Economic Analysis
7 questions. Each answer is explained.
Question 1 of 7Practice · Series XV — Research Analyst
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Learn these topics
More units in NISM Series XV
- Introduction to Research Analyst Profession2
- Introduction to Securities Market3
- Terminology in Equity and Debt Markets3
- Fundamentals of Research7
- Industry Analysis12
- Company Analysis – Business and Governance9
- Company Analysis – Financial Analysis16
- Corporate Actions7
- Valuation Principles13
- Fundamental analysis of commodities9
- Fundamentals of Risk and Return10
- Qualities of a Good Research Report7
- Legal and Regulatory Environment15
- Technical Analysis22
- Case Study - Valuation8
Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 60% · 60 of 100 marks |
| Negative marking | 25% · 0.25 marks off per wrong answer |
| Certificate validity | 3 years · from the date of the examination |
| Marks for this unit | Not published by NISM |
NISM Series XV Research Analyst
Exam rules read on NISM's site on 3 October 2026. Exam pattern revised on 20 January 2026. Check the current rules on NISM's site (opens in a new tab)
What these answers assume, and when it was last checked
Each question uses the rules listed below. We last checked them on 5 September 2026. A Budget or SEBI circular can change a rate, lot size or expiry day. If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.
- NSE uses Tuesday expiry and BSE uses Thursday expiry. This applies from 1 September 2025.
- The January 2026 index lot sizes are NIFTY 65, BANKNIFTY 30, FINNIFTY 60, MIDCPNIFTY 120 and NIFTYNXT50 25.
- The October 2024 SEBI framework sets a minimum index contract value of Rs 15–20 lakh. Each exchange may list one weekly benchmark index.
- Option buyers pay the premium upfront from 1 February 2025. A short index option has an extra 2% Extreme Loss Margin on expiry day from 20 November 2024.
- Equity short-term capital gains are taxed at 20%. Long-term gains are taxed at 12.5% above Rs 1.25 lakh. Both rates apply from 23 July 2024.
- F&O income is non-speculative business income in ITR-3. NSE equity derivatives trade from 9:15 a.m. to 3:40 p.m.
- The final ten-minute session began on 3 August 2026. It aligns with the cash market Closing Auction Session.
- Most Securities Transaction Tax questions test the base and who pays. On an option sale, it is the premium and the seller pays. On a futures sale, it is the traded value and the seller pays.
- On exercise, Securities Transaction Tax uses intrinsic value: settlement price minus strike price. The buyer pays it.
- Two questions test the current rate. From 1 April 2026, option sales carry 0.15% on the premium and futures sales carry 0.05% on traded price. The earlier rates were 0.10% and 0.02% from 1 October 2024.
- This section uses the T+1 rolling settlement cycle. Obligations are fixed on T+1. A short delivery goes to buy-in auction on T+1 and settles on T+2.
- The trade-for-trade surveillance segment uses direct close-out. Funds pay in by 10:30 a.m. and pay out on or after 1:30 p.m. on settlement day.
- Securities pay in to the settlement pool by 10:30 a.m. They pay out directly to the client’s demat account by 3:30 p.m.
- The 3:30 p.m. deadline replaced 1:30 p.m. under SEBI’s 10 October 2024 circular. Direct client credit was required by SEBI’s 5 June 2024 circular.
- The optional T+0 cycle trades until 1:30 p.m. Obligations are fixed by 2:30 p.m. on the trade day. An early pay-in shortage is closed out directly.
- Cash-market Value at Risk margin is six times exponentially weighted moving-average volatility. It has a 9% floor for Group I, a 21.5% floor for Group II, and a fixed 50% or 75% level for Group III.
- Extreme Loss Margin is 3.5% for a share and 2% for a broad-market-index exchange traded fund. Mark-to-market margin is collected before the next day’s trading. The trade-for-trade segment has 100% upfront margin.
- Close-out uses the higher of the highest price from trade day to auction day and 20% above the auction day’s official close.
- A funds shortage costs 0.07% a day. The trading facility is withdrawn at a shortage of Rs 5 lakh or more.
- SCORES allows 21 calendar days, then two 15-day review levels. Online Dispute Resolution moves from conciliation to arbitration after the market participant and SCORES steps.
- At NSE, the Investor Protection Fund limit is Rs 35 lakh per investor for each defaulting or expelled member. This applies to claims arising after 13 August 2024.
- A Basic Services Demat Account has no annual maintenance charge up to Rs 4 lakh of holdings. It costs up to Rs 100 above that, until the Rs 10 lakh eligibility ceiling. These slabs apply from 1 September 2024.
- The rupee pairs are USD-INR, EUR-INR, GBP-INR and JPY-INR. The cross-currency pairs are EUR-USD, GBP-USD and USD-JPY.
