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Nism Series 15 Model Paper
Nism Series 15 Model Paper
Nism Series 15 Model Paper
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NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 1 An agent who buys and sells shares in a recognised stock exchange is
known as ______ .
(b) Underwriter
Question 3 The Market Capitalisation of a firm is Rs 50 lakhs and it has a total debt
of Rs 10 lakhs. The cash in hand is Rs 3 lakhs. What is the Enterprise
Value of the firm ?
(a) Rs 43 Lakhs
(b) Rs 57 Lakhs
(c) Rs 63 Lakhs
(d) Rs 50 Lakhs
(a) TRUE
(b) FALSE
(a) Rs 36500
(b) Rs 25000
(c) Rs 73000
(d) Rs 56500
(a) FALSE
(b) TRUE
Inventory Turnover ratio gives the number of times inventory is rolled over by
Answer a company.
Explanation Since the average age of inventory is 10 days, this means in 365 days the
inventory is rolled 36.5 times (365/10). This is the Inventory turnover.
Inventory Turnover = Sales / Inventory
36.5 = Sales / 2000
Sales = 36.5 x 2000 = Rs 73000
Question 7 Research Analysts who are individuals or partnership firms shall have net
tangible assets of value not less than Rs. _____ .
(a) Rs 1 lakh
(b) Rs 2 lakhs
(c) Rs 5 lakhs
(d) Rs 10 lakhs
Question 9 Calculate the Sales of a business with the following data : EPS = 5
No. of shares outstanding = 50000 EBIT% is 40% EBIT is 400% of Net
Profit.
(a) Rs 50 Lakhs
(b) Rs 25 Lakhs
(d) Rs 20 lakhs
Question 10 "The bye-laws of the stock exchanges are same across exchanges and need
to be approved by SEBI". State whether True or False.
(a) TRUE
(b) FALSE
Question 11 Forward contracts are Exchange Traded Contracts -State True or False ?
(a) TRUE
(b) FALSE
Question 12 The total current assets of a company are Rs 80000, the Inventory is Rs
20000 and the Quick Ratio is 2, Calculate the Current Ratio.
(a) 2
(b) 2.15
(c) 2.66
(d) 3
(a) TRUE
(b) FALSE
Question 15 The price of the stock of M/s PQR Ltd is Rs 100 and the PE ratio is 20.
Find the amount retained by the company if the retention ratio is 30%.
(a) Rs 5
(b) Rs 30
(c) Rs 2.3
(d) Rs 1.5
Answer USDINR rate, attrition rate among employees, concentration of revenues with
Explanation selected clients, concentration of geographies etc. are important parameters
to watch out for in IT and related sectors.
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 17 Research Analysts facilitates the decision making by the investors in both
investments and disinvestment's - State True or False ?
(a) TRUE
(b) FALSE
(a) RBI
(a) TRUE
(b) FALSE
(a) Microeconomics
(b) Macroeconomics
Question 22 Corporate Governance basically takes into account the efficiency aspect
of the management - State True or False ?
(a) TRUE
(b) FALSE
Question 23 When one invests in Equity Shares, which of the below options is certain ?
Question 24 The analysis done more from the perspective of a business which is
looking to setup unit offshore and analyzing several countries to choose
from is known as ________ .
(a) Internal
(b) External
(c) Physiological
Question 26 SEBI has given guidelines for Research Analyst with the main intention of
_________ .
(d) Both for building confidence and investors never losing their money
(a) Basically all types of investment will result in capital appreciation over a long
period of time
Question 28 The Depository Receipts which are issued in India and listed on an Indian
Stock Exchange with foreign stocks as underlying shares are known as
_______.
Correct Answer 27 Basically all types of investment will result in capital appreciation over a long
period of time
(c) Manipulation
Question 30 Price to earnings ratio of a business is 8, price to book value ratio of this
business is 4, book value per share is Rs. 12 and outstanding number of
shares are 8000, what would be the return on equity of this business?
