NISM 15 Research Analyst Mock Test 1: 600 MCQ Series (2026 Updated)
NISM Series XV: Mock Test 1 (Set 1 of 24)
Dhaval’s Personal Advice for Aspirants:
Practice and understand these 25 questions. If you can't understand the theory or the logic, just mug it up (memorize it) because these are very important and sure-shot questions that will appear in the exam!
Q 1. As per the SEBI (Research analyst) Regulations, who is qualified to be registered as a research analyst?
Options:
A. Only Graduates
B. Only Post-Graduates
C. Only Chartered Accountants
D. All of the above are qualified
View Correct Answer & Detailed Explanation
Explanation: As per the SEBI (Research Analysts) Regulations, 2014, amended up to 2024, all of the above are eligible to be registered as a research analyst. Prior to the amendment in 2024, graduates were not eligible for this.
Q 2. Efficient Market Hypothesis proclaims that ________.
Options:
A. Share prices incorporate and reflect all relevant information
B. Share prices follow trends and patterns
C. An smart and efficient investor will always get an opportunity to exploit discrepancy in the price of shares
D. Future prices of shares can be determined by past past trends in market prices
View Correct Answer & Detailed Explanation
Explanation: The Efficient market hypothesis (EMH) states that share prices reflect all information. The EMH hypothesizes that stocks always trade at their fair market value on exchanges. Opponents of EMH believe that it is possible to beat the market and that stocks can deviate from their fair market values.
Q 3. Identify which statement(s) is/are true about CAGR.
Options:
A. CAGR represents the average annual growth rate over a period of time
B. CAGR does not take into account the timings of cash flows into account
C. CAGR means Compounded Annual Growth Rate
D. All the above are true
View Correct Answer & Detailed Explanation
Explanation: CAGR means Compounded Annual Growth Rate. CAGR only reflects the average rate of return over a period of time and does not consider the exact timings or amounts of cash flows. The CAGR method simply uses the beginning and ending value over a holding period.
Q 4. M/s. Microstrong has borrowed huge sums and has a debt of Rs. 500 crores. The interest payable on this is at 9% p.a. Calculate the Interest Coverage Ratio if the expected EBIT is Rs. 65 crores.
Options:
A. 2.19x | B. 1.44x | C. 2.84x | D. 1.02x
View Correct Answer & Detailed Explanation
Explanation: Interest Coverage Ratio = EBIT / Interest Expense. Intrerest expenses are 9% of 500 cr = 45 cr. Interest Coverage Ratio = 65 cr / 45 cr = 1.44
Q 5. ________ is an objective of SEBI regulations.
Options:
A. Prevention of volatility in markets | B. Protecting interest of investors | C. Securing steady returns for the investors | D. All of the above
View Correct Answer & Detailed Explanation
Explanation: The Preamble of the SEBI Act describes the basic functions of SEBI : “......to protect the interests of investors in securities and to promote the development of, and to regulate the securities market and for matters connected therewith or incidental thereto”. Thus, SEBI's primary role is to protect the interest of the investors in securities and to promote the development of and to regulate the securities market.
Q 6. What is the cause of high inflation?
Options:
A. Increase in foreign exchange reserves | B. Higher interest rates | C. Strengthening of local currency | D. None of the above
View Correct Answer & Detailed Explanation
Explanation: None of the options listed directly cause high inflation. Let's break down each option: 1. Increase in foreign exchange reserves: A rise in foreign exchange reserves generally strengthens a country's currency and might indicate a stable economic environment, which typically doesn't cause high inflation directly. 2. Higher interest rates: Higher interest rates are usually used to control inflation, not cause it. 3. Strengthening of local currency: A stronger currency typically helps lower inflation because it makes imports cheaper.
Q 7. For plain vanilla fixed rate bonds, ________ are certain and known to the bond investors. A. The Capital Appreciation B. The amount of cash flows C. The timing of cash flows
Options:
A. Only A and B | B. Only A | C. Only B and C | D. All A, B and C
View Correct Answer & Detailed Explanation
Explanation: For plain vanilla fixed-rate bonds, both the amount and timing of cash flows are certain and known to the bond investors. These bonds pay a fixed amount of interest (coupon payments) at regular intervals and return the face value (principal) at maturity. However, capital appreciation is not guaranteed and depends on market interest rates.
Q 8. As per Section 230 of Companies Act, which of the following is TRUE about 'Scheme of Arrangement'?
Options:
A. Scheme of Arrangement is a court monitored settlement process between the company and its creditors
B. Scheme of Arrangement is the settlement of legal succession within the promoter family after the demise of the promoter
C. Scheme of Arrangement is the process of merging the subsidiaries with the holding company
D. Scheme of Arrangement is basically a agreement of co-operation by all the companies in an industry
View Correct Answer & Detailed Explanation
Explanation: Under section 230 of Companies Act 2013, Scheme of arrangement can be sought by the company or its creditors / members. The person claiming the scheme of arrangement shall approach the National Company Law Tribunal (NCLT). The tribunal then orders the meeting between the company, its creditors and/or members to arrive a compromise or arrangement.
