NISM Research Analyst Mock Test – 100 Questions Free

NISM Research Analyst Mock Test 2025

About the NISM Series XV: Research Analyst Exam

This certification is mandatory under SEBI (Research Analysts) Regulations, 2014, for professionals engaged in preparing or publishing research reports. It validates your skills in financial analysis, valuation, and report writing.

Exam Pattern:

• Total Questions: 100 (MCQs)
• Total Marks: 100
• Passing Score: 60% (60 marks)
• Negative Marking: 25% (0.25 marks) for each wrong answer.
• Duration: 2 Hours (120 minutes)

Official Resource: For the complete syllabus and to register for the exam, please visit the official NISM Research Analyst page.

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1. Which of the following is considered a leading economic indicator?

A) GDP Growth Rate B) Unemployment Rate C) Stock Market Returns D) Corporate Profits

2. The Price-to-Earnings (P/E) ratio is calculated as:

A) Market Price per Share / Earnings Per Share (EPS) B) Earnings Per Share (EPS) / Market Price per Share C) Total Market Capitalization / Total Sales D) Total Assets / Total Liabilities

3. Which financial statement presents a snapshot of a company's assets, liabilities, and equity at a specific point in time?

A) Income Statement B) Cash Flow Statement C) Balance Sheet D) Statement of Retained Earnings

4. Porter's Five Forces model is used for:

A) Company Analysis B) Industry Analysis C) Economic Analysis D) Management Analysis

5. If the Reserve Bank of India (RBI) increases the Repo Rate, what is the most likely impact on the economy?

A) Loans will become cheaper B) Inflation will increase C) Loans will become more expensive, reducing liquidity D) Liquidity in the economy will increase

6. An analyst assessing the impact of a sudden 30% rise in crude oil prices on an airline company's profitability is primarily conducting:

A) Industry Analysis B) Scenario Analysis C) Management Analysis D) DuPont Analysis

7. In a Discounted Cash Flow (DCF) valuation, what does the 'Terminal Value' represent?

A) The cash flows of the first five years B) The present value of all future cash flows beyond the explicit forecast period C) The current book value of the company's assets D) The total debt paid by the company

8. When a company buys its own shares back from the marketplace, it is called a:

A) Rights Issue B) Stock Split C) Bonus Issue D) Buyback

9. What does EBITDA stand for?

A) Earnings Before Interest, Taxes, Depreciation, and Amortization B) Earnings Before Income, Taxes, and Debt Allowance C) Equity Before Interest, Taxes, and Debt Amortization D) Earnings Before Interest, Transfer, and Depreciation Allowance

10. An industry in the 'maturity' stage of its life cycle is typically characterized by:

A) Rapid revenue growth and high R&D spending B) Negative profits and high failure rates C) Slow growth, intense competition, and stable cash flows D) Declining sales and industry consolidation

11. In PESTLE analysis, the letter 'L' stands for:

A) Liquidity B) Legal C) Liability D) Leadership

12. A 'red flag' in company analysis could be:

A) Consistently rising profit margins B) A growing gap between Net Profit and Cash Flow from Operations C) A low Debt-to-Equity ratio D) Regular dividend payments

13. The three main components of a Cash Flow Statement are cash flows from:

A) Income, Expenses, and Profits B) Assets, Liabilities, and Equity C) Operating, Investing, and Financing activities D) Revenues, Costs, and Margins

14. If a company's Price-to-Book (P/B) ratio is less than 1, it might indicate that the stock is:

A) Overvalued B) Potentially undervalued or the company is in distress C) A high-growth stock D) A debt-free company

15. As per SEBI (Research Analyst) Regulations, 2014, an analyst must disclose what in their research report?

A) Their academic qualifications B) Any financial interest of their own or their relatives in the subject company C) Their previous job experience D) Their entire personal investment portfolio

16. A short Cash Conversion Cycle (CCC) indicates that a company:

A) Is highly leveraged B) Is efficient in managing its working capital C) Has low profitability D) Is facing liquidity issues

