NISM 15 Research Analyst Mock Test 14: 600 MCQ Series (Full Detailed Version)
NISM Series XV: Mock Test 14 (Set 14 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 76. Identify the correct statement with respect to GST collected by a vendor.
Options:
A. GST vendors can claim credit of GST paid on their input goods and then will have to remit the balance to the account of the Government
B. GST vendors will have to deposit the entire GST collected with the Government
C. GST vendors can keep the GST collected with themselves as its a part of their income
D. None of the above
View Correct Answer & Detailed Explanation
Explanation: Goods and Service Tax (GST) is a tax that is charged at the time of sale of goods or services. In order to avoid double taxation, sellers are allowed tax credit (i.e. deduct) the GST they paid to their suppliers and they only have to remit the balance to the government.
Q 77. Which trends are often driven by disruptions caused by change in technology, culture, demography etc.?
Options:
A. Seasonal Trends | B. Cyclical Trends | C. Secular Trends | D. All of the above
View Correct Answer & Detailed Explanation
Explanation: Secular trends refer to long term change that is occurring in the economy or industry. Secular trends are often driven by disruptions caused by change in technology, culture, demography, and consumer preferences among other factors. They are often long term in nature and often cause an inflection in the business lifecycle of an industry.
Q 78. Cost of equity is 13% and the cost of debt is 10%. The weight of debt is 60%. Calculate the weighted average cost of capital using this data.
Options:
A. 12.30% | B. 11.20% | C. 10.90% | D. 9.70%
View Correct Answer & Detailed Explanation
Explanation: WACC = [Ke * We] + [Kd * (1-Tax) * Wd]. (As Tax is not mentioned, we ignore (1-Tax)).
Weight of debt is 60%, the weight of equity will be 100 - 60 = 40%.
WACC = [0.13 * 40] + [0.10 * 60] = 5.2 + 6 = 11.2%.
Q 79. Which cycle should a research analyst study to forecast the near term demand and prices for the input - output of a business?
Options:
A. Commodity Cycle | B. Inventory Cycle | C. Economic Cycle | D. None of the above
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. Understanding the inventory cycle helps an analyst forecast near term demand and prices for the input and/or output of a business.
Q 80. Identify the correct statement with respect to High Industry Rivalry. A. Similar products being offered with little differentiation B. Switching cost is very high C. Many companies exist in the segment
Options:
A. A and B only | B. B and C only | C. A and C only | D. A, B and C
View Correct Answer & Detailed Explanation
Explanation: Industry rivalry would be high if: 1. Many companies exist in the business segment. 2. Similar products/services being offered by participants with little or no differentiation. 3. Every industry participant tries to attract customers with similar strategies. 4. Switching cost for customers from one product/service to another is low or nil. (Note: High switching cost REDUCES rivalry, not increases it.)
Q 81. Who is potentially obligated to sell an asset at a predetermined price?
Options:
A. Call Buyer | B. Call Writer | C. Put Buyer | D. Put Writer
View Correct Answer & Detailed Explanation
Explanation: A call option gives the buyer the right to buy an asset at a fixed price. The person who sold the call (call writer) must sell the asset if the buyer decides to exercise this right. So, the call writer carries the obligation to deliver the asset at the strike price.
Q 82. An investor owns 2,000 shares (Face Value Rs. 2). Following a stock consolidation in the ratio of 10:1, what is the new count and face value?
Options:
A. 500 , 20 | B. 600 , 50 | C. 200 , 20 | D. 100 , 10
View Correct Answer & Detailed Explanation
Explanation: A stock consolidation in the ratio of 10:1 means that for every 10 old shares, the investor will now have 1 new share.
New Number of Shares: 2000/10 = 200 shares.
New Face Value: Original total face value was Rs 4000. Distributed among 200 shares, new face value = Rs 20/share.
Q 83. Which of the following arrangements is generally considered most desirable regarding the roles of CEO and Chairman?
Options:
A. Combined in a single person
B. Chairman should report to CEO
C. Chairman from promoter group, CEO independent
D. Chairman and CEO roles should be held by different individuals
View Correct Answer & Detailed Explanation
Explanation: Good corporate governance recommends separating the roles of chairman and CEO. This ensures checks and balances, prevents concentration of power, and allows the board independently oversee the management team.
Q 84. Given that a share is currently priced at Rs. 500 and the latest EPS stands at Rs. 15, which represents the earnings yield?
Options:
A. 33.33% | B. 7.5% | C. 5% | D. 3%
View Correct Answer & Detailed Explanation
Explanation: Earning yield = (EPS / Price) x 100.
Calculation: (15 / 500) x 100 = 3%.
Q 85. Fiscal policy is administered by which of the following authorities?
Options:
A. Ministry of Foreign Affairs | B. SEBI | C. Central Government | D. Central bank (RBI)
View Correct Answer & Detailed Explanation
Explanation: Fiscal policy deals with government spending, taxation, and borrowing decisions. These are managed by the Central government through its budgetary process. The central bank (RBI) manages monetary policy.
Q 86. Which combination of charting tools provides complete information about key price movements within a trading day?
Options:
A. Candlestick charts and bar charts
B. Renko charts and candlestick charts
C. Bar charts and line charts
D. Renko charts and bar charts
View Correct Answer & Detailed Explanation
Explanation: Candlestick charts and bar charts both show open, high, low and close prices (OHLC) for the day. This gives complete information about intraday price movement and volatility.
