NISM XV Chapter 1: Introduction to Research Analyst Profession

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Questions and Answers

What is the primary role of a Research Analyst?

  • To provide investment advice to clients based on research
  • To make investment decisions on behalf of clients
  • To manage investment portfolios for clients
  • To collect data and information to help clients make informed investment decisions (correct)

What type of data does a Research Analyst collect?

  • Neither micro nor macroeconomic data
  • Only macroeconomic data
  • Only microeconomic data
  • Both micro and macroeconomic data (correct)

What is an example of macroeconomic data?

  • Whole economy (GDP) (correct)
  • Industry analysis
  • Company management information
  • Individual customer behavior

What is a source of global economic data?

<p>International Monetary Fund (IMF) (D)</p> Signup and view all the answers

What is a key aspect of the analysis and decision-making process?

<p>Both qualitative and quantitative factors (D)</p> Signup and view all the answers

What is the purpose of a Research Analyst's interaction with a company?

<p>To analyze the company's performance in terms of profit, revenue, and cash (A)</p> Signup and view all the answers

What type of Research Analyst earns income through brokerage?

<p>Sell Side Analyst (D)</p> Signup and view all the answers

Who can be a client of an Independent Research Analyst?

<p>Anyone, including Investors and Institutions (A)</p> Signup and view all the answers

What type of Research Analyst publishes a research report for their own investment decisions?

<p>Buy Side Analyst (C)</p> Signup and view all the answers

What is a unique feature of Independent Research Analysts?

<p>They sell their research on a subscription basis (B)</p> Signup and view all the answers

Flashcards

Research Analyst

A professional who gathers and analyzes data to help clients make sound investment choices.

Macroeconomic Data

Data pertaining to the overall performance of a country's economy.

IMF (International Monetary Fund)

An international organization that collects and provides global economic statistics.

Quantitative Analysis

Information based on facts and figures, often expressed as numbers.

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Qualitative Analysis

Information based opinions, insights, and understanding.

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Sell-Side Analyst

A type of research analyst employed by a brokerage firm, whose income is based on selling research.

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Independent Research Analyst

A type of research analyst who works independently and sells their research to clients.

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Buy-Side Analyst

A type of research analyst who works for a company or institution, conducting research primarily for their own investment decisions.

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Research Report

A detailed report summarizing company performance, market trends, and investment recommendations.

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Study Notes

Primary Role of a Research Analyst

  • Research Analysts evaluate investment opportunities through data analysis and market insights.
  • Their analysis informs decision-making for individuals and organizations regarding investments.

Data Collected by Research Analysts

  • Analysts collect quantitative data, such as financial figures, market trends, and economic indicators.
  • Qualitative data may include corporate strategies, industry developments, and competitor assessments.

Example of Macroeconomic Data

  • Gross Domestic Product (GDP) is a key example of macroeconomic data, reflecting a country’s economic performance.

Source of Global Economic Data

  • International organizations like the World Bank and International Monetary Fund (IMF) provide reliable global economic data.

Key Aspect of Analysis and Decision-Making Process

  • Accurate interpretation of data trends is crucial for making sound investment decisions and predicting future market behavior.

Purpose of Interaction with a Company

  • Research Analysts engage with companies to gather insights that enhance their understanding of a firm's operations and future prospects.

Type of Research Analyst Earning Income through Brokerage

  • Sell-Side Research Analysts work for brokerage firms and generate income through commissions and sales of their research.

Client of an Independent Research Analyst

  • Independent Research Analysts can serve a variety of clients, including institutional investors, hedge funds, and individual investors seeking unbiased information.

Type of Research Analyst Publishing Research Reports

  • Buy-Side Research Analysts publish reports to guide their investment decisions, often used internally within investment firms.

Unique Feature of Independent Research Analysts

  • They provide objective insights free from conflicts of interest, as they are not tied to any brokerage or investment firm.

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