Research Analyst – How to Become a SEBI Registered Research Analyst?

Introduction:

Investing in the stock market is a common avenue for many investors, whether directly in individual stocks or through mutual funds. However, navigating the vast sea of information related to companies, stocks, and commodities can be challenging. Often, this information is raw and requires thorough analysis using various financial tools to make informed investment decisions. This is where the role of a ‘Research Analyst’ becomes crucial.

In essence, a research analyst is responsible for evaluating securities, such as stocks, mutual funds, or derivatives, and providing recommendations to buy, sell, or hold. Despite their significance, it’s important to note that the perspectives or recommendations of research analysts may not always be impartial, leading to potential conflicts of interest.

To address this concern and ensure the independence of research analysts, the Securities and Exchange Board of India (SEBI) introduced the SEBI (Research Analyst) Regulations in 2014. These regulations aim to oversee individuals or entities engaged in the issuance and publication of research reports or research analysis on securities.

This guide aims to delve into various aspects of the SEBI (Research Analyst) Regulations, 2014, and provide a comprehensive overview of the steps involved in obtaining registration as a Research Analyst.

What is a Research Analyst?

A Research Analyst plays a pivotal role in the financial landscape, primarily tasked with preparing research reports and offering recommendations such as ‘buy/sell/hold’ or providing price targets for securities listed or to be listed on stock exchanges. It’s worth noting that individuals in this role may or may not carry the official designation of ‘research analyst.’

The definition of a Research Analyst extends to include entities like companies or Limited Liability Partnerships (LLPs) that issue research reports or conduct research analyses on listed securities, such as stocks and mutual funds. Additionally, it encompasses anyone reporting directly or indirectly to a research analyst, aiding in the preparation or publication of research reports. For example, individuals assisting a research analyst in gathering information about specific stocks or mutual funds fall under this category.

Furthermore, it’s essential to understand the concept of a proxy adviser:

A Proxy Adviser is an individual who provides advice to institutional investors or shareholders of a company regarding the exercise of their rights within the company. This advice may include recommendations on public offers or voting suggestions on agenda items during meetings.

What is a Research Report?

A Research Report, in the context of a Research Analyst’s responsibilities, refers to any written or electronic communication containing research analysis, research recommendations, or opinions concerning securities or public offers. These reports serve as a basis for making informed investment decisions, covering a spectrum of financial instruments such as stocks, mutual funds, bonds, debentures, derivatives, and other securities.

In summary, a Research Analyst is a professional central to the financial sector, focusing on the preparation of research reports and providing recommendations on various securities, contributing to the informed decision-making process for investors.

Do Research Analyst Regulations Apply to You?

It’s not uncommon for individuals to be uncertain about whether their research activities fall under the purview of SEBI Research Analyst (RA) Regulations. Let’s simplify this for you. Keep reading!

Consider the RA Regulations if:

1. You provide buy/sell/hold recommendations on various securities like stocks, mutual funds, bonds, debentures, derivatives, and government securities.
2. You have the primary responsibility for generating research reports.
3. You are involved in the preparation and publication of the content of research reports.
4. You offer price targets on stocks.
5. You express views on Initial Public Offerings (IPO) or New Fund Offers (NFO).
6. You are a merchant banker, investment banker, or a broker who also issues research reports.
7. You directly or indirectly report to a research analyst or assist in writing research reports or providing price targets.

Exemptions from RA regulations include:

1. Providing buy/sell/hold recommendations on unlisted securities.
2. Being a marketing personnel or a back-office assistant involved in the publication or formatting of research reports.
3. Offering general views on the market, industry, or sector.
4. Presenting statistical summaries of the financial data of a company.
5. Presenting publicly available financial data of a company in an easy-to-understand manner.
6. Providing technical analysis related to demand and supply in a sector or index.
7. Recommending spot commodities.

Additionally, the following activities are not covered under Research Analyst Regulations for companies:

1. Providing periodic reports or other communications prepared by mutual funds, alternative investment funds, portfolio managers, or investment advisers for their clients.
2. Circulating documents like offer documents or prospectuses required by regulations.
3. Sending internal communications to employees or group companies that are not shared with current or prospective clients.

Entities exempted from registration under the Research Analyst Regulations include:

1. Investment Advisers.
2. Credit Rating Agencies.
3. Asset Management Companies or fund managers issuing research reports or circulating/distributing them to the public, or their directors or employees making public appearances.

However, note that these exempt entities still need to comply with Chapter III of the Research Analyst regulations.

What are the Eligibility Criteria for Research Analyst Application?

Once you’ve identified your research activities and decide to register as a Research Analyst, it’s crucial to assess your eligibility for application with SEBI. The main criteria to consider are qualification and certification requirements, as well as capital adequacy requirements.

