Research Analyst Certification Free Demo Test 5

Explanation:

OTC markets are the markets where trades are directly negotiated between two or more counterparties. There is no Stock Exchange or any other Exchange involved.

In this type of market, the securities, commodities etc. are traded and settled among the counterparties directly.

For eg – An Exporter selling US Dollars to a Bank.

Explanation:

A bonus issue, also known as equity dividend, is an alternative to cash dividend. Bonus shares are issued to the existing shareholders by the company without any consideration from them. The reserves lying in the books of the company (shareholders’ money) gets transferred to another head i.e. paid-up/subscribed capital (Except Capital reserve and revaluation reserve)

The shareholders do not pay anything for these shares and there is no change in the value of their holdings in the pre and post-bonus stages. The issuance of bonus shares is more to influence the psychology of investors without any economic impact.

Explanation:

Quantitative analysis (QA) with reference to financial research is collecting, evaluating and assessing data to understand patterns in the past, present and future. Understanding more about quantitative analysis can help you better use and interpret data.

In this, analysts try to understand the balance sheets and profit and loss statements of last few years, cash flows, assets and liabilities and so on. Quantitative approach can be used for both technical analysis and fundamental analysis and can be used by both traders and investors.

Explanation:

A complete study of company by an equity analyst will involve : Economic analysis 2. Industry analysis 3. Company analysis

Therefore, while researching a company, the equity analyst need to focus his studies on the boarder economy, the industry to which the company belongs and the company.

Explanation:

In Options, the buyers have the RIGHT but NO OBLIGATIONS.

The Writers (sellers) have the Obligations.

The Call writer has the obligation to sell / give delivery of the asset to the Call Buyer at a predetermined price.

The Put writer has the obligation to buy / take delivery of the asset from the Put Buyer at a predetermined price.

Call gives the buyer the right, but not the obligation, to buy a given quantity of the underlying asset, at a given price on or before a given future date.

Put gives the buyer the right, but not the obligation, to sell a given quantity of the underlying asset at a given price on or before a given date.

Explanation:

As per rules, a professional qualification or post-graduate degree or post graduate diploma in finance, accountancy, business management, commerce, economics, capital market, financial services or markets is required to become a Research Analyst.

Company Secretary is not a professional qualification in the fields mentioned above.

A graduate in any discipline with an experience of at least five years in activities relating to financial products or markets or securities or fund or asset or portfolio management is also considered as valid qualification.

Explanation:

It is given that EV/EBITDA = 6

EBITDA is given as Rs. 275 crores

Therefore EV / 275 crores = 6

EV (Enterprise Value) = 275 x 6 = 1650 crores

Enterprise Value = Value of Equity + Value of Debt

1650 crores = Value of Equity + 520 crores

Value of Equity = 1650 – 520 = Rs. 1130 crores

Explanation:

Environment, Social and Corporate governance (ESG)

Independent directors are those who do not have any material relationship with the company, its management, or its major shareholders. They are considered independent in their judgment and decision-making, free from any conflicts of interest that may compromise their ability to act in the best interests of the company and its stakeholders.

Independent directors are responsible for overseeing the company’s ESG performance. They play a critical role in guiding the company’s ESG strategy, monitoring progress, and reporting to stakeholders.

Board composition: The directors of a company can include independent directors, nonexecutive directors (who are not part of management but not independent, either), and executive directors. For the sake of strong corporate governance standards, majority of the board should comprise of independent directors. Currently, SEBI regulation stipulates that independent directors should constitute at least 50% of the board if the chairman is an executive director.

Explanation:

When an economy is in a recession, the Government resorts to Expansionary fiscal policy by pumping in more money in the economy to boost demand.

A low fiscal deficit means the Government has plenty of money to pump in the economy without restoring to huge borrowings etc.

Explanation:

According to technical analysis, there are three essential elements in understanding the price behaviour:

1. The history of past prices provides indications of the underlying trend and its direction. 2. The volume of trading that accompanies price movements provides important inputs on the underlying strength of the trend. 3. The time span over which price and volume are observed factors in the impact of long term factors that influence prices over a period of time.