- Each contract covers 1,000 units of the foreign currency, except JPY-INR. JPY-INR covers 100,000 yen and is quoted in rupees per 100 yen.
- The tick is 0.25 paise, or Rs 0.0025. It equals Rs 2.50 a contract.
- Rupee pairs trade from 9:00 a.m. to 5:00 p.m. A monthly contract stops trading at 12:30 p.m. two working days before the expiry month’s last business day.
- Final settlement is in cash at the FBIL reference rate on expiry day. FBIL, Financial Benchmarks India, has published this rate in place of the Reserve Bank since 2018. Premium-style European options are quoted in rupees. The buyer pays the premium in cash on T+1.
- Daily settlement is on T+1 and final settlement is on T+2.
- NSE Clearing circular 026/2020 sets SPAN margin plus Extreme Loss Margin. The futures margin is 0.50% for USD-INR, 0.15% for EUR-INR, 0.25% for GBP-INR and 0.35% for JPY-INR. A short option has 0.75%. These figures apply from 1 June 2020.
- A USD-INR client may hold 6% of total open interest or USD 20 million, whichever is higher. A trading member may hold 15% or USD 100 million.
- A resident user has one USD 100 million equivalent limit across all rupee pairs and exchanges. No document is needed below that limit, but a valid underlying contracted exposure must still exist. This clarification applies from 3 May 2024.
- The currency segment has no Securities Transaction Tax.
The exam figures (questions, time, pass mark, negative marking and certificate validity) come from NISM's own pages, read on 3 October 2026. Timed practice uses the same figures. Study with the official workbook as well.
The written-out answers on this page are hidden while your timed set runs.
All 7 questions on Economic Analysis, with answers
Q1If policy interest rates rise materially and the change is transmitted through the financial system, which effect is generally most plausible, other things equal?
Option A. Borrowing costs tend to fall and interest-sensitive demand accelerates
Why it is wrong: It reverses the usual direction of transmission.
Option B. All companies' profits must increase immediately
Why it is wrong: Company-level effects differ and are not immediate or uniformly positive.
Option C. Equity discount rates must fall
Why it is wrong: Higher risk-free rates generally put upward, not downward, pressure on discount rates.
Option D. Borrowing costs tend to rise and interest-sensitive demand may moderate — Correct answer
Answer: D. Higher policy rates, when transmitted, generally raise borrowing and discount rates and can moderate interest-sensitive consumption and investment. The effect varies across sectors and is not mechanical for every company. Remember: Analyse both the direction of policy transmission and the sectors most sensitive to financing costs.
Hint, shown before you answer in practice mode: Common mistake: Treating a macroeconomic relationship as an automatic outcome for every company.
XV-019mediumconceptual
Q2In Indian monetary policy, the policy repo rate is best described as the rate associated with:
Option A. RBI lending money to banks against eligible collateral — Correct answer
Option B. Companies issuing new equity shares to the public in an IPO
Why it is wrong: Equity issuance is a capital-market activity.
Option C. Banks paying interest to customers on ordinary savings accounts
Why it is wrong: Savings-deposit rates are set by banks subject to the applicable framework, not defined as the repo rate.
Option D. The government calculating the corporate income tax due
Why it is wrong: Corporate tax is a fiscal matter.
Answer: A. The repo rate is a policy interest rate used in RBI liquidity operations in which eligible securities are sold with an agreement to repurchase them. It is a key monetary-policy signal and operating reference. Remember: Distinguish monetary-policy rates from market, deposit and tax rates.
Hint, shown before you answer in practice mode: Common mistake: Remembering only 'RBI lends to banks' without understanding the repo transaction structure.
XV-033easyconceptual
Q3Under India's flexible inflation-targeting framework, the inflation target is specified in terms of which price index?
Option A. Nifty 50 index
Why it is wrong: Nifty 50 is an equity-market index.
Option B. Consumer Price Index (CPI) — Correct answer
Option C. Index of Industrial Production (IIP)
Why it is wrong: IIP measures industrial output, not consumer-price inflation.
Option D. BSE market capitalisation index
Why it is wrong: Market capitalisation is not an inflation index.
Answer: B. The statutory flexible inflation-targeting framework specifies the inflation target in terms of the Consumer Price Index (CPI). Remember: Keep price-level indicators distinct from output and securities-market indicators.
Hint, shown before you answer in practice mode: Common mistake: Confusing CPI with WPI or with an activity indicator such as IIP.
XV-034mediumconceptual
Q4If the government's fiscal deficit widens substantially and is financed by additional market borrowing, which effect is plausible, other things equal?
Option A. Downward pressure on the supply of government securities available to investors
Why it is wrong: More borrowing generally means more, not less, debt supply.
Option B. Automatic appreciation of every listed company's share price as government spending rises
Why it is wrong: Equity prices do not automatically rise because the fiscal deficit widens.