Qualification and Certification Requirements:

Qualification:

1. Professional Qualification or Post Graduate Degree/Diploma:
– A degree in finance, business management, commerce, economics, capital markets, financial services from a recognized university or institution by the central or state government, or a recognized foreign university, institution, or association.

OR

– A professional qualification or post-graduate degree/diploma accredited by All Indian Council for Technical Education, National Assessment and Accreditation Council, National Board of Accreditation, or any other council/board/body set up under an Act of Parliament in India.

OR

– A graduate in any discipline with a minimum of five years of working experience in activities related to financial products, securities, fund, or asset/portfolio management.

2. Certification:
– Possession of NISM certification for research analysts as specified by the Board or any other certification recognized by the Board.

– Specific certifications include:
– Chartered Accountant (ICAI)
– Company Secretary (ICSI)
– Cost Accountant (ICWA)
– MBA in Finance (from a recognized institute/university/association)
– M.Com
– Chartered Financial Analyst (CFA)
– Masters Degree in Economics
– Post-graduation in Banking and Finance
– Other qualifications like Chartered Market Technician (CMT) or Certified Financial Technician (CFTe) from recognized international bodies.

– Relevant experience may be considered in lieu of specific qualifications.

Additional Notes:

– Engineering degrees without relevant experience do not fulfill qualification requirements.
– Graduates with at least 5 years of relevant experience may meet the qualification criteria.
– Personal investment or family portfolio management does not count as relevant experience.
– SEBI may consider contributions like blogs or articles related to financial product research or personal finance as relevant experience.

Courses:

– If current qualifications do not meet the criteria, individuals can enroll in courses offering postgraduate degrees or diplomas from recognized institutions.

For Non-Individuals:

– In the case of companies or LLPs, research analysts and partners involved in research and analysis must meet the eligibility criteria.

Capital Adequacy Requirement:

Individuals (including proprietorship) and Partnerships:

– Net tangible assets should be not less than INR 1 Lakh.
– “Net tangible assets” include total assets (laptop, house, vehicle, bank balance, FDs, shares, mutual funds, and other investments) minus intangible assets minus liabilities (home loan, car loan, education loan, etc.).

Companies and LLPs:

– Net worth should be not less than INR 25 Lakhs.
– “Net worth” includes the aggregate value of paid-up share capital plus free reserves (excluding reserves created out of revaluation) minus the aggregate value of accumulated losses.

Net Worth Certification:

– A net worth certificate must be provided by a Chartered Accountant, stating their membership number, seal, and signature.

Application:

– Apply for registration as a Research Analyst only after fulfilling the above two criteria.

Before submitting an application to SEBI, ensure that you, your partnership firm, or your company fulfill the qualification and net worth criteria outlined above.

How to Get Registered as a Research Analyst with SEBI?

Research analysts seeking registration with SEBI need to follow a step-by-step process through the SEBI portal for intermediaries. Here is a detailed guide:

Step 1: Make Payment of Application Fee

– Pay the non-refundable application fee through Demand Draft (DD), NEFT, or RTGS. The DD should be in favor of “The Securities and Exchange Board of India” payable at Mumbai.

Step 2: Fill in Applicant Details on the Portal

1. Go to SEBI’s online portal.
2. Click on “Self-Registration” and start filling the application details.
3. Choose “Research Analyst” under “Role required.”
4. For “Applicant Category,” select “Individual Research Firm” for a firm, or “Research Entity” for a company or LLP.
5. Provide accurate contact person details, including a valid email ID and mobile number.
6. Mention the correct designation, either “Director” or “Partner” based on the applicant type.
7. Specify the Registered Office Address for SEBI correspondence.

Step 3: Fill in Payment Details

– Prepare the DD in advance if opting for this payment method.
– Fill in the details of the DD or select NEFT/RTGS and provide the necessary bank account details.
– Click “Submit” after adding all payment details.

Step 4: Receipt of Email from SEBI on Successful Registration

– Receive an email with the subject “User Registration” containing the applicant’s name and Request ID for tracking the application status.

Step 5: Receipt of Email from SEBI for Activation Link and Login ID

– Once SEBI confirms payment, receive an email with an activation link and login ID on the registered email.
– Create a new password within 14 days using the activation link.

Step 6: Fill in Application Details for Registration as Research Analyst

– Gather all required information and documents as specified in Form A of the relevant regulations.
– After completing the application and uploading necessary documents, receive a confirmation email from SEBI.
– Attach the signed Form A (in .pdf format) and send it to SEBI’s head office or regional office.

Step 7: Communication from SEBI

– SEBI will communicate within a month, either requesting additional details or approving the application.

Step 8: Payment of Registration Fees

– Once approved, pay the registration fees online or through a demand draft.

Step 9: Grant of Registration and Receipt of Registration Certificate

– After confirming the fee receipt, SEBI will send the registration certificate to the specified address in the application.
– The entire process typically takes at least two months, depending on SEBI’s response time.

