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NISM Certifications · NISM-Series-XV: Research Analyst · Introduction to Research Analyst Profession

Which of the following is the main difference between a buy-side analyst and a sell-side analyst?

Buy-side analysts work for investing institutions such as mutual funds, and their research mainly supports internal investment decisions. Sell-side analysts work for brokerages and distribute research to clients. The other descriptions wrongly assign roles to exchanges or regulators or misstate data use.

  1. ABuy-side analysts work for institutions that invest money and their research mainly supports internal investment decisions, while sell-side analysts work for brokerages and distribute research to clientsCorrect
  2. BBuy-side analysts work only for stock exchanges, while sell-side analysts work only for regulators
  3. CBuy-side analysts cannot use financial statements, while sell-side analysts must
  4. DBuy-side analysts publish ratings for the public, while sell-side analysts only advise their own firm

Explanation

Buy-side analysts support the investing decisions of institutions such as mutual funds, and their research is usually for internal use. Sell-side analysts, at brokerages, produce research distributed to clients. The other options misstate the roles.

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