Research Analyst (Series XV): 25 practice questions with answers

Our own questions on the subjects of this examination, under 10 topic headings. Try each before opening its answer.

Take these as a test About the examination

How to use this page

Read a question, choose your answer, and only then open "Show the answer". Each answer has a line of explanation; if it surprises you, find the topic in NISM's workbook and read that part again. The questions are written by us in the four kinds a multiple choice paper uses: definitions, roles, rules of principle and calculations. They are not NISM's questions and the real paper will word things differently, so learn the idea, not the sentence. We have left out figures that the regulator or the exchanges revise, such as tax rates, limits, timings and margins: take those from the current workbook. The real paper has 100 questions in 120 minutes with a pass mark of 60%; a wrong answer costs 25% of the marks of the question.

The questions

Research analyst profession

1. The primary role of a research analyst is to

1. execute trades for clients
2. manage a mutual fund
3. audit company accounts
4. study companies and securities and make recommendations based on analysis

2. A sell-side analyst typically works for

1. a pension fund
2. a company's own finance department
3. a brokerage or investment bank that provides research to clients
4. a mutual fund

Fundamentals of research

3. In the top-down approach, analysis proceeds in the order

1. company, industry, economy
2. company, economy, industry
3. economy, industry, company
4. industry, company, economy

4. Technical analysis is based mainly on

1. financial statements
2. management interviews
3. past price and volume data
4. macro-economic forecasts

Economic analysis

5. Gross Domestic Product measures

1. government borrowing
2. the stock market index
3. the money supply
4. the total market value of goods and services produced in a country in a period

6. A general and sustained rise in the price level is

1. deflation
2. recession
3. inflation
4. depreciation

Industry analysis

7. In Porter's five forces framework, which of these is one of the forces?

1. Threat of new entrants
2. Dividend policy
3. Earnings per share
4. Share buy-back

8. An industry whose sales rise and fall strongly with the economic cycle is called

1. defensive
2. mature
3. cyclical
4. regulated

Company analysis

9. A company has profit after tax of ₹50 crore and 5 crore equity shares. Its earnings per share is

1. ₹250
2. ₹5
3. ₹10
4. ₹25

10. A share trades at ₹300 and its EPS is ₹15. The price to earnings ratio is

1. 20
2. 45
3. 5
4. 15

11. A company earns profit after tax of ₹20 crore on shareholders' equity of ₹100 crore. Its return on equity is

1. 120%
2. 80%
3. 5%
4. 20%

12. A share priced at ₹200 pays a dividend of ₹6 per share. The dividend yield is

1. 6%
2. 12%
3. 3%
4. 1.2%

13. A company has a net worth of ₹500 crore and 10 crore shares. At a market price of ₹150, the price to book value ratio is

1. 3
2. 0.33
3. 15
4. 5

14. The statement that shows a company's assets, liabilities and equity on a given date is the

1. balance sheet
2. director's report
3. cash flow statement
4. statement of profit and loss

15. A debt to equity ratio that rises sharply over several years indicates that the company is

1. paying higher dividends
2. issuing bonus shares
3. reducing its expenses
4. relying more on borrowed funds

Corporate actions

16. After a 1:1 bonus issue, other things equal, the company's market capitalisation

1. halves
2. doubles
3. becomes zero
4. is broadly unchanged

17. A buy-back of shares by a company

1. converts debt to equity
2. increases the number of shares outstanding
3. is the same as a rights issue
4. reduces the number of shares outstanding

Valuation principles

18. In discounted cash flow valuation, the value of a business is the

1. sum of its past profits
2. book value of its assets
3. present value of its expected future cash flows
4. last traded price

19. Other things equal, a higher discount rate will give

1. a higher present value
2. a lower present value
3. a negative value
4. the same present value

20. The present value of ₹121 receivable after two years at a discount rate of 10% a year is

1. ₹110
2. ₹96.80
3. ₹100
4. ₹101

Risk and return

21. Risk that affects the whole market and cannot be removed by diversification is

1. credit risk
2. business risk
3. unsystematic risk
4. systematic risk

22. A share with a beta of 1.5 is expected, on average, to

1. not move at all
2. move less than the market
3. move opposite to the market
4. move more than the market

Research report

23. A good research report should

1. hide conflicts of interest
2. avoid numbers
3. state its assumptions, risks and the basis of the recommendation
4. guarantee a target price

Technical analysis

24. A price level at which buying interest has repeatedly stopped a fall is called

1. support
2. resistance
3. breakout
4. gap

25. A moving average of prices is used mainly to

1. smooth price data and identify the trend
2. find the book value
3. calculate dividends
4. measure earnings

What next

When you can answer these without hesitation, take them in timed test mode, where the order of questions and options is shuffled and a quarter mark is deducted for a wrong answer. Then return to the workbook for every topic where you slipped. See also how to prepare and exam day.

Other examinations

An independent practice site. NISM is the National Institute of Securities Markets. This site is not connected with, approved by or paid by NISM or SEBI, and uses none of their logos. The questions are our own; none is taken from NISM's question bank, workbooks or mock tests, and a score here does not predict a result. Examination facts were read on nism.ac.in on 12 November 2026 and can change: check the page of your module on nism.ac.in before you pay or prepare. Nothing here is investment advice.