NISM-Series-XV - Research Analyst Certification Exam -43

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Q 1. What is the significance of External Bonds, also known as Euro bonds?

a) they are issued in the currency of the issuer's home country.

b) they carry higher interest rates.

c) they are issued outside the country in a different currency.

d) the y eliminates currency risk for the issuer.

e) they are only denominated in the local currency.
 
Q 2. How is the Interest Coverage Ratio calculated?

a) Interest Coverage Ratio = EBIT / Interest Expenses

b) Interest Coverage Ratio = Current Assets / Current Liabilities

c) Interest Coverage Ratio = Long Term Debt / Net-worth

d) Interest Coverage Ratio = EBITDA / Net Sales

e) Interest Coverage Ratio = PAT / Net-worth
 
Q 3. What type of qualification is explicitly mentioned in Regulation 7(1)(iii) as an alternative for individuals registered as research analysts?

a) Post-graduate degree in finance.

b) Professional qualification from a recognized university.

c) Accredited post-graduate diploma.

d) Certification in portfolio management.

e) Post Graduate Program in the Securities Market (Research Analysis) from NISM.
 
Q 4. What does the unemployment rate measure, and how does it relate to the economic cycle?

a) Measures employed and unemployed populations

b) Measures only the unemployed population

c) Measure income levels in the economy

d) Measures the workforce participation rate

e) Related to the economic cycle by rising during expansions and falling during slowdowns
 
Q 5. Why would companies consider splitting their shares?

a) To reduce the number of outstanding shares

b) To increase the face value of shares

c) To decrease liquidity in the market

d) To restrict investor participation by keeping share prices high

e) To provide economic benefits to shareholders
 
Q 6. What disclosure is required under Regulation 22(3) when distributing a third-party research report?

a) Disclosure of the research analyst's personal opinions

b) Disclosure of the subject company's financials

c) Disclosure of a third-party research provider's conflict of interest

d) Disclosure of market conditions

e) No disclosure is required
 
Q 7. When does cross-industry migration occur?

a) When industries at the upper end of the value chain gain at the cost of those at the lower end

b) When one industry gains at the cost of another industry

c) When competitors within an industry cooperate for mutual benefit

d) When a phenomenon disrupts within a single industry

e) When value migrates across geographies
 
Q 8. What does the discounted cash flow (DCF) approach to valuation require to be known with certainty?

a) Quantum of cash flow and timings

b) Expected rate of return by investors

c) Face value of the asset

d) Future market conditions

e) None of the above
 
Q 9. What is an example of migration across companies in the same industry mentioned?

a) the fall in the price of mobile services in the Indian telecommunication space

b) the decline of the film roll industry due to the advent of digital cameras

c) the increase in consumption of digital products and traction for digital content providers

d) the decline in shareholder value for Research in Motion (Blackberry) with the advent of 2G technology

e) the increase in shareholder value for Kodak with the advent of digital cameras
 
Q 10. How is the value of a business estimated using the DCF method?

a) By multiplying the free cash flow with the discounted rate

b) By finding inflows over outflows (Free Cash Flows) and discounting them at an appropriate rate

c) By using the face value of the business as the discount rate

d) By adding inflows and outflows without discounting

e) None of the above
 
Q 11. Where can Research Analysts gather economic information?

a) Social media platforms

b) International Monetary Fund (IMF)

c) Company financial statements

d) Industry-specific journals

e) Employee interviews
 
Q 12. Which aspect of PESTLE analysis evaluates factors like technological advancements and innovation?

a) Political

b) Economic

c) Socio-cultural

d) Technological

e) Legal
 
Q 13. How is Return on Invested Capital (ROIC) calculated?

a) EBIT / Total Capital Employed

b) Net Profits / Equity capital

c) Earnings / Invested Capital

d) Market Capitalization / Balance sheet value of equity

e) Net Profits / Total Capital Employed
 
Q 14. What is the primary objective of valuation?

a) To set market prices

b) To determine asset ownership

c) Related price to value

d) To control market emotions

e) None of the above
 
Q 15. Which of the following is not one of the three broad categories of key constraining factors for industries?

a) Demand side constraints

b) Internal constraints

c) Supply-side constraints

d) Regulatory constraints

e) Environmental constraints

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