Note: Keep track of your application status using the Request ID provided in SEBI’s communication emails.

5 Reasons Why SEBI Can Put Your Research Analyst Application on Hold:

1. Non-Fulfillment of Education Qualification Requirements:
– SEBI may put your application on hold if it deems that your educational qualifications do not meet the criteria specified in Regulation 7 of the Research Analyst Regulations. Ensure in advance that your qualifications align with the requirements or consider acquiring additional relevant qualifications.

2. Non-Disclosure of Complete Information:
– Full disclosure is crucial when applying to SEBI. Provide comprehensive information about your proposed business, the products/services you intend to offer, and a concise business plan. If you are a director or partner in a firm, make clear disclosures. Incomplete information may lead SEBI to put your application on hold, causing unnecessary delays.

3. Incomplete Set of Documents:
– Submission of various documents, including the past three years’ Income Tax returns and a net-worth certificate, is mandatory. Declarations mentioned in the application form (Form A) should also be included. Failure to submit the complete set of required documents may result in SEBI putting your application on hold, prompting requests for additional documentation or clarifications.

4. Non-Applicability of Regulations:
– Before applying, confirm whether the Research Analyst regulations truly apply to your case. Thoroughly review the definitions and exemptions outlined in the regulations. If it is determined that you are not required to register with SEBI, your application may not be accepted. SEBI might seek more information or clarification in such cases.

5. SEBI’s Discretionary Decision:
– SEBI reserves the right to exercise its discretion in accepting or rejecting applications. Different interpretations of regulations may exist between SEBI’s head office and regional offices, leading to variations in how your application is assessed. Consequently, your application may be put on hold based on SEBI officials’ individual interpretations.

Note: It’s important to be aware of potential pitfalls and uncertainties in the application process. Regularly check for updates and clarifications from SEBI to stay informed about any changes or nuances in the regulatory landscape.

Research Analyst – Feel Real Exam – 7

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NISM Series-XV: Research Analyst Certification

Research Analyst – Feel Real Exam – 7


The number of attempts remaining is 10

1 / 100

1. Which department of the Ministry of Finance is also involved with matters such as financial assistance to states and borrowings by states?





2 / 100

2. As per Boston Consulting Group (BCG) Analysis, _______ can be considered as a successful ‘Question Mark’.





3 / 100

3. M/s. Megasoft Ltd issues 1:1 bonus shares. What happens to the per share data (earning per share, book value per share, market price per share, etc.)?





4 / 100

4. In ________ bias, investors look for evidence of some other investors buying specific securities.





5 / 100

5. A research analyst has prepared a research report on a company listed on the NSE. He too wishes to buy this stock. Can he buy this stock and if Yes, when?





6 / 100

6. A Depository Participant (DP) is an agent of _______.





7 / 100

7. In Structure Conduct Performance (SCP) Analysis, if an analyst is studying whether the business is cyclical in nature or not or how customers choose the products/services etc, then he doing a _______ analysis.





8 / 100

8. Foreign Commercial Paper provide access of Indian securities to unregistered overseas investors thro’ SEBI registered foreign portfolio investors – State True or False ?





9 / 100

9. Nestlé’s Nescafe is an example of pricing power as prices keep going up but volumes don’t fall – State True or False?





10 / 100

10. Indian Depository Receipts are issued in India and are listed on any world Stock Exchange with foreign stocks as underlying shares – State True or False ?





11 / 100

11. Can a company that has defaulted on its payment of interest on the Fixed Deposits it has be eligible for a Share Buyback?





12 / 100

12. The bargaining power of the buyer will be high when ______ .





13 / 100

13. Which of these data is not easily available for research?





14 / 100

14. _______ refers to the possibility that a company will be unable to honor its debt obligations.





15 / 100

15. Which institution has to be approached for a Scheme of Arrangement?





16 / 100

16. The analysis of historical stock prices of a company is called ‘Company Analysis’ – State True or False?





17 / 100

17. ___________ models help governments and central bankers formulate economic policies for achieving long-run economic growth with stability.





18 / 100

18. There could be different modes of servicing customers at different times, but these products/services will never be out of business. Which country has one of the lowest Average Revenue Per Unit (ARPU) in the world?





19 / 100

19. Shareholding pattern and changes therein have to be informed by the companies to exchanges periodically. State whether True or False.





20 / 100

20. Which of these items is included in an Income Statement?





21 / 100

21. Investors can earn both rent on their property and a return on their capital invested – State True or False?





22 / 100

22. Additional surveillance measures are NOT applicable to which of these securities?





23 / 100

23. Identify the factor(s) which contribute to economic recovery from a recession.





24 / 100

24. _________ is a unique parameter for the evaluation of banks.





