NISM-Series-XV - Research Analyst Certification Exam - 41

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Q 1. What is the primary concern of regulatory authorities regarding research analysts in the securities market?

a) Ensuring high analyst compensation.

b) Minimizing market malpractices.

c) Promoting conflicts of interest.

d) Encouraging biased research reports.

e) Discouraging investor education.
 
Q 2. What is the primary objective of policymakers in any economy as mentioned in the introduction?

a) Maximize inflation rates

b) Promote economic stability and growth

c) Increase interest rates consistently

d) Control all macroeconomic variables

e) Ensure high unemployment rates
 
Q 3. What is the impact of insiders selling shares, according to Peter Lynch?

a) A sign of potential financial challenges

b) No significant impact on prospects

c) An indication of short-term market trends

d) An alarming signal for investors

e) Multiple reasons, not necessarily alarming
 
Q 4. According to Regulation 18(7), what documentary basis should a research analyst or research entity have for preparing a research report?

a) Oral communication

b) Feedback from clients

c) Independent views without any basis

d) Adequate documentary basis supported by research

e) Internal opinions
 
Q 5. What is the challenge in the industry classification systems mentioned?

a) Lack of standardization

b) Narrow definitions leading to overlooking competitors

c) Complexity of industrial jargon

d) Inadequate regulatory framework

e) Overemphasis on historical performance
 
Q 6. How is the exit price determined in the case of voluntary delisting?

a) By the stock exchange

b) Through the reverse book building process

c) Fixed by SEBI

d) By the company's board of directors

e) None of the above
 
Q 7. What is the advised action for Research Analysts without website/mobile applications regarding the Investor Charter?

a) they are exempt from the disclosure requirement

b) they should send the Investor Charter to clients via postal mail

c) they should prominently display it in their offices

d) they should conduct awareness programs for investors

e) they should send the Investor Charter to clients via SMS
 
Q 8. Which industry classification system is NOT mentioned?

a) Global Industry Classification Standard (GICS)

b) National Industry Classification (NIC)

c) North American Industry Classification System (NAICS)

d) Regional Industry Categorization (RIC)

e) None of the above
 
Q 9. What percentage of public shareholders must participate in the reverse book building for voluntary delisting to proceed?

a) 10%

b) 15%

c) 20%

d) 25%

e) 30%
 
Q 10. 5: What additional disclosure options are recommended for Research Analysts on their websites/mobile applications?

a) Displaying information about the regulatory authority

b) Provide a link to download mobile apps from other regulators

c) Displaying only positive client testimonials

d) Offering a live chat feature for immediate grievance redressal

e) Displaying a link/option to lodge complaints and a link to the SCORES website/app
 
Q 11. What does Charlie Munger suggest is a self-defeating business in the context of industry competition?

a) A business with limited product differentiation

b) A business with low barriers to entry

c) A business with a focus on innovation

d) A business with high pricing as the only basis for competition

e) A business with high switching costs for customers
 
Q 12. What is the formula for Earning Yield?

a) Earnings Per Share (EPS) / Dividend per share

b) Current price of stock / Earnings Per Share (EPS)

c) Earnings Per Share (EPS) Current price of stock

d) Dividend per share / Current price of stock

e) Dividend Per Share Earnings Per Share (EPS)
 
Q 13. Why is the importance of personal communication with management, despite the availability of information on the internet?

a) To gather confidential information

b) To verify claims made by the management

c) To replace the need for Internet research

d) To influence market prices positively

e) To minimize the role of Research Analysts
 
Q 14. What financial metrics are considered in the Performance analysis of SCP Analysis?

a) Market growth rate

b) Competitive intensity

c) ROE, ROIC, WACC

d) Business concentration

e) Threats from substitute products
 
Q 15. What does Adjusted Book Value (ABV) consider that is not factored in by the traditional book value?

a) Liabilities only

b) Off-balance sheet items

c) Market capitalization

d) Future cash flow

e) Net Asset Value

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