achieving satisfactory results is harder in the short run than in the long run.

d) In the short run, it is a voting machine; in the long run, it is a weighing machine.

e) Achieving superior results is easier than most people realize.
 
Q 14. How does hedging differ from trading in terms of risk and gains?

a) Hedging involves higher risk and unlimited gains

b) Hedging involves limited risk as well as gains

c) Trading involves higher risk and unlimited gains

d) Trading involves limited risk as well as gains

e) Both hedging and trading have the same risk and gain profiles
 
Q 15. In the context of equity analysis, why are consolidated financial statements generally preferred over stand-alone financials?

a) Stand-alone financials provide a more holistic picture of the group's performance.

b) Consolidated financials offer more detailed information.

c) Stand-alone financials are more accurate.

d) Consolidated financials are required by law.

e) Stand-alone financials include more subsidiaries.
 
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