25 / 100

25. The _________ of an equity share is the discounted value of its future benefits to the investors.





26 / 100

26. Which of these factors will be studied by a fundamental research analyst?





27 / 100

27. Inventory Turn Over Ratio measures the ability of the company to satisfy its short-term obligations – State True or False?





28 / 100

28. Which of these investments most probably has the highest uncertainty in terms of return?





29 / 100

29. The Debt to Equity Ratio of a company is 1.5:1. The total size of its Balance Sheet is Rs 50 Lakhs. Calculate the Equity of the company.





30 / 100

30. Analysis and decision making, the two imperative parameters involved in are affected by which of the following factors?





31 / 100

31. ______ risks are factored in Beta calculations.





32 / 100

32. Behaviourally an investor may have won but financially, it may be a loss. Which is this bias ?





33 / 100

33. Speculation is _____________ calls made with leveraged funds, unlike investing money which is a _________ disciplined activity for creating wealth.





34 / 100

34. When there is lots of licensing required and huge investments in specialized assets are also required, this means _________.





35 / 100

35. Calculate the Enterprise Value based on the given information: Market Capitalisation = 28 lakhs; Total Debt= 7 lakhs; Cash = 6 lakhs.





36 / 100

36. Stock Dividend is the dividend paid to the stockholders of a company – State True or False?





37 / 100

37. SEBI has standardized the symbols used by credit rating agencies, and symbols such as AAA, A1 indicate the ________ degree of creditworthiness.





38 / 100

38. In a particular industry, the four major companies have a total revenue of Rs. 2100 crores and they control 70% of the market. The balance 30% is in the hands of the unorganised sector. With this data, find out the approximate market size of this industry.





39 / 100

39. A high Current Account Deficit (CAD) causes the nation’s currency to weaken relative to other currency – State True or False ?





40 / 100

40. Good knowledge of valuation techniques is sufficient to arrive at a fair valuation on an asset – State True or False?





41 / 100

41. Two major influencers of public policies in an economy are __________ & ____________.





42 / 100

42. Calculate the Market Price of a company’s share from the following data: Total Assets: 50,00,000; Net Income: 4,00,000; Earning Per Share: 0.50; Price to Book Value (P/BV): 6; Return on Equity: 40%





43 / 100

43. The certificate of registration granted to a Research Analyst under regulation 9 is valid for five years. State True or False?





44 / 100

44. In Technical Analysis, a ________ level is a level where the price tends to find some hold as it is going down.





45 / 100

45. In an ___________ the acquiring company acquires all or a substantial portion of the stock of the target company and both entities typically continue to exist after that.





46 / 100

46. Fundamental analysis includes which of the following?





47 / 100

47. A US multinational is planning to set up a manufacturing unit in Asia. Which analysis will it do to finalize a particular country?





48 / 100

48. In Structure Conduct Performance (SCP) Analysis, industry structure refers to ______.





49 / 100

49. The Balance Sheet of a company contains:





50 / 100

50. The credit risk in all exchange-traded markets is taken care of by the Stock Exchange in which the trade has taken place – State True or False ?





51 / 100

51. The sales of M/s. Prima Industries are 200% of EBIT. The Net Profit margin is 30%. Calculate the EBIT % of Net Profit.





52 / 100

52. The telecom industry does not face any threat of substitutes – State True or False ?





53 / 100

53. In a company, if the total liabilities are Rs 8,000, and the total assets are Rs 20,000, calculate the Equity to Asset ratio.





54 / 100

54. Are Puttable bonds a safe for investors in a rising interest rate scenario?





55 / 100

55. Country’s dependence on other countries in terms of important natural resources, monetary policies of the Central Banker, balance of payment positions, and forex reserves, etc. are part of ___________ in PESTLE Analysis.





56 / 100

56. __________ summarizes revenues and costs/expenses over a period of time.





57 / 100

57. Which department of Ministry of Finance administers policies relating to pension reforms, life and general insurance, public sector banks, etc.?





58 / 100

58. When interest rates fall, the prices of old bonds will _______.





59 / 100

59. _________ bonds are a safe for the issuers in a falling interest rate scenario.





60 / 100

60. Business risk is also known as operating risk because this risk is caused by factors that affect the operations of the company. State True or False?





61 / 100

61. An investor bought 500 shares of a company for a total sum of Rs. 10,000. The face value of these shares is Rs 5. Calculate the dividend yield on the value invested in these shares if the company declares 100% dividend.





62 / 100

62. A fund manager SELLS a security to maintain its weight in the portfolio. What does this indicate?





63 / 100

63. A company declares a dividend of 40% on shares of value Rs 5. The dividend payout ratio is 25%. The current market price of this share is Rs 48. Find the P/E ratio and the Earnings Yield.