17. An economic recession is generally defined as:

A) Two consecutive quarters of negative GDP growth B) A 10% fall in the stock market C) The unemployment rate rising above 5% D) Inflation falling below 2%

18. How is Dividend Yield calculated?

A) (Market Price per Share / Annual Dividend per Share) * 100 B) (Annual Dividend per Share / Market Price per Share) * 100 C) (Total Dividend Paid / Net Profit) * 100 D) (EPS / Dividend per Share) * 100

19. In a 'Bottom-Up' approach, an analyst's primary focus is on:

A) Macroeconomic trends B) Overall industry performance C) The fundamentals of a specific company D) Global market conditions

20. Michael Porter's generic strategies for competitive advantage are:

A) High Growth, High Margin, High Volume B) Cost Leadership, Differentiation, and Focus C) Innovation, Marketing, and Operations D) Mergers, Acquisitions, and Joint Ventures

21. What does WACC stand for?

A) Weighted Average Cost of Capital B) Working Average Cost of Capital C) Weighted Asset Cost of Capital D) Working Asset Cost of Capital

22. The term 'Economic Moat' refers to a company's:

A) Physical headquarters B) Sustainable competitive advantage C) Total outstanding debt D) Market share

23. If a stock has a beta of 1.2, it means the stock is:

A) 20% less volatile than the market B) 20% more volatile than the market C) Perfectly correlated with the market D) Negatively correlated with the market

24. Free Cash Flow to the Firm (FCFF) represents the cash available to be distributed to:

A) All stakeholders (both equity and debt holders) B) Only equity shareholders C) The government as tax D) The company for reinvestment only

25. GAAP stands for:

A) Generally Accepted Auditing Principles B) Generally Accepted Accounting Principles C) General Accounting and Auditing Procedures D) General Accepted Accounting Procedures

26. Amortization is an accounting term that refers to the expensing of:

A) Tangible Assets B) Intangible Assets C) Current Liabilities D) Inventory

27. A Current Account Deficit (CAD) occurs when:

A) A country's exports exceed its imports B) A country's imports exceed its exports C) Government spending exceeds its revenue D) A country's savings exceed its investments

28. The effect of a 'Bonus Issue' on shareholders is that:

A) The total value of their shares increases B) The number of shares they hold increases, but the total investment value remains the same C) They receive an extra cash payment D) The company's market capitalization doubles

29. In a SWOT analysis, 'T' stands for:

A) Technology B) Target C) Threats D) Trade

30. The Debt-to-Equity Ratio is a measure of a company's:

A) Profitability B) Operational efficiency C) Financial leverage D) Liquidity

31. Relative valuation techniques involve:

A) Discounting future cash flows to the present B) Valuing a company's tangible assets C) Comparing a company's valuation multiples to those of comparable companies D) Analyzing only the historical performance of the company

32. Fiscal Policy is controlled by:

A) The Reserve Bank of India (RBI) B) The Government (Ministry of Finance) C) SEBI D) Commercial Banks

33. A 'growth stock' is typically characterized by:

A) High dividend payouts B) A low P/E ratio C) Expected earnings growth at an above-average rate compared to the market D) Low volatility

34. How is Book Value Per Share calculated?

A) Total Assets / Number of Outstanding Shares B) (Total Equity) / Number of Outstanding Shares C) Market Capitalization / Number of Outstanding Shares D) Net Profit / Number of Outstanding Shares

35. A 'Hold' rating in a research report generally means the analyst expects the stock to:

A) Underperform the market B) Outperform the market significantly C) Perform in line with the broader market D) Be highly volatile

36. Diluted EPS takes into account the potential dilution from:

A) Only existing equity shares B) Convertible securities, stock options, and warrants C) Only preference shares D) Only shares held by promoters

37. The formula for Enterprise Value (EV) is:

A) Market Capitalization + Total Debt - Cash and Cash Equivalents B) Market Capitalization - Total Debt + Cash and Cash Equivalents C) Total Assets - Total Liabilities D) Market Capitalization + Total Assets

