Sample Questions

NCFM Fundamental Analysis Mock Test — 5 random MCQs with answers & explanations

← Back to NCFM Fundamental Analysis Mock Test

These 5 questions are randomly selected (standard MCQs only, not case-based).

Q1 If a company's profit margin gets better but its sales speed (turnover) slows down:

A. The ROE will definitely increase
B. The ROE will definitely decrease
C. You cannot know the effect on ROE without more numbers Correct Answer
D. The ROE will stay the same

Explanation:

These two factors work against each other. The final result on ROE depends on which change was bigger—the improved profit or the slower sales.

Marks: 1

Q2 Identify the item that would normally NOT be found on an Income Statement.

A. Revenue from core sales
B. Interest costs on loans
C. The value of machinery wearing out (Depreciation)
D. The amount of actual cash in the bank register Correct Answer

Explanation:

The Income Statement tracks "events" (like a sale). "Cash on hand" is a "status" fact, which belongs on the Balance Sheet instead.

Marks: 1

Q3 If a portfolio becomes more volatile (higher risk) but profit stays the same, the Sharpe Ratio:

A. Increases
B. Decreases Correct Answer
C. Stays the same
D. Becomes infinite

Explanation:

Since risk (Standard Deviation) is on the bottom of the formula, more risk makes the whole ratio smaller and worse.

Marks: 1

Q4 If a company has a "low current ratio," what is the primary concern?

A. The company is too profitable
B. The company might struggle to pay its bills on time Correct Answer
C. The company is using its assets too efficiently
D. The company has too much cash in the bank

Explanation:

A low ratio (usually below 1) means current liabilities are higher than current assets. This is a warning sign that the company could run out of cash soon.

Marks: 1

Q5 What does "EPS" (Earnings Per Share) tell a small investor?

A. The total revenue of the whole company
B. The amount of cash in the company's bank
C. The amount of profit belonging to each single share they own Correct Answer
D. The total amount of debt per share

Explanation:

EPS is profit divided by the number of shares. It tells you exactly how much "money" your one single share earned during the year.

Marks: 1

Start Mock Tests →

Explore More Mock Tests

Practice structured mock tests designed exactly like real NISM exams.

Browse All Subjects Start Free Test

Sample Questions

Q1 If a company's profit margin gets better but its sales speed (turnover) slows down:

Q2 Identify the item that would normally NOT be found on an Income Statement.

Q3 If a portfolio becomes more volatile (higher risk) but profit stays the same, the Sharpe Ratio:

Q4 If a company has a "low current ratio," what is the primary concern?

Q5 What does "EPS" (Earnings Per Share) tell a small investor?

Explore More Mock Tests

Notify me when you add new Sample Questions

Create a free PassNISM account