Introduction to the research analyst profession: NISM Series XV notes and practice questions

Q1. Which statement best describes “Buy-side and sell-side”?

1. Sell-side analysts work for brokers and publish research for clients; buy-side analysts work for fund managers and research for their own investment decisions.
2. Many commodities are priced in dollars, so a weaker rupee raises their domestic prices, other things equal.
3. Management quality is judged by track record, capital allocation, transparency, integrity and alignment with shareholders.
4. A doji forms when the open and close are almost equal, signalling indecision between buyers and sellers.

Q2. Which statement about “Objectivity and independence” is correct?

1. A moving average shows a single day's high.
2. The research process ends with the first report.
3. Research must be independent, based on facts and free of undue influence from the subject company or trading desks.
4. An analyst may change a rating at the request of the subject company.

Q3. A person who writes a report recommending a share with a target price. Which idea does this illustrate?

1. Breakout
2. Front running
3. Elliott wave
4. Research analyst

Q4. An analyst at a mutual fund researches stocks only for the fund's use. Which idea does this illustrate?

1. Reasonable basis
2. Objectivity and independence
3. Buy-side and sell-side
4. Monetary policy