Research Analyst Certification Free Demo Test 4

Explanation:

In discounted cash flow-based valuation, alterations in the risk-free rate of return affect bond prices but do not impact share prices.

Explanation:

The essential components of a research report comprise: Company business description, peer group analysis, shareholding pattern, key strengths, key concerns, industry overview, company fundamentals, vital financial indicators, and financial statements.

Explanation:

Fiscal deficit refers to the planned excess of a government’s expenditure over its revenues within a specific year.

Strategies to Decrease Government Deficit:

• Prioritize tax-based revenues, implementing measures to curb tax evasion effectively.
• Opt for disinvestment in underutilized assets.
• Reduce government subsidies to mitigate the deficit.
• Avoid unplanned expenditures whenever possible.
• Secure funds through borrowing from domestic sources.
• Explore borrowing options from external sources.
• Broaden the tax base to aid in reducing the government deficit.

Explanation:

Michael Porter’s Industry Analysis Model, known as the Five Forces Model, evaluates industries based on five key forces categorized into two vertical and three horizontal elements.

Horizontal Forces:

1. Threat of Substitutes
2. Threat of New Entrants
3. Threat of Established Rivals

Vertical Forces:

1. Bargaining Power of Suppliers
2. Bargaining Power of Customers

Explanation:

A comprehensive research report is expected to offer an in-depth company analysis rather than a brief overview. It should encompass intricate details such as the company’s business model, competitive advantages, opportunities, threats, management competency, and vision, among other essential factors.

Explanation:

The Income Statement, also known as the Profit and Loss Statement, encompasses all types of expenses incurred by a company. Depreciation and amortisation are considered company expenses.

Depreciation signifies the gradual and permanent reduction in the value of assets due to aging, use, and obsolescence, while amortisation refers to the gradual write-off of intangible assets over their lifespan.

On the other hand, Accounts Receivable, Long-term Debt, Current Assets, and Current Liabilities are components featured in the company’s Balance Sheet.

Explanation:

The unemployment rate represents the percentage of the eligible and willing-to-work population without jobs in a country.

In economic slowdowns, the unemployment rate increases, while during expansion phases, it decreases due to the creation of more jobs with the rise in production.

Explanation:

Insider information pertains to significant non-public data that, upon disclosure, would promptly influence an investor’s decision to trade securities. The classification of information as insider depends on its source reliability, impact, and certainty.

Among the options provided, the Managing Director discussing an undisclosed acquisition proposal is deemed insider information.

Explanation:

Regulation 8, regarding capital adequacy, states that individual or partnership research analysts must maintain net tangible assets of at least one lakh rupees. For research analysts operating as body corporate or limited liability partnership firms, a minimum net worth of twenty-five lakh rupees is required.

Explanation:

Publicly known information does not fall under unfair trade practices as per the SEBI (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Markets) Regulation, 2003.