Option C. Upward pressure on government bond yields if the market must absorb more borrowing — Correct answer
Option D. Complete elimination of private-sector borrowing from banks and the bond market
Why it is wrong: Private borrowing is not mechanically eliminated.
Answer: C. Additional market borrowing increases the amount of government debt that investors must absorb. Other things equal, that can place upward pressure on yields and potentially affect financing conditions. The actual outcome also depends on liquidity, monetary policy, demand for bonds and growth/inflation expectations. Remember: Fiscal analysis requires tracing how government borrowing can affect interest rates, liquidity and private financing.
Hint, shown before you answer in practice mode: Common mistake: Treating an 'other things equal' macro relationship as a guaranteed market outcome.
XV-035mediumconceptual
Q5The rupee depreciates materially against the US dollar. Which company is most likely to receive a direct translation/operating benefit, other things equal?
Option A. A domestic borrower whose entire debt is unhedged in US dollars and whose revenue is all in rupees
Why it is wrong: Unhedged dollar debt becomes more expensive in rupee terms.
Option B. An importer that pays for nearly all of its inputs in US dollars and sells its output entirely in rupees
Why it is wrong: Dollar-denominated imports become more expensive in rupee terms.
Option C. A company that operates only within India and has no foreign-currency revenues, costs, assets or liabilities
Why it is wrong: With no currency exposure, the direct translation effect is limited.
Option D. An exporter that earns most revenue in US dollars, with most operating costs in rupees and limited hedging — Correct answer
Answer: D. A rupee depreciation increases the rupee value of dollar revenue for an exporter whose costs are mainly rupee-denominated, assuming limited hedging and unchanged volumes/pricing. Importers and unhedged foreign-currency borrowers can face the opposite effect. Remember: Exchange-rate exposure depends on the currency mix of revenue, costs, assets, liabilities and hedges.
Hint, shown before you answer in practice mode: Common mistake: Saying 'exporters benefit' without checking imported inputs, hedging and pricing.
XV-036mediumconceptual
Q6A retailer experiences a recurring surge in sales around the same festival period each year. This pattern is best classified as:
Option A. A seasonal trend — Correct answer
Option B. A secular trend
Why it is wrong: A secular trend is a long-term structural direction rather than a recurring annual pattern.
Option C. A structural default
Why it is wrong: Default is a credit event, not an economic trend classification.
Option D. A one-time corporate action
Why it is wrong: The pattern recurs and is not a one-time corporate action.
Answer: A. A seasonal trend is a recurring pattern associated with calendar, weather, festival or other periodic effects. A secular trend is long term, while a cyclical trend is linked to broader economic or industry cycles. Remember: Distinguish periodic seasonality from multi-year cycles and long-run secular change.
Hint, shown before you answer in practice mode: Common mistake: Calling any repeated growth pattern a secular trend.
XV-075mediumconceptual
Q7A foreign automobile company establishes a manufacturing subsidiary in India and invests in a new factory that it controls. This is most appropriately classified as:
Option A. Foreign portfolio investment
Why it is wrong: Portfolio investment generally involves financial investment without the same operating control.
Option B. Foreign direct investment — Correct answer
Option C. A domestic rights issue
Why it is wrong: A rights issue is an equity issue to existing shareholders.
Option D. A monetary-policy operation
Why it is wrong: This is not a central-bank liquidity operation.
Answer: B. Foreign direct investment generally involves a lasting interest and meaningful influence or control in a business, such as establishing or acquiring an operating enterprise. Remember: Distinguish direct investment in an operating enterprise from portfolio flows into financial securities.
Hint, shown before you answer in practice mode: Common mistake: Classifying every cross-border investment as FPI.
XV-104easyconceptual
Economic Analysis: common questions
How many practice questions are there on Economic Analysis?
7 questions, all written out on this page with the correct answer and why each other option is wrong. This unit is one of the 16 practice topics for NISM Series XV, which has 150 questions in total.
Are these real NISM Series XV questions on Economic Analysis?
No. LearnNifty wrote every question from NISM's public syllabus. NISM does not publish its question bank, so nobody can offer you the real paper. Use these questions to check that an idea has gone in. Use the official NISM workbook to see what is examined.
Does negative marking apply to NISM Series XV?
Yes. NISM takes off 25% of a question's marks for a wrong answer. On a 1-mark question that is 0.25 marks off. A blank question earns nothing and loses nothing, so a wrong guess costs marks on this paper. Timed practice here uses the same rule.
Are these practice questions kept up to date?
Each question is written against the rules printed on this page, last checked on 5 September 2026. A Budget or a SEBI circular can change a rate, a lot size or an expiry day. If one of those rules changes before your exam, treat the questions that use it as out of date. Then check NISM's current workbook.
Industry Analysis
12 questions on Industry Analysis. Its quiz opens on that unit.
Open Industry Analysis