(a) 30%
(b) 38%
(c) 50%
(d) 62%
(a) Decrease
(b) Increase
(c) no change
Correct Answer 32 [Current price of stock/ Earnings Per Share] / Growth rate
Answer To understand the difference between a normal PE Ratio and PEG Ratio, lets
Explanation take an example.
There are two businesses with P/E ratios 12 and 28. They have different
growth potentials of 10 % and 40 % for next few years. If we look at PE Ratio,
we will derive that the stock with PE of 12 is cheaper than the stock with PE
28.
However if we calculate the PEG ratio ie - 12/10 and 28/40 , we will find that
the second stock is cheaper due to the high growth rate of the company.
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 33 A company has a sales of Rs 28000 and from this they have a operating
profit of Rs 3900. If the corporate tax is at 30%, calculate the net profit
margin of the company. ( There is no interest expense )
(a) 9.75%
(b) 10.80%
(c) 13.20%
(d) 16.75%
Question 34 The Networth of a business is Rs 5,00,000 and the debt on Balance Sheet
is Rs 3,00,000. The Market Capitalisation is Rs 10,00,000. Calculate the
Capital Employed of this business.
(a) Rs 12,00,000
(b) Rs 8,00,000
(c) Rs 5,00,000
(d) Rs 2,00,000
Question 35 When a dividend is declared during the financial year, its called as
_______ .
Question 36 Which of the following options is NOT true with respect to Equity
Capital?
(c) The Equity share holders have the first right of claim on the company's assets
in case of liquidation
Correct Answer 36 The Equity share holders have the first right of claim on the company's assets
in case of liquidation
Answer The Equity share holders have one of the LAST claim on the company's assets
Explanation in case of liquidation.
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 37 In PESTLE Analysis, healthy public finances and a consistent fiscal policy
are considered under _______ .
Question 38 Calculate the Market Capitalisation of a company with the following data
: Paid Up Capital - Rs 50 Lakhs Face Value of Shares - Rs 5 PE Ratio - 8
EPS - Rs 5
Question 40 __________ is also concerned with the financial policy relating to the
utilization of proceeds of disinvestment.
Answer FDI brings in new and latest technologies and not traditional technologies.
Explanation
Question 42 Some investors look for information to prove that they are right - Which
behavioural bias is this ?
(d) Anchoring
Question 45 The Net Profit margin of a company is 25%. The EBIT % of this
company is 50% with EBIT levels of Rs 450000. No. of shares outstanding
are 30000. Calculate the Earning per share (EPS).
(a) 15
(b) 11.5
(c) 9.8
(d) 7.5
(a) 280
(b) 3.11
(c) 4.53
(d) 90
Question 47 Old companies which have a long track record give confidence to the
investors because _________ .
(b) these companies have more knowledge and experience within to meet new
challenges
(a) Valuation
(b) Quantitative
(c) Qualitative
(a) I
(b) II
(c) III
(d) IV
Question 51 The Corporate Action of __________ will lead to change in the per share
data (earning per share, book value per share, market price per share
etc.)
Question 52 The Total Assets of a company are Rs 35000 and the Total Liabilities are
Rs 18000. Calculate the Equity to Asset Ratio.
(a) 1.51
(b) 0.8
(c) 0.48
(d) 1.94
(a) Microeconomics deals with the understanding and working of a free market
economy
(b) Microeconomics helps us understand how the prices of the products and
services get determined in an economy
(c) Microeconomics helps us understand how individuals and firm behave with
regard to prices and how goods and services in an economy are distributed
among its various participants.
Question 54 Companies Act requires that a company which wants to raise further
capital through an issue of shares must first offer them to the existing
shareholders and such an offer of shares is known as ______.
Question 55 The focus area(s) for an analyst while analysing an Economy would be
______ .
(b) Flows from Foreign Direct Investment (FDI) and Foreign Portfolio Investors
(FPIs)
Question 56 SEBI can take which of the following action against an intermediary?
