NISM XV Exam Questions and Answers

NISM XV Exam Questions and Answers Different types of Analysts - Correct Answers ✅(i)Sell-side Analysts, (ii)Buy-Side Analysts (iii)Independent Analysts Sell Side Analysts - Correct Answers ✅They typically publish research reports on the securities of companies or industries with specific recommendations to buy, hold, or sell the subject security. These recommendations include the analyst's expectations of the earnings of the company and future price performance of the security ("price target").These analysts work for firms that provide investment banking, broking, advisory services for clients.Buy-side Analysts - Correct Answers ✅These analysts generate investment recommendations for their internal consumption viz. use by the fund managers within the organization. Research reports of these analysts are generally circulated among top management/investment managers of the employer firms as they contain information about which stocks to buy, hold or sell. These analysts work for money managers like mutual funds, hedge funds, pension funds or portfolio managers.Independent Analysts - Correct Answers ✅They work for research originators or boutique firms separate from full- service investment firms and sell their research to others on a subscription basis. Their clients could be investors, 1 / 4

NISM XV Exam Questions and Answers institutions, investment bankers, regulators, stock exchanges, fund managers, etc. They also provide customized research reports on the businesses on specific requests. The purpose of these reports could vary from investment activity to understanding competition to mergers and acquisitions etc.Others - Correct Answers ✅Apart from these three main categories, entities such as newspapers, media and consolidators of information also provide research reports.What do Research Analysts (RA) do? - Correct Answers ✅They to do a comprehensive study of companies, evaluate their past performance, analyse how a company is expected to perform in the future and make recommendations based on this analysis.Responsibilities of Research Analysts - Correct Answers ✅(i) Understanding Economy (ii) Understanding Industry (iii) Understanding Companies Understanding Economy - Correct Answers ✅Growth depends, to a great extent, on the economic environment, it becomes important for analysts to understand the economy.

For this, the following are their focus areas:

• Changes in various macro-economic factors like - National

income, Inflation, Interest rate and the unemployment rate 2 / 4

NISM XV Exam Questions and Answers

• 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 Understanding Industry - Correct Answers ✅Different industries face different challenges and opportunities. Their growth drivers could be significantly different. Accordingly, Research Analysts need to understand thoroughly the regulatory environment prevalent in the industry, business models, competition, operating factors, sensitivity of demand to price changes, consumers' behaviour etc.Understanding Companies - Correct Answers ✅Companies are also studied by analysts in two dimensions - Qualitatively and Quantitatively.Qualitative understanding is more about understanding why a particular business is better when compared to its peers, what are the strengths and weakness of the business model, how qualified and capable the management is and so on. Quantitative understanding would be more mathematical in nature. In this, analysts try to understand the balance sheets and profit and loss statements of last few years, cash flows, asset and liabilities and so on. 3 / 4

NISM XV Exam Questions and Answers Qualities of a Research Analyst - Correct Answers

✅Qualities that are desired in a good research analyst are:

• Good with numbers
• Good Excel/spreadsheet and other data analytical tools
• Clarity in financial concepts
• Ability to read and comprehend financial statements and

reports

• Ability to ask pertinent questions
• Attention to details
• Communication Skills - Written and Verbal

Securities - Correct Answers ✅Securities are financial instruments issued to raise funds. The primary function of the securities market is to enable the flow of capital from those that have it to those that need it. The securities market helps in the transfer of resources from those with idle or surplus resources to others who have a productive need for them. To state formally, the securities market provides channels for the conversion of savings into investments.

The term 'Securities' include:

• Shares, scrips, stocks, bonds, debentures, debenture stock

or other marketable securities of

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