Practice Set - 3 | Practice Set | NISM Series XV: Research Analyst Certification Examination

Question 1

If free cash flow is negative for several years but expected to turn positive later, which valuation challenge arises?

Question 2

Which condition violates the assumptions of Gordon Growth Model?

Question 3

In valuation, what does 'double counting' refer to?

Question 4

A company has high ROE but low P/B ratio. What could be a possible reason?

Question 5

If terminal value contributes more than 80% of total valuation, what does it imply?

Question 6

Which scenario results in underestimated intrinsic value?

Question 7

Why is P/E ratio misleading for cyclical companies?

Question 8

In a DCF model, if both discount rate and growth rate increase by the same proportion, what is the likely impact on valuation?

Question 9

Which scenario causes inconsistency in valuation models?

Question 10

Which valuation mistake is common in high-growth companies?

Question 11

Which scenario would most likely lead to overvaluation using relative valuation?

Question 12

Which situation creates illusion of undervaluation?

Question 13

If WACC is underestimated, what is the impact?

Question 14

Which factor complicates cross-border valuation?

Question 15

Which of the following best reflects 'value trap'?

Question 16

What is the biggest limitation of valuation models?

Question 17

Which situation leads to highest sensitivity in DCF valuation?

Question 18

Which factor makes EV/EBITDA misleading?

Question 19

If a company increases leverage, what is the complex impact on valuation?

Question 20

Practice Set - 3