64 / 100

64. Code of conduct is defined in the Schedule II of Research Analyst Regulations – State True or False?





65 / 100

65. What is the advantage of Merger and Acquisition activity?





66 / 100

66. Focus of microeconomics is on factors that influence aggregate supply and demand in an economy such as unemployment rates, gross domestic product (GDP), overall price levels, inflation, savings rate, investment rate, etc. State whether True or False.





67 / 100

67. The Earnings per Share of a company is Rs 25 and the Book Value per share is Rs 75. The Market Capitalization of this company is Rs. 75,00,000. Calculate the Return on Capital Employed.





68 / 100

68. A Company has a PE ratio of 25. Calculate the PEG ratio if the potential growth rate of the company is 20% for the next few years.





69 / 100

69. As per Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, deemed to be connected person includes ________ .





70 / 100

70. There are two companies with P/E ratios of 40 and 13. But they have different growth potentials of 30% and 8% for the next few years. Which of the companies is cheaper on the basis of the PEG ratio?





71 / 100

71. Which of these qualities are desired in a good research analyst?





72 / 100

72. Changing the structure of share capital of a company by increasing the par value of its shares in a defined ratio and correspondingly reducing the number of shares to maintain the paid up/subscribed capital is known as _________.





73 / 100

73. A good analyst must keep track of disclosures, commitments, and deliveries of an organization periodically to adjudge a company. State whether True or False





74 / 100

74. A share is currently trading at Rs 40.50 with a PE ratio of 13.50. The company has a policy of 70% dividend payout ratio. Calculate the dividend per share.





75 / 100

75. __________ is NOT a component of the Current Account of a country.





76 / 100

76. Which of these is true with respect to Regulation 16 of the Code of Conduct for Research Analysts?





77 / 100

77. PEG Ratio is calculated as: [Current price of stock/ Earnings Per Share] X Growth rate. State True or False ?





78 / 100

78. Which section of the research report is likely to include the analyst’s opinion?





79 / 100

79. Disclosing the allocation of money raised from investors in an IPO/FPO is the job of the Compliance Officer. State True or False?





80 / 100

80. The net profit of a company for the year was Rs 300 crores. It had 4,72,60,223 outstanding equity shares. The current price of the equity share is Rs 718. Find the P/E ratio of the share.





81 / 100

81. The gross sales of a business are Rs 750,000, and the Net Profit margin is at 20%. Calculate the Equity Capital of this business if the Return on Equity is 30%.





82 / 100

82. If the government of a country changes its expansionary fiscal policy to a contractionary fiscal policy, the equity markets are likely to go ______.





83 / 100

83. in case of _______ , both the quantum of cash flows and their timings were known with certainty but in the case of ______ the quantum of cash flows and their timings are unknown and uncertain.





84 / 100

84. Which section in the Cash Flow statement will provide the information about the amount of funds that a company borrowed during the preceding year?





85 / 100

85. The Debt to Equity Ratio of a company is 3:1, and the total size of its Balance Sheet is Rs. 40,00,000. If the return on equity is 27%, calculate the Net Profit of the company.





86 / 100

86. __________ is often used during a merger or acquisition of a company when acquiring company uses its own stock as cash to purchase the business.





87 / 100

87. The Current Ratio of a company is 2 and the Quick Ratio is 1. The total current assets are Rs 80000. Calculate the Inventory of this company?





88 / 100

88. Which of these items is included in an Income Statement?





89 / 100

89. The Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC) are controlled by the ___________, which comes under the Ministry of Finance.





90 / 100

90. During a slowdown in economies, unemployment rate _______.





91 / 100

91. Calculate the Current Assets of a business if the Quick Ratio is 1.4 and the Current Ratio is 2. The Inventory levels are at Rs 3,000.





92 / 100

92. There are many factors to be considered before investing in shares. Which of the below s you should NOT consider?





93 / 100

93. A business has total assets of Rs 50,00,000, and the Earnings Per Share is Rs 0.50. The Net Income is Rs 1,80,000. The Price to Earnings ratio is 18, and the Price to Book Value ratio is 1.25. Calculate the Asset to Equity ratio.





94 / 100

94. Calculate the Capital Employed of a company if the net worth is Rs 7,00,000 and debt in the balance sheet is Rs 4,00,000, and the market capitalization is Rs 25,00,000.





95 / 100

95. ______ has an obligation to buy an asset at a predetermined price.





96 / 100

96. Which of the following is considered as an economic factor in PESTLE analysis?





97 / 100

97. Identify the approach to determine the bonus payable to a research analyst as per regulation 17 of Code of Conduct for research analyst.





98 / 100

98. Is it compulsory for a company listed on stock exchanges to have a Compliance Officer?





99 / 100

99. The price of a stock is Rs 100, and the EPS is Rs 5. Calculate the Earnings yield.





100 / 100

100. Which of these data is not easily available for research?



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Research Analyst – Feel Real Exam – 6

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NISM Series-XV: Research Analyst Certification

Research Analyst – Feel Real Exam – 6

The number of attempts remaining is 10

1 / 100

1. A share is currently trading at Rs 40.50 with a PE ratio of 13.50. The company has a policy of 70% dividend payout ratio. Calculate the dividend per share.