Answer The focus areas for an analyst while analysing an Economy are :
Explanation - Changes in various macro-economic factors like - National income, Inflation,
Interest rate and Unemployment rate
- Fiscal and Monetary Policies and their impact on the economy
- Flows from Foreign Direct Investment (FDI) and Foreign Portfolio Investors
(FPIs)
- Savings and investment patterns
- Global factors that impact the GDP growth based on export and import
transactions
Question 58 The P/E ratio of a company is 20 and the price of its stock is Rs 340 per
share. The company has declared a dividend of Rs 20. Calculate the EPS
of this company.
(a) Rs 20
(b) Rs 17
(c) Rs 16
Correct Answer 57 Market Price of the Share X The No. of shares outstanding
Answer Market Capitalisation is arrived at by multiplying the market price with the
Explanation number of outstanding equity shares.
Correct Answer 58 Rs 17
Answer P/E ratio = Market Price of Stock / EPS
Explanation Therefore EPS = Market Price of Stock / PE ratio
= 340 / 20
= 17
(Dividend need not be considered, the current market price is relevant)
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 59 Buy-side Analysts generally work for money managers like mutual funds,
hedge funds, pension funds, or portfolio managers that purchase and sell
securities for their own investment accounts or on behalf of their clients -
State True or False ?
(a) TRUE
(b) FALSE
Question 60 Warrants are options that entitle an investor to buy _______ of the issuer
company after a relatively _____ period of time at a given price.
Answer Warrants are options that entitle an investor to buy equity shares of the issuer
Explanation company after a specified time period at a given price. These are usually long
term instruments.
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 61 A ‘ _________ Wall’ policy separates 'insider areas' from 'public areas'
in a firm.
(a) Indian
(b) Chinese
(c) Berlin
Question 62 The SEBI Act empowers SEBI to take following actions EXCEPT -
(a) Impound and retain the proceeds or securities in respect of any transaction
which is in violation or prima facie in violation of regulations
Answer To prevent the misuse of confidential information the organisation shall adopt
Explanation a “Chinese Wall” policy which separates those areas of the organisation/firm
which routinely have access to confidential information ie. “insider areas”
from those areas which deal with sale/marketing/investment advice or other
departments providing support services considered public areas.
The employees in the insider area shall not communicate any Price Sensitive
Information to anyone in the public area.
Answer SEBI directly does not develop and administer the certification exam. It has
Explanation appointed NISM for this purpose.
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 63 M/s Highgrowth Industries Ltd has total assets of Rs 40,00,000 and a Net
Income of Rs 3,00,000. The EPS is 0.60 and the Price to Book Value is 8.
The Return on Equity is 25%. Find the current market price of the
company's share.
(a) Rs 9.60
(b) Rs 14.40
(c) Rs 17.60
(d) Rs 19.20
Return on Equity ie. Net Profit is 25% of Equity. Net Profit is Rs 300000
So Equity will be 300000 / 25 x 100 = 12,00,000
Question 66 The formula for calculating the Book Value per share of a company is
______ .
Question 67 The current price of a stock is Rs 180 and the last EPS was Rs 10, what
will be its Price to Earning ratio ?
(a) 1800
(b) 180
(c) 18
(d) 1.8
Correct Answer 67 18
Question 69 An industry which does not face the threat of new competitors coming in
would be an attractive industry for investors/owners - State True or
False ?
(a) TRUE
(b) FALSE
Question 71 A company increases the prices of its products yet the demand does not
fall. This could be due to ________ .
Question 73 _________ contains policy measures of the Government which deal with
government’s revenues and expenses.
Question 75 If a stock has exceeded its Target Price, an analyst may recommend
__________.
Question 77 When does the per share data (earning per share, book value per share,
market price per share etc.) witnesses immediate deterioration.
Question 78 What is the earnings yield, if the price of a stock is Rs. 540 and EPS is Rs.
32 ?
(a) 5.92%
(b) 0.06%
(c) 16.87%
(d) 0.17%
Question 79 The sales of a company is 200% of Operating Profit. The Net Profit is
one fourth of sales. What is the Net Profit % of Operating Profit ?