38. A cyclical stock is a stock whose price is highly affected by:

A) Seasonal weather patterns B) Ups and downs in the overall economy C) Technological innovations D) Changes in government regulations

39. Ind-AS stands for:

A) Indian Auditing Standards B) Indian Asset Standards C) Indian Accounting Standards D) Indian Assessment Standards

40. A key characteristic of a research report is that it must have a:

A) Guaranteed price target B) Rational basis and adequate disclosures C) Minimum length of 50 pages D) Positive outlook on the company

41. DuPont analysis breaks down which financial ratio into its component parts?

A) Debt-to-Equity Ratio B) Return on Equity (ROE) C) Price-to-Earnings (P/E) Ratio D) Current Ratio

42. What is the primary objective of Monetary Policy?

A) To adjust tax rates B) To manage government spending C) To maintain price stability and control inflation D) To regulate foreign trade

43. In a cash flow statement, 'Cash Flow from Investing Activities' would include:

A) Issuance of shares B) Payment of dividends C) Purchase or sale of machinery D) Cash received from sale of goods

44. Market Capitalization is calculated as:

A) Total Assets x Number of Outstanding Shares B) Current Market Price per Share x Number of Outstanding Shares C) Total Sales x Earnings Per Share D) Enterprise Value - Net Debt

45. What is the minimum period for which a research analyst or research entity must maintain records such as research reports, recommendations, and their basis?

A) 2 years B) 3 years C) 5 years D) 8 years

46. A Deferred Tax Asset is created when:

A) A company pays more tax to the authorities than what is shown in the income statement B) A company pays less tax to the authorities than what is shown in the income statement C) A company makes a profit D) A company has negative net worth

47. Which of the following is the best measure of a company's profitability?

A) Net Profit alone B) Revenue alone C) Ratios like Operating Margin and Net Profit Margin D) EPS alone

48. The Price-to-Sales (P/S) ratio can be useful for valuing companies that:

A) Are consistently profitable B) Are not profitable or are in cyclical industries C) Are only banking companies D) Are only government-owned companies

49. The Asset Turnover Ratio measures:

A) How profitable a company is with its assets B) How efficiently a company is using its assets to generate sales C) How quickly a company pays its debts D) How quickly a company sells its inventory

50. Which of the following cognitive biases should a research analyst avoid?

A) Confirmation Bias B) Anchoring Bias C) Herd Mentality D) All of the above

51. 'Goodwill' is recorded on the balance sheet when:

A) A company builds a strong brand B) A company acquires another company for more than the fair market value of its net assets C) A company makes a profit for the first time D) A company launches a new successful product

52. The formula for the Current Ratio is:

A) Current Assets / Current Liabilities B) Current Liabilities / Current Assets C) (Cash + Receivables) / Current Liabilities D) Total Assets / Total Liabilities

53. GDP stands for:

A) Gross Domestic Product B) Gross Domestic Price C) General Domestic Product D) Gross Development Product

54. When evaluating a company's management, an analyst should look at:

A) Management's experience and track record B) Corporate governance standards C) Capital allocation skills D) All of the above

55. A 'Cost Leadership' strategy involves:

A) Providing products or services at the lowest cost in the industry B) Offering unique and differentiated products C) Focusing on a niche market segment D) Charging the highest price for premium products

56. The Inventory Turnover Ratio indicates:

A) How profitable the company is B) How many times a company sells and replenishes its inventory over a period C) How much debt the company has D) How quickly the company pays its bills

57. 'Consolidated Financial Statements' include the financials of:

A) The parent company only B) The parent company and all its subsidiary companies combined C) Subsidiary companies only D) The company's foreign branches only

58. The primary objective of the SEBI (Research Analyst) Regulations, 2014, is to:

A) Increase the income of analysts B) Address conflicts of interest and foster objectivity C) Force companies to pay higher dividends D) Limit trading in the stock market

59. A characteristic of a 'Defensive Stock' is that it:

A) Provides consistent earnings and dividends even during economic downturns B) Is a high-growth technology stock C) Is highly volatile D) Has a beta greater than 1.5

60. Free Cash Flow to Equity (FCFE) is calculated as:

A) FCFF - Interest Expense (1-Tax Rate) + Net Borrowing B) Net Income + Depreciation - Capital Expenditure C) EBITDA - Tax - Capital Expenditure D) Net Income + Non-cash charges - Working Capital Investment

61. An independent research analyst is prohibited from dealing or trading in securities that they recommend for _____ days before and _____ days after the publication of a research report.