2 / 100

2. Which of these factors will be studied by a fundamental research analyst?

3 / 100

3. Indian Depository Receipts are issued in India and are listed on any world Stock Exchange with foreign stocks as underlying shares – State True or False ?

4 / 100

4. A company has sales of Rs 12400 and from this, they have an operating profit of Rs 2400. If the corporate tax is at 35%, calculate the net profit margin of the company (There is no interest expense)

5 / 100

5. Macroeconomics helps us understand the general state of the economy, including domestic production, domestic consumption, general price levels, growth, and quality of life. State True or False?

6 / 100

6. A warrant is a relatively ___________ to buy ___________ at a specified exercise price over a specified period of time.

7 / 100

7. If imports are more than exports, then the country will have a:

8 / 100

8. Return on Capital Employed can be calculated

9 / 100

9. Which section of the research report is likely to include the analyst’s opinion?

10 / 100

10. In Structure Conduct Performance (SCP) Analysis, industry structure refers to ______.

11 / 100

11. The Total Assets of a company are Rs 124,000, and the Total Liabilities are Rs 79,000. Calculate the Equity to Asset Ratio.

12 / 100

12. A company has 14 million shares, currently trading at Rs 20. The company has assets worth Rs 100 million and liabilities of Rs 30 million. Calculate the Price to Book value ratio.

13 / 100

13. Speculation is _____________ calls made with leveraged funds, unlike investing money which is a _________ disciplined activity for creating wealth.

14 / 100

14. Good knowledge of valuation techniques is sufficient to arrive at a fair valuation on an asset – State True or False?

15 / 100

15. Business Risk k is an Unsystematic Risk – State True or False?

16 / 100

16. As per the SEBI standards of corporate governance, independent directors should constitute at least ____ of the board.

17 / 100

17. There could be different modes of servicing customers at different times, but these products/services will never be out of business. Which country has one of the lowest Average Revenue Per Unit (ARPU) in the world?

18 / 100

18. The Discounted Cash Flow (DCF) model can be used only when three things are known with certainty – Stream of future cash flows, timings of these cash flows, and discount rate – State True or False?

19 / 100

19. A business has total assets of Rs 50,00,000, and the Earnings Per Share is Rs 0.50. The Net Income is Rs 1,80,000. The Price to Earnings ratio is 18, and the Price to Book Value ratio is 1.25. Calculate the Asset to Equity ratio.

20 / 100

20. Fundamental analysis includes which of the following?

21 / 100

21. Inventory Turn Over Ratio measures the ability of the company to satisfy its short-term obligations – State True or False?

22 / 100

22. Which committee is responsible for reviewing the financial statements of the company and for nominating the auditors?

23 / 100

23. Most of the businesses are price takers and not price makers as there is competition in the market. State True or False?

24 / 100

24. Which section in the Cash Flow statement will provide the information about the amount of funds that a company borrowed during the preceding year?

25 / 100

25. A foreign investor has invested in the existing financial instruments of a country. This is known as:

26 / 100

26. Rahul invests Rs. 75000 at the rate of 6% p.a. Calculate the future value of his investments after 10 years.

27 / 100

27. The Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC) are controlled by the ___________, which comes under the Ministry of Finance.

28 / 100

28. The Balance Sheet of a company contains:

29 / 100

29. Which of these data is not easily available for research?

30 / 100

30. SEBI also deals with all matters relating to the promotion and orderly growth of pension markets in India – State True or False?

31 / 100

31. Investors look for businesses with entry barriers.

32 / 100

32. In which analysis, the performance, structure, and conduct of an industry are considered?

33 / 100

33. The work of a research analyst can be hampered by

34 / 100

34. ________ regulates the money market segment of the securities market and is also the manager of the Indian Government’s borrowing program.

35 / 100

35. An investor bought 500 shares of a company for a total sum of Rs. 10,000. The face value of these shares is Rs 5. Calculate the dividend yield on the value invested in these shares if the company declares 100% dividend.

36 / 100

36. Buy-side Analysts work for firms that provide investment banking, broking, advisory services for clients. State True or False?

37 / 100

37. Nestlé’s Nescafe is an example of pricing power as prices keep going up but volumes don’t fall – State True or False?

38 / 100

38. In ________ bias, investors look for evidence of some other investors buying specific securities.

39 / 100

39. A rise in National Income will surely lead to a rise in the standard of living of its citizens.

40 / 100

40. The net profit of a company for the year was Rs 300 crores. It had 4,72,60,223 outstanding equity shares. The current price of the equity share is Rs 718. Find the P/E ratio of the share.