Q 9. ________ can be considered as a matured industry in India.
Options:
A. Oil and Gas industry | B. E-Commerce industry | C. Bio-tech industry | D. Fintech industry
View Correct Answer & Detailed Explanation
Explanation: Every industry typically goes through the following phases - Pioneering stage, Growth stage, Matured stage, Declining stage and Reinvention and revival. Matured stage: The industry has existed for long and most customers who can use the product are already using it. From the above four options, Oil and Gas industry is a matured industry as it has existed for very long.
Q 10. The Net Profit of a company was Rs 20 crores. The company's equity capital stood at Rs 3,44,81,540. The company has not issued any preference shares. The face value of its shares is Rs 10. Calculate the Earning Per Share (EPS) of the company.
Options:
A. Rs. 63.74 | B. Rs. 58 | C. Rs. 47.22 | D. Rs. 79.51
View Correct Answer & Detailed Explanation
Explanation: EPS = Net Profit / No. of Shares. First let's calculate the number of shares. Number of Shares = Equity Capital / Face Value = 3,44,81,540 / 10 = 34,48,154. EPS = Net Profit / No. of Shares = 20,00,00,000 / 34,48,154 = 58.00
Q 11. Which factors usually have the most influence in the movement of commodity prices in the near term?
Options:
A. Secular trends | B. Inventory Cycle | C. Economic Cycle | D. Monetary Policy
View Correct Answer & Detailed Explanation
Explanation: Inventory cycles are short term cycles that occur within a commodity cycle. These occur on account of inventory adjustments by producers and customers. Customers who may have huge inventory may temporarily reduce procurement. This would result in high inventory pile up at the suppliers' end resulting in fall in prices.
Q 12. The Return on Capital Employed (ROCE) of company M/s. Hightech Industries Ltd. is 8% and the cost of debt is 10%. What will be the most likely Return on Equity (ROE)?
Options:
A. ROE is likely to be below 8% | B. ROE is likely to be above 10% | C. ROE will be 2% | D. ROE will be between 8 to 10%
View Correct Answer & Detailed Explanation
Explanation: ROCE is 8% but the cost of debt is 10%. Since the company earns less on its capital than it pays on borrowings, debt reduces overall returns. This drags down shareholder returns, so the ROE will end up below 8%.
Q 13. Which of these can lead to failure of a research report?
Options:
A. Complicated language | B. Inconsistent views | C. Unnecessary details | D. All of the above
View Correct Answer & Detailed Explanation
Explanation: A few reasons for failure of a research report are : - Unnecessary details - Long sentences - No proper structure - Inconsistent views - Complex language
Q 14. The tyre industry in a country comprised of three organised players and several unorganised players. A sample survey revealed that around 20% of total sales came from unorganised sector. The three major companies (organised players) reported revenue of Rs 6,000 crore, Rs 8,000 crore and Rs 10,000 crore. Which of the following is closest to the fair estimate of overall size of tyre market in that country?
Options:
A. Rs 30,000 crore | B. Rs 48,000 crore | C. Rs 36,000 crore | D. Rs 24,000 crore
View Correct Answer & Detailed Explanation
Explanation: If the unorganised sector market share is 20%, the balance 80% is of the organised sector. The sale of the organised sector is Rs 6000 cr + Rs 8000 cr + Rs 10000 cr = Rs 24000 cr. Rs 24000 cr sale is 80% sale of the tyre industry. So 100% will be ? 24000 cr x 100 / 80 = Rs 30,000 cr. So the overall tyre market is of Rs 30,000 cr.
Q 15. As per the rules of SEBI, the chairman of the Remuneration Committee should be ________.
Options:
A. An Independent director | B. An Executive director | C. The Chairman of the Board | D. A Non Executive director
View Correct Answer & Detailed Explanation
Explanation: The remuneration committee decides the remuneration of directors and senior management. Ideally, the committee should comprise entirely of independent directors. SEBI regulation currently stipulates that all members should be non-executive directors and the chairman of the committee should be independent director.
Q 16. Find out the Cost of Equity if the risk free rate is 7%, the market risk premium is 9% and the Beta is 0.60.
Options:
A. 8.1% | B. 13.8% | C. 10.5% | D. 12.4%
View Correct Answer & Detailed Explanation
Explanation: To find the Cost of Equity, we use the Capital Asset Pricing Model (CAPM) formula: Cost of Equity = Rf + β × (Rm–Rf). Rf = 7%, Rm – Rf = 9%, β = 0.60. Substituting the value : Cost of Equity = 7% + ( 0.60 × 9% ) = 7% + 5.4% = 12.4%
Q 17. ________ may generate both capital appreciation and also recurring income.
