NISM Certifications · NISM-Series-XV: Research Analyst · Fundamentals of Research
A research analyst compares the P/E ratio of an Indian cement company with the average P/E of other listed cement companies. This is an example of which research technique?
This is cross-sectional analysis, because the company is compared with its industry peers at a single point in time. Time-series analysis would instead compare the same company's ratio over several periods, which is not what the analyst is doing.
- ACross-sectional analysisCorrect
- BTime-series analysis
- CTrend extrapolation
- DSensitivity analysis
Explanation
Cross-sectional analysis compares a company with its peers at one point in time. Time-series analysis would compare the same company's P/E across different years. Sensitivity analysis varies inputs to a model, which is not done here.
Did you get it right without looking?
One question tells you little. A timed set on Fundamentals of Research shows your real accuracy, how long you take and where you lose marks.
More Fundamentals of Research questions
- A research analyst compares the reported net profit of Company A with the average of the same item for 10 listed peers to judge relative per…
- An analyst studies the revenue of an Indian firm using 12 consecutive quarterly values and calculates the average of the most recent 4 quart…
- Over four years, a company's revenue grew from Rs 100 crore to Rs 146.41 crore, growing by the same percentage every year. An analyst comput…
- Monthly returns of a stock (in %) over five months are 2, 4, 6, 8 and 10. Treating these as the entire population, what is the standard devi…
- An analyst notes that a sample of 5 monthly returns for an Indian equity fund is 2%, 4%, 6%, 8% and 10%. What is the sample standard deviati…
- Which of the following is the main limitation of relying on a single-point estimate in a research forecast, which scenario analysis tries to…