A) 15; 3 B) 30; 5 C) 10; 3 D) 45; 10

62. The PEG ratio is calculated as:

A) (P/E Ratio) / EPS Growth Rate B) (P/B Ratio) / EPS Growth Rate C) P/E Ratio x EPS Growth Rate D) EPS / P/E Ratio

63. 'Window dressing' in accounting refers to:

A) Decorating the company office for an event B) Actions taken to make financial statements look better than they actually are C) A new marketing strategy D) Giving bonuses to employees

64. The Capital Asset Pricing Model (CAPM) is used to determine the:

A) Intrinsic value of a stock B) Required or expected rate of return for an asset C) Level of debt a company can take on D) Future sales of a company

65. What does IIP stand for in economics?

A) Index of Industrial Production B) Index of Inflationary Prices C) Indian Industrial Policy D) Index of International Prices

66. What is the purpose of a 'disclaimer' in a research report?

A) To make the report longer B) To limit legal liabilities and disclose conflicts of interest C) To promote the company's products D) To list the analyst's achievements

67. 'Sensitivity Analysis' is used in financial modeling to:

A) See how the output is affected by changes in different input variables B) Analyze the quality of a company's management C) Analyze past financial performance D) Understand industry competition

68. The Interest Coverage Ratio measures a company's ability to:

A) Pay its dividends B) Meet the interest payments on its outstanding debt C) Grow its assets D) Generate profits

69. Which institution conducts Monetary Policy in India?

A) Ministry of Finance B) SEBI C) Reserve Bank of India (RBI) D) NITI Aayog

70. In the DCF approach, if the Weighted Average Cost of Capital (WACC) increases, the intrinsic value of the stock will:

A) Increase B) Decrease C) Remain unchanged D) Become zero

71. The primary driver of 'Wealth Creation' for shareholders is when:

A) Sales are high B) Costs are low C) The Return on Invested Capital (ROIC) is greater than the Cost of Capital D) Market share is high

72. 'Creative Accounting' refers to:

A) A new and innovative approach to accounting B) Using accounting rules to produce a misleadingly favorable view of a company's financial performance C) Accounting for art and design companies D) A fully automated accounting system

73. A 'Rights Issue' is an invitation to:

A) The general public to buy new shares B) Existing shareholders to purchase additional new shares in the company C) The company to buy back its shares D) Split existing shares into smaller denominations

74. What does WPI stand for?

A) Wholesale Price Index B) Working Price Index C) World Price Index D) Wholesale Production Index

75. The key difference between Scenario Analysis and Sensitivity Analysis is that:

A) Scenario analysis is qualitative while sensitivity analysis is quantitative. B) Sensitivity analysis changes one variable at a time, while scenario analysis changes several variables simultaneously. C) Scenario analysis is only used for short-term forecasts. D) There is no difference; the terms are interchangeable.

76. A research analyst should deal with all clients:

A) Based on their portfolio size B) Fairly and equitably C) By giving information to large clients first D) Only with positive recommendations

77. A 'Sunset Industry' refers to an industry that is:

A) New and rapidly growing B) In a state of terminal decline C) Related to solar energy D) A seasonal industry

78. 'Insider Trading' is the act of trading securities based on:

A) Publicly available information B) Material, non-public information C) Technical chart patterns D) Analyst recommendations

79. What does EVA stand for?

A) Enterprise Value Added B) Economic Value Added C) Equity Value Added D) Estimated Value Added

80. The 'Target Price' in a research report indicates:

A) The current market price of the stock B) The analyst's projection of the stock's future price over a certain period C) The all-time high price of the stock D) The book value of the stock