41 / 100

41. Stock Split leads to a decrease in the wealth of shareholders – State True or False?

42 / 100

42. The Net Profit of a company is Rs 12,00,000 and the Market Capitalization is Rs 60,00,000. Calculate the Earnings Yield.

43 / 100

43. FDI leads to job destruction in the economy. State True or False?

44 / 100

44. If the government of a country changes its expansionary fiscal policy to a contractionary fiscal policy, the equity markets are likely to go ______.

45 / 100

45. The credit risk in all exchange-traded markets is taken care of by the Stock Exchange in which the trade has taken place – State True or False ?

46 / 100

46. A Rights Issue is open for subscription for a minimum period of

47 / 100

47. The Debt to Equity Ratio of a company is 1.5:1. The total size of its Balance Sheet is Rs 50 Lakhs. Calculate the Equity of the company.

48 / 100

48. The certificate of registration granted to a Research Analyst under regulation 9 is valid for five years. State True or False?

49 / 100

49. Sometimes, Bottom-up analysts focus purely on the dynamics of business and industry with little or no attention to economic factors. State True or False?

50 / 100

50. The current stock price of ABC Software Ltd is Rs 1200. Its Profit After Tax (PAT) is Rs 68,00,000. The number of outstanding shares are 100000. Calculate the P/E Ratio

51 / 100

51. Handles the matters relating to all the Direct and Indirect Taxes through two statutory Boards, namely, the Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC).

52 / 100

52. In a particular industry, the four major companies have a total revenue of Rs. 2100 crores and they control 70% of the market. The balance 30% is in the hands of the unorganised sector. With this data, find out the approximate market size of this industry.

53 / 100

53. Corporate actions like Bonus Issue, Stock Split, and Share Consolidation will lead to changes in per share data.

54 / 100

54. __________ is often used during a merger or acquisition of a company when acquiring company uses its own stock as cash to purchase the business.

55 / 100

55. The views mentioned in a research report should be consistent with the views of:

56 / 100

56. In the case of Stock Consolidation, per share data witnesses immediate improvement.

57 / 100

57. If an investor is not able to sell their investment when desired, or it has to be sold below its intrinsic value, or there are high costs to carrying out transactions, then this risk is called

58 / 100

58. Calculate the Market Price of a company’s share from the following data: Total Assets: 50,00,000; Net Income: 4,00,000; Earning Per Share: 0.50; Price to Book Value (P/BV): 6; Return on Equity: 40%

59 / 100

59. Focus of microeconomics is on factors that influence aggregate supply and demand in an economy such as unemployment rates, gross domestic product (GDP), overall price levels, inflation, savings rate, investment rate, etc. State whether True or False.

60 / 100

60. The Debt to Equity Ratio of a company is 2:1. The total size of its Balance Sheet is Rs 2,700,000. Calculate the Debt of the company.

61 / 100

61. SEBI has been appointed under the Companies Act to register companies in India and to ensure that they comply with the provisions of the law – State True or False?

62 / 100

62. In a company, if the total liabilities are Rs 8,000, and the total assets are Rs 20,000, calculate the Equity to Asset ratio.

63 / 100

63. __________ summarizes revenues and costs/expenses over a period of time.

64 / 100

64. The EBIT of a company is Rs 400,000, and the EBIT % is 40% of the business. What is the Net Profit of the company if the Net Profit margin is 10%?

65 / 100

65. Dividend Payout Ratio is calculated by dividing the company’s dividend per share by earnings per share.

66 / 100

66. Which of these data is not easily available for research?

67 / 100

67. Which of these can be considered as a ‘Threat’ in SWOT analysis of a company?

68 / 100

68. A research analyst has prepared a research report on a company listed on the NSE. He too wishes to buy this stock. Can he buy this stock and if Yes, when?

69 / 100

69. Which of the following is considered as an economic factor in PESTLE analysis?

70 / 100

70. The telecom industry does not face any threat of substitutes – State True or False ?

71 / 100

71. Weighted Average Cost of Capital (WACC) formula is stated as True or False?

72 / 100

72. Can a company that has defaulted on its payment of interest on the Fixed Deposits it has be eligible for a Share Buyback?

73 / 100

73. Identify the factor(s) which contribute to economic recovery from a recession.

74 / 100

74. Country’s dependence on other countries in terms of important natural resources, monetary policies of the Central Banker, balance of payment positions, and forex reserves, etc. are part of ___________ in PESTLE Analysis.

75 / 100

75. The sales of Jupiter Trading Co Ltd. were Rs 750,000 and the cost of goods sold were 25% of sales. Operating Expenses and Depreciation were Rs 233,000. The Interest expenses were Rs 140,000. Calculate the Net Income if the company pays 25% of its pretax income as tax.

