NISM Certification Overview
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Questions and Answers

What key aspect does NISM provide to assist candidates in preparing for its examinations?

  • Comprehensive online courses
  • One-on-one coaching sessions
  • Free access to industry seminars
  • Lucid and focused workbooks (correct)

    • Which approach is NOT covered in the research preparation material provided by NISM?

  • Top down approach
  • Bottom up approach
  • Qualitative analysis
  • Technical analysis (correct)

    • What is the primary purpose of the publication issued by NISM?

  • To provide general reading and educational content (correct)
  • To serve as a legal guide for investments
  • To endorse financial products
  • To offer specific investment strategies

    • Which of the following is a key topic included in the NISM research preparation material?

    <p>Fundamentals of risk and return</p> Signup and view all the answers

    As of March 2023, how many certificates has NISM issued through its programs?

    <p>More than 17 lakh</p> Signup and view all the answers

    Which of the following is NOT a responsibility of NISM or SEBI regarding the publication?

    <p>Assuming responsibility for the publication</p> Signup and view all the answers

    What type of analysis must candidates understand according to the NISM research preparation content?

    <p>Micro and macro-economic analysis</p> Signup and view all the answers

    What does the disclaimer emphasize regarding the views expressed in the publication?

    <p>They may not suit individual circumstances</p> Signup and view all the answers

    What is the primary function of a depository in the securities market?

    <p>To hold securities in electronic form</p> Signup and view all the answers

    Who appoints the Depository Participants (DPs)?

    <p>The depository with SEBI's approval</p> Signup and view all the answers

    Which of the following is NOT true regarding Trading Members?

    <p>They are appointed by depositories</p> Signup and view all the answers

    What role does an Authorized Person serve in the stock market?

    <p>An agent appointed by a stock broker to connect with investors</p> Signup and view all the answers

    Which of the following institutions is NOT qualified to be a Depository Participant?

    <p>Government organizations not authorized by RBI</p> Signup and view all the answers

    What is the primary service offered by Depository Participants?

    <p>Facilitating transactions in dematerialized securities</p> Signup and view all the answers

    How many depositories are currently registered with SEBI in India?

    <p>Two</p> Signup and view all the answers

    Which statement accurately reflects the role of clearing banks in stock exchanges?

    <p>They manage funds and securities settlement for trades</p> Signup and view all the answers

    Which of the following best describes equity shares?

    <p>Fractional ownership in a business venture that carries risk and potential rewards.</p> Signup and view all the answers

    What is a key characteristic of debentures?

    <p>They can be unsecured or secured, with various types available.</p> Signup and view all the answers

    Who regulates equity shares in the Indian securities market?

    <p>The Securities and Exchange Board of India (SEBI).</p> Signup and view all the answers

    Which financial product is primarily used to raise long-term debt?

    <p>Debentures/Bonds/Notes.</p> Signup and view all the answers

    What is Electronic Gold Receipt (EGR) considered in the Indian financial market?

    <p>A security as per the Central Government's declaration.</p> Signup and view all the answers

    What type of investors typically purchase equity shares?

    <p>Both institutional and individual investors.</p> Signup and view all the answers

    What is the main feature that differentiates fully convertible debentures from non-convertible ones?

    <p>Investors can convert fully convertible debentures into equity shares.</p> Signup and view all the answers

    Which of the following statements about government securities is true?

    <p>They may be declared as securities by the Central Government.</p> Signup and view all the answers

    What is a follow-on public offer primarily used for?

    <p>To raise equity capital for growth or restructure debt</p> Signup and view all the answers

    What is the maximum number of investors allowed for issuing shares under private placement according to the Companies Act 2013?

    <p>Fifty</p> Signup and view all the answers

    Who qualifies as a Qualified Institutional Buyer (QIB) in the context of Qualified Institutional Placements?

    <p>Financial institutions, mutual funds, and banks</p> Signup and view all the answers

    Which of the following is NOT considered a method of private placement?

    <p>Public issue of shares</p> Signup and view all the answers

    What does a preferential issue entail?

    <p>Issuing shares to specific persons without going public</p> Signup and view all the answers

    What must a privately placed security do to be listed on a stock exchange?

    <p>Meet the listing requirements of SEBI and the stock exchange</p> Signup and view all the answers

    Which of the following securities is excluded from a preferential issue?

    <p>Equity shares from qualified institutions placement</p> Signup and view all the answers

    What role does SEBI play in relation to the issuance of Qualified Institutional Placements?

    <p>It regulates who can issue securities and sets terms for issuance</p> Signup and view all the answers

    What aspect of companies is analyzed qualitatively?

    <p>The strengths and weaknesses of the business model</p> Signup and view all the answers

    Why is personal communication with management important for analysts?

    <p>It helps analysts gauge the company's vision and strategy.</p> Signup and view all the answers

    How do quantitative analysis methods differ from qualitative methods?

    <p>They involve mathematical evaluations of financial data.</p> Signup and view all the answers

    What is a potential risk when interacting with company management?

    <p>Management may exaggerate the positives about the business.</p> Signup and view all the answers

    Which of the following is NOT a quantitative analysis aspect?

    <p>Evaluating management effectiveness</p> Signup and view all the answers

    What might an analyst use to determine which company performs better among peers?

    <p>A thorough qualitative and quantitative evaluation</p> Signup and view all the answers

    Which of the following areas does industry analysis NOT typically cover?

    <p>Management communication strategies</p> Signup and view all the answers

    What is the main purpose of understanding the regulatory environment in industry analysis?

    <p>To assess risks and compliance related to business operations.</p> Signup and view all the answers

    Study Notes

    NISM Certification

    • NISM offers certifications in the Indian Securities Market.
    • NISM has provided over 17 lakh certifications to date (as of March 2023).
    • NISM publications support candidates to better understand the content for exams.

    Equity & Debt

    • Equity represents fractional ownership in a business venture.
    • Debentures are long-term debt, that can be secured or unsecured, convertible or non-convertible, and domestic or foreign currency.

    Public & Private Placement

    • Companies can issue equity shares through a fresh issue of capital in a follow-on public offer, an Offer for Sale, or private placements.
    • Private placements can be made through a Qualified Institutional Placement (QIP) or preferential allotment.
    • QIPs are limited to Qualified Institutional Buyers, like financial institutions, mutual funds, and banks.
    • A preferential issue is private placement to a select group of individuals or institutions.

    Securities Market Participants

    • Depositories are institutions that hold securities in electronic form.
    • Central Depository Services Limited (CDSL) and National Securities Depository Limited (NSDL) are the two main depositories in India.
    • Depository Participants (DPs) are appointed by the depository, and act as agents for investors to hold and transact securities electronically.
    • Trading Members/Stock Brokers are registered members of stock exchanges, who facilitate buy and sell transactions for investors.
    • An Authorised Person is an agent, appointed by a stock broker, to reach out to investors.

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    Related Documents

    NISM Series XV Research Analyst Workbook PDF

    Description

    This quiz covers key concepts related to NISM certifications in the Indian Securities Market, focusing on equity and debt instruments, public and private placements. Additionally, it touches upon the participants in the securities market. Test your knowledge on these essential topics to strengthen your understanding ahead of your certification exam.

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