Q 87. Which of the following types of shares are allotted to existing shareholders without any monetary consideration?
Options:
A. Bonus Issue | B. Rights Issue | C. FPO | D. OFS
View Correct Answer & Detailed Explanation
Explanation: Bonus shares are issued free of cost to existing shareholders in proportion to their current holdings. No payment is required, unlike rights issues. It is done by capitalizing the company's reserves.
Q 88. Which of the following statements correctly explains the objective of an indexing investment strategy?
Options:
A. Replicate the returns of a market index
B. Outperform the benchmark index
C. Improve the portfolio's Sharpe ratio
D. Generate returns above risk-free rate
View Correct Answer & Detailed Explanation
Explanation: An indexing strategy means building a portfolio that mirrors a market index. The goal is not to beat the market, but simply to match the performance of the chosen index.
Q 89. From a technical analysis perspective, how is a stock price expected to behave after crossing its resistance level?
Options:
A. Remain range-bound | B. Continue rising until next resistance | C. Weaken gradually | D. Reverse and fall quickly
View Correct Answer & Detailed Explanation
Explanation: A resistance level acts as a ceiling. When the price breaks above it, it indicates strong buying interest and bullish momentum. After such a breakout, prices generally move upward until the next level.
Q 90. The strength of a trend in technical analysis is best indicated using which of the following?
Options:
A. Historical price series | B. The Volume of trading | C. Market capitalization | D. Enterprise value
View Correct Answer & Detailed Explanation
Explanation: Trading Volume is a key indicator of the strength behind a price trend. A rising price with high volume suggests strong conviction and sustainability.
Q 91. The candlestick pattern in a Hanging Man is UNLIKELY to have which of the following features?
Options:
A. It is a bullish reversal after a down move
B. Long lower shadow indicates sellers were in control
C. It is a bearish reversal after an up move
D. Small real body, long lower shadow
View Correct Answer & Detailed Explanation
Explanation: The Hanging Man is a bearish reversal pattern that appears after an uptrend (up move). Describing it as a bullish reversal after a down move is incorrect; that would be a Hammer.
Q 92. The ________ refers to the difference between value and prices, when securities are bought at a price significantly below their intrinsic value.
Options:
A. Intrinsic value | B. Sensitivity Analysis | C. Holding period return | D. Margin of safety
View Correct Answer & Detailed Explanation
Explanation: Margin of safety refers to the cushion between the intrinsic value of a security and its market price. It reduces investment risk and provides protection against errors in valuation.
Q 93. 'The bye-laws of the stock exchanges are same across exchanges and need to be approved by SEBI'. State whether True or False.
Options:
A. True | B. False
View Correct Answer & Detailed Explanation
Explanation: A Stock Exchange can have its own / different bye laws, but those specific laws must be approved by SEBI.
Q 94. Corporate Governance considers which aspect of the Management?
Options:
A. Efficiency | B. Profitability | C. Integrity | D. All of the above
View Correct Answer & Detailed Explanation
Explanation: Corporate governance primarily deals with the integrity, ethics, transparency, and accountability of the management in running the company.
Q 95. For doing the SWOT analysis of a company, which of the following could be the first approach?
Options:
A. Identifying opportunities and weakness
B. Identifying strengths and weakness
C. Identifying strengths and opportunities
D. Identifying weakness and threat
View Correct Answer & Detailed Explanation
Explanation: SWOT analysis typically begins with assessing internal factors (Strengths and Weaknesses) before moving to external factors (Opportunities and Threats).
Q 96. Calculate the Enterprise Value: Market Cap = 10 lakhs; Total Debt = 3 lakhs; Cash = 4 lakhs.
Options:
A. 13 lakhs | B. 11 lakhs | C. 6 lakhs | D. 9 lakhs
View Correct Answer & Detailed Explanation
Explanation: Enterprise Value = Market Cap + Total Debt - Cash.
Calculation: 10 + 3 - 4 = 9 lakhs.
Q 97. Which section in the Cash Flow statement provides information about borrowed funds during the preceding year?
Options:
A. Financing Activities | B. Operating Activities | C. Investing Activities | D. Net Operations
View Correct Answer & Detailed Explanation
Explanation: Cash flows from financing activities show changes in capital structure, including funds raised through borrowings and repayment of loans.
Q 98. Which of the following aspects related to Industry structure in Structure Conduct Performance (SCP) analysis?
Options:
A. Market size | B. Relationships among players | C. Industry Growth rate | D. All of the given options
View Correct Answer & Detailed Explanation
Explanation: In SCP analysis, industry structure is assessed by factors such as industry growth rate, competition among players, and market size.
Q 99. The fiscal deficit is bridged by the government through market borrowings, both short-term and long term. State True or False.
Options:
A. True | B. False
View Correct Answer & Detailed Explanation
Explanation: To bridge the fiscal deficit, the government raises funds through market borrowings, which include treasury bills (short-term) and government bonds (long-term).
Q 100. Which of the following is NOT a valuation metric for business analysis?
Options:
A. Demand & Supply of Securities | B. P/E Ratio | C. P/BV Ratio | D. Intrinsic Value
View Correct Answer & Detailed Explanation
Explanation: Valuation metrics like intrinsic value and P/E ratio assess a company's worth based on financials. Demand and supply reflect market behavior and liquidity, not fundamental business value.
Mock Test 14 of 24 Complete. 350 questions down! You're in the home stretch.
Dhaval Visariya
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