76 / 100

76. RBI announces a hike in interest rates. In reaction, the Bond prices will generally

77 / 100

77. Mark to Market (MTM) margin is the notional ___________ which an outstanding trade has during a specified period on account of price movements.

78 / 100

78. Mr. Singh purchases MF units at NAV Rs 11. After 400 days, he redeems it at NAV Rs 12.50. What is his compounded annual rate of return?

79 / 100

79. Disclosing the allocation of money raised from investors in an IPO/FPO is the job of the Compliance Officer. State True or False?

80 / 100

80. Business risk is also known as operating risk because this risk is caused by factors that affect the operations of the company. State True or False?

81 / 100

81. The objective(s) of all the regulators in a financial market is/are:

82 / 100

82. Which of these financial instruments do not have a default risk?

83 / 100

83. Covers Banks, Insurance, Financial Services provided by various government agencies and private corporations.

84 / 100

84. Which of the following statements about the limitation of the quantitative approach to fundamental analysis is correct?

85 / 100

85. A Depository Participant (DP) is an agent of _______.

86 / 100

86. Analysis and decision making, the two imperative parameters involved in are affected by which of the following factors?

87 / 100

87. Investors can earn both rent on their property and a return on their capital invested – State True or False?

88 / 100

88. A company has 200,000 shares. The Price to Book Value ratio of this company is 7, and the Book Value is 5. Calculate the Net Worth of the company.

89 / 100

89. A Company has a PE ratio of 25. Calculate the PEG ratio if the potential growth rate of the company is 20% for the next few years.

90 / 100

90. Identify the approach to determine the bonus payable to a research analyst as per regulation 17 of Code of Conduct for research analyst.

91 / 100

91. In an ___________ the acquiring company acquires all or a substantial portion of the stock of the target company and both entities typically continue to exist after that.

92 / 100

92. Editing a research report includes the following EXCEPT

93 / 100

93. The Current Ratio of a company is 2 and the Quick Ratio is 1. The total current assets are Rs 80000. Calculate the Inventory of this company?

94 / 100

94. Calculate the Capital Employed of a company if the net worth is Rs 7,00,000 and debt in the balance sheet is Rs 4,00,000, and the market capitalization is Rs 25,00,000.

95 / 100

95. In the process of valuation of a business, the growth rate is calculated by adding the retention rate and the return on equity – State True or False?

96 / 100

96. The sales of M/s. Prima Industries are 200% of EBIT. The Net Profit margin is 30%. Calculate the EBIT % of Net Profit.

97 / 100

97. What is the advantage of Merger and Acquisition activity?

98 / 100

98. Calculate the Enterprise Value based on the given information: Market Capitalisation = 28 lakhs; Total Debt= 7 lakhs; Cash = 6 lakhs.

99 / 100

99. In the Pioneering Stage of a business life cycle,

100 / 100

100. During a slowdown in economies, unemployment rate _______.

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Research Analyst – Feel Real Exam – 5

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NISM Series-XV: Research Analyst Certification

Research Analyst – Feel Real Exam – 5

The number of attempts remaining is 10

1 / 100

1. The P/E ratio of a company is 3 and the price of its stock is Rs 15 per share. The company has declared a dividend of Rs 3. Calculate the EPS of this company.

2 / 100

2. Regulates the money market segment of the securities market and is also the manager of the Indian Government’s borrowing program.

3 / 100

3. The competing technology for digital cameras is

4 / 100

4. When RBI announces a hike in interest rates, bond prices will generally:

5 / 100

5. If the price of an equity share is more than the fair value, then the share is considered as

6 / 100

6. Which of these will be considered as an Entry Barrier in an industry?

7 / 100

7. The main role of FMC is to deal with all matters relating to the promotion and orderly growth of pension markets in India – State True or False?

8 / 100

8. Sometimes, bottom-up analysts focus purely on the dynamics of business and industry with little or no attention to Economic factors. State True or False?

9 / 100

9. The Debt to Equity ratio of an organization is 2:1. The debt on the balance sheet is Rs 8,00,000, and the Return on Equity is 25%. Calculate the Net Profit of the company.

10 / 100

10. In a company, if the total liabilities are Rs 8,000 and the total assets are Rs 20,000, calculate the Equity to Asset ratio.

11 / 100

11. Buy-side Analysts work for firms that provide investment banking, broking, advisory services for clients – State True or False?

12 / 100

12. A warrant is a relative to buy at a specified exercise price over a specified period of time.

13 / 100

13. A rise in National Income will surely lead to a rise in the standard of living of its citizens.

14 / 100

14. A company has declared a 20% dividend. The face value of the share is Rs 5, and the dividend payout ratio is 50%. The current market price of the share is Rs. 100. Calculate the Earning Yield.

15 / 100

15. The work of a research analyst can be hampered by:

16 / 100

16. The job of a Research Analyst is to collect and analyze data and give recommendations.