(a) 50%
(b) 40%
(c) 45%
(d) 30%
(b) Disclosure
(c) Transparency
(d) Surveillance
Question 82 _________ captures the sources and uses of funds in the business over a
period of time.
Question 83 As per the Boston Consulting Group (BCG) Analysis, Tata Nano can be
considered as an example of a Question Mark, which succeeded - State
True or False ?
(a) FALSE
(b) TRUE
Question 84 Which of the below options is not true with respect to Stock Split ?
(c) Stock split is usually done when the price of a stock becomes quiet high
Question 85 A bond with face value Rs 5000 has a coupon rate of 10%. The expected
rate of return is also 10%. The value for this bond will be __________ .
(a) The demand and supply of its securities in the stock exchange
Answer If expected rate of return by investors is same as of coupon rate, then bond
Explanation would have same value as facevalue.
If expected rate of return by investors is higher than the coupon rate, then
bond would have value less than facevalue and vice versa.
It is based on present and future value computations.
Correct Answer 86 The demand and supply of its securities in the stock exchange
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 87 The operating profit margin of a business is 40% and the operating
profit is two times of Net Profit. Calculate the Net Profit margin.
(a) 30%
(b) 25%
(c) 27.50%
(d) 18%
Question 88 'Whether company has stable and growing 5 years dividend track
record' is a parameter to be considered in ___________ .
Answer Research reports are generally divided into three broad` sections – Qualitative
Explanation aspects, Quantitative aspects and then Valuation parameters.
Qualitative parameters take care of aspects like business/revenue model,
SWOT analysis, competition in the industry, technology aspects etc.
Quantitative parameters would consist of financial aspects such as ratio
analysis, analysis of cash flows , dividend history etc.
Valuation parameters would consist of intrinsic value, P/E, P/BV, margin
of safety aspects.
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 89 A trader is expecting the interest rates to fall in the near future. Which
strategy he should use to benefit if his view turns out to be correct ?
Question 90 The Sale and Purchase of new issues of stocks happen in _______ .
Answer When interest rates fall, bond holders experience a rise in the price of bonds
Explanation as there is an inverse relationship between bond prices and interest rates.
As the trader is not sure when the fall in interest rates will be announce, he
should buy the long dated high coupon bonds.
Answer The primary market, also called the new issue market, is where issuers
Explanation raise capital by issuing securities to investors.
The Issuers / Promoters sell their shares to the Public / Investors thro' an IPO
- Initial Public Offer.
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 91 A high PE stock relative to the peer group numbers and the market PE,
is seen as a __________ stock.
(a) Cheap
(b) Expensive
Answer The two formulae for calculating Dividend Payout Ratio are :
Explanation - Yearly Dividend Per Share / EPS
- Total Dividend / Net Income.
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 93 An industry where rivalry is high, like the aviation and telecom space,
the end result will be ______ pricing power and _______ incomes for the
industry participants.
(a) if it has excess cash and there are lack of profitable investment opportunities
(c) to reduce equity and resultantly increase the leverage in the company
Question 95 Investment advisers work with investors to help them decide on asset
allocation and make a choice of investments based on ________.
(b) CAGR is calculated as the sum of annual returns over the holding period
(c) CAGR does not take into account the timings of cash flows into account
Answer The CAGR method simply uses the beginning and ending value over a
Explanation holding period. It does not take into account the timings of cashflow.
The Internal Rate of Return (IRR) method considers multiple cash flows and
periods.
NISM SERIES XV – RESEARCH ANALYST
CERTIFICATION EXAM : REAL FEEL MOCK TEST
Question 97 The forecasting of stock prices based on their historical prices is called
______.
(a) Economic analysis
Question 98 M/s ABC Ltd has a P/E Ratio of 12 with a growth potential of 10% and
M/s XYZ Ltd has a P/E Ratio of 28 with a growth potential of 35% for
the next few years. Based on Growth Adjusted Price to Earnings Ratio
(PEG Ratio), which one is cheaper ?
(d) RBI
Question 100 The growth rate can be calculated as the ________ of the retention rate
and the return on equity.
(a) product
(b) division
(c) summation
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