Options:
A. Bonds | B. Gold | C. Equities | D. Both Bonds and Equities
View Correct Answer & Detailed Explanation
Explanation: Equities (Stocks) can provide capital appreciation (if the stock price goes up) and recurring income in the form of dividends. Bonds provide recurring income through interest payments, and in some cases, capital appreciation if bond prices rise due to falling interest rates.
Q 18. Which of these is true with respect to Regulation 16 of the Code of Conduct for Research Analysts?
Options:
A. Research analyst shall not deal or trade in securities that they recommends within thirty days before the publication of a research report
B. Research analyst shall not deal or trade in securities that they recommends within sixty days before the publication of a research report
C. Research analyst shall not deal or trade in securities that they recommends within seven days before the publication of a research report
D. Research analyst shall not deal or trade in securities that they recommends within fortyfive days before the publication of a research report
View Correct Answer & Detailed Explanation
Explanation: As per Regulation 16 of the Code of Conduct for Research Analysts : 'Independent research analysts, individuals employed as research analyst by research entity or their associates shall not deal or trade in securities that the research analyst recommends or follows within thirty days before and five days after the publication of a research report'.
Q 19. Identify which condition is most likely to aid the central bank to follow expansionary monetary policy?
Options:
A. High inflation | B. Low inflation | C. High fiscal deficit | D. High digitalisation
View Correct Answer & Detailed Explanation
Explanation: Low inflation rate enables central banks to loosen their monetary policy and extend liquidity in the market. With relative easy availability of money and decrease in prices, consumers start buying goods and services. This results in economic activity picking up and eventually results in return of expansionary phase.
Q 20. ________ regulates the money market segment of securities market and is also the manager of Indian Government's borrowing program.
Options:
A. Ministry of Finance | B. RBI | C. SEBI | D. Commerce Ministry
View Correct Answer & Detailed Explanation
Explanation: Reserve Bank of India (RBI) is the central bank of the country which has the responsibility of administering the monetary policy. It regulates the money markets and is the manager of Government's borrowing programs.
Q 21. Which concern provides for maintenance of ownership records in a book entry form?
Options:
A. Depository | B. Stock Exchange | C. Bank | D. Clearing Corporation
View Correct Answer & Detailed Explanation
Explanation: Depositories hold securities of investors in electronic form and maintains the ownership records.
Q 22. Beta of a stock which is more volatile than market is likely to be ________.
Options:
A. Below zero | B. Between zero and one | C. Exactly zero | D. Greater than one
View Correct Answer & Detailed Explanation
Explanation: Beta of 1 indicates that the security’s price will move with the market. Beta of less than 1 means that the security will be less volatile than the market. And, beta of greater than 1 indicates that the security’s price will be more volatile than the market.
Q 23. As per the Boston Consulting Group (BCG) Analysis, the business segment which is fast growing but has a low market share are known as ________.
Options:
A. Question Marks | B. Stars | C. Cash Cows | D. Dogs
View Correct Answer & Detailed Explanation
Explanation: As per the BCG matrix, business segments can be classified as: Stars (High growth, high share), Cash Cows (Low growth, high share), Question Marks (Fast growth, low share), Dogs (Slow growth, low share).
Q 24. The Paid up capital of a company is Rs 5,00,000 with face value of Rs 10 per shares. The book value per share is Rs. 20 and the Dividend per share of the business is Rs 5. What is the Return on Capital Employed in the business?
Options:
A. 25% | B. 20% | C. 50% | D. 33.33%
View Correct Answer & Detailed Explanation
Explanation: Return on Capital Employed is similar to Return on Equity. Return on Equity = (Return Per Share / Book Value) x 100 = 5 / 20 x 100 = 25%. Detailed steps: 1. Shares = 5,00,000 / 10 = 50,000. 2. Dividend = 50,000 * 5 = 2,50,000. 3. Total Book Value = 50,000 * 20 = 10,00,000. 4. ROCE = (2,50,000 / 10,00,000) * 100 = 25%.
Q 25. The Price to earnings ratio of a company is 7. The EPS is Rs. 5 and the market capitalisation is Rs 7,00,000. The book value per share is Rs 24. What is the networth of the company?
Options:
A. Rs. 4,80,000 | B. Rs. 5,25,000 | C. Rs. 7,85,600 | D. Rs. 6,15,000
View Correct Answer & Detailed Explanation
Explanation: Price to Earnings Ratio = Market Price of the share / EPS. 7 = MP / 5. MP = 35. Number of shares = Market Cap / MP = 700000 / 35 = 20,000. Networth = Book Value x Number of shares = 24 x 20,000 = Rs. 4,80,000.
Mock Test 1 of 24 Complete. Stay tuned for the next set!
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