81. 'Concentration Risk' refers to the risk associated with:

A) Having too much of an investment portfolio in a single stock or sector B) The volatility of the overall market C) Changes in interest rates D) Fluctuations in currency exchange rates

82. Which of the following is typically NOT found in a company's annual report?

A) Balance Sheet B) Income Statement C) Directors' Report D) Quarterly earnings forecasts from multiple analysts

83. 'Alpha' in the context of an investment measures:

A) The volatility of the investment B) The return of the investment relative to the market C) The excess return of an investment relative to the return of a benchmark index D) The total return

84. 'Liquidity' refers to:

A) A company's profitability B) The ease with which an asset can be converted into cash without affecting its market price C) The total debt on a company's balance sheet D) A company's market share

85. What does NISM stand for?

A) National Institute of Stock Markets B) National Institute of Securities Markets C) National Investment in Securities Markets D) National Institute of Share Markets

86. The Dividend Payout Ratio is calculated as:

A) Total Dividends / Net Income B) Net Income / Total Dividends C) Dividend per Share / Market Price per Share D) Earnings per Share / Dividend per Share

87. A company's 'Credit Rating' is an assessment of its:

A) Future stock performance B) Management quality C) Ability to meet its debt obligations D) Sales growth potential

88. 'Sum-of-the-Parts' valuation is most appropriate for:

A) A company with multiple, distinct business segments (a conglomerate) B) A company that sells only a single product C) A new startup company with no revenue D) A pure-play software company

89. An analyst is studying the impact of rising interest rates on the housing finance industry. This is an example of:

A) Company-specific analysis B) Technical analysis C) Thematic analysis linking economy and industry D) Management quality assessment

90. Under SEBI regulations, a research report must be reviewed and approved by whom before publication?

A) The company's CEO B) SEBI officials C) The compliance officer or a qualified supervisor D) A panel of investors

91. The 'Float' of a stock refers to:

A) The total number of shares issued by the company B) The number of shares available for public trading C) The shares held by promoters and insiders D) The shares bought back by the company

92. The 'Ex-Dividend Date' is the date:

A) On which the dividend is announced B) On or after which a stock is traded without its previously declared dividend C) On which the dividend is paid to shareholders D) On which the company finalizes the list of shareholders eligible for dividend

93. 'Degree of Operating Leverage' is concerned with the relationship between:

A) Debt and equity B) Sales and operating income (EBIT) C) Interest costs and net income D) Assets and sales

94. A good research report should be:

A) Clear, concise, and objective B) Filled with only positive information C) Using complex language and jargon to sound professional D) Without any mention of risks

95. The 'Quick Ratio' or 'Acid-Test Ratio' excludes which of the following from current assets?

A) Cash B) Accounts Receivable C) Inventory D) Short-term investments

96. A 'Value Trap' is a stock that:

A) Appears to be a growth stock but isn't B) Appears to be cheap based on valuation multiples, but is cheap for a good reason (e.g., poor fundamentals) C) Is trading well above its intrinsic value D) Is guaranteed to provide high returns

97. The primary function of the Securities and Exchange Board of India (SEBI) is to:

A) Regulate the banking sector B) Protect the interests of investors in securities and regulate the securities market C) Raise funds for the government D) Set corporate tax rates

98. The concept of 'Margin of Safety' was popularized by:

A) Warren Buffett B) Peter Lynch C) Benjamin Graham D) George Soros

99. A research analyst must maintain a _____ basis for their recommendations.

A) Personal B) Rational C) Emotional D) Speculative

100. Why must a company's balance sheet always balance?

A) Because it's a legal requirement only B) Because of the fundamental accounting equation: Assets = Liabilities + Equity C) Because it looks visually appealing to investors D) Because auditors demand it without any underlying principle

Disclaimer

This mock test is intended for educational and practice purposes only. The questions are designed based on the NISM syllabus but are not official NISM questions. Performance in this mock test does not guarantee passing the official certification exam. We are not affiliated with NISM. For the most accurate and up-to-date information, please refer to the official NISM website.