NISM-Series-XV - Research Analyst Certification Exam - 46
NISM-Series-XV - Research Analyst Certification Exam - 46
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Q 1. What is the primary responsibility of the Department of Economic Affairs within the Ministry of Finance in India?
a) Management of government expenditures.
b) Formulation and monitoring of macroeconomic policies.
c) Oversight of direct and indirect taxes.
d) Administration of financial services.
e) Handling disinvestment policies.
Q 2. When might P/BV be a useful measure for valuing stocks?
a) When earnings are negative
b) When earnings are positive
c) When market capitalization is high
d) When assets are liquidated
e) When dividends are high
Q 3. Why is EBIT often referred to as operating profit, and how does it differ from EBITDA?
a) EBIT is not defined by accounting standards.
b) EBIT includes depreciation and amortization, while EBITDA does not.
c) EBIT excludes taxes, while EBITDA includes them.
d) EBIT is not relevant for financial analysis.
e) EBITDA is an arbitrary metric.
Q 4. What is the requirement for analysts who prepare research reports of listed companies, according to the set regulations?
a) they must trade in securities of the company immediately after preparing the report.
b) they are not allowed to disclose their shareholdings/interest in the company.
c) they should not trade in securities of the company for thirty days from the preparation of the report.
d) they can freely trade in securities of the company at any time.
e) they are exempt from any trading restrictions.
Q 5. What is the primary objective of passive investing in the securities market?
a) Earnings above the broader asset class return
b) Relying on constant evaluation of every security
c) Buying securities priced below fair value
d) Following an indexing strategy to represent the asset class
e) Identifying securities priced above their fair value
Q 6. How is ROE calculated in the Dupont analysis framework?
a) ROE = Net Profit / Equity
b) ROE = Net Profit Margin Asset Turnover Ratio Leverage
c) ROE = Asset Turnover Ratio Net Profit Margin / Leverage
d) ROE = Asset Turnover Ratio / Net Profit Margin / Leverage
e) ROE = Equity / Net Profit Margin Asset Turnover Ratio Leverage
Q 7. How does the Insolvency and Bankruptcy Code (IBC) consolidate and regulate?
a) Securities trading.
b) Corporate taxation.
c) Reorganization and insolvency proceedings.
d) Intellectual property rights.
e) Employment laws.
Q 8. What is the main purpose of a Contractionary fiscal policy?
a) Increase government spending
b) Cool down the economy
c) Boost Inflation
d) Lower taxes
e) Repay debts and acquire assets
Q 9. What is the primary impact of share consolidation on per-share data such as earnings per share, book value per share, and market price per share?
a) Immediate improvement
b) Immediate decline
c) No change
d) Fluctuates randomly
e) Depending on market conditions
Q 10. According to Regulation 32, what actions can be taken against a research analyst or research entity in case of default?
a) Warning letter
b) Monetary fine
c) Suspension of trading activities
d) Legal action under the Act or SEBI (Intermediaries) Regulations, 2008
e) No action can be taken
Q 11. Which framework is NOT mentioned as part of the established framework for understanding the industry landscape?
a) Michael Porter’s Five Force Model
b) PESTLE analysis
c) SCP analysis
d) SWOT analysis
e) BCG Matrix
Q 12. What does the FCFF model value in a business?
a) Value of Equity
b) Enterprise value
c) Cost of capital
d) Cost of debt
e) None of the above
Q 13. What is the expected role of Research Analysts (RAs) as described?
a) To solely interpret data without collecting it
b) To provide biased recommendations to clients
c) To collect and interpret data and convert it into unbiased recommendations
d) To follow rules and regulations loosely as specified by SEBI
e) Avoid using technology while interacting with clients
Q 14. Why may a metric like "revenue per employee" be more useful in analyzing a BPO (Business Process Outsourcing) industry compared to manufacturing industries?
a) Manufacturing industries are labor-intensive
b) BPO industries are capital-intensive
c) Manufacturing industries are service-driven
d) BPO industries have low employee turnover
e) Manufacturing industries rely on automated processes
Q 15. In the context of business valuation, why is it advised to differentiate between ROCE and ROE?
a) ROE is always higher than ROCE
b) ROCE reflects the true return on capital, while ROE can be manipulated by high-leverage
c) ROE is more accurate than ROCE
d) High leverage improves both ROE and ROCE
e) ROCE is irrelevant in business valuation