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Free Series 86/87 – Research Analyst Exam Exam Questions and Answers
Last updated: March 29, 2025
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Series 86/87 – Research Analyst Exam
#Question
If a company's loyal customer base expands rapidly, what impact might this have on marketing costs?
A.
Stable costs
B.
Decreased costs
C.
No impact
D.
Increased costs
Correct Answer:
B
Expanding a loyal customer base can lead to reduced marketing costs over time, as retaining existing customers is typically less expensive than acquiring new ones.
#Question
If a firm announces that it is shifting towards a subscription-based revenue model, what should analysts consider?
A.
Immediate cash flow boost
B.
Increased risk of churn
C.
Increased sales volatility
D.
Stable recurring revenue
Correct Answer:
D
Transitioning to a subscription model often provides more stable recurring revenues, which can enhance financial predictability and cash flow consistency.
#Question
What could a sudden rise in volatility in the bond market indicate about investor sentiment?
A.
Stable pricing
B.
Strong economic conditions
C.
Heightened uncertainty
D.
Increased confidence
Correct Answer:
C
A spike in bond market volatility often signals increased uncertainty surrounding interest rates and economic outlook, affecting investor sentiment.
#Question
If a technology company decides to prioritize short-term profits over long-term growth, what risk might this pose?
A.
Declining innovation
B.
Strong operational health
C.
Increased shareholder value
D.
Reduced market competitiveness
Correct Answer:
A
Focusing on short-term profits at the expense of long-term growth often leads to reduced innovation, hampering competitiveness and future sustainability.
#Question
When conducting a financial analysis, what aspect is important to consider for understanding capital structure?
A.
Cash flow patterns
B.
Cost of capital
C.
External funding sources
D.
Economic cycles
Correct Answer:
B
Understanding the cost of capital is vital to capitalize structure analysis as it determines the expenses a company incurs to finance its operations.
#Question
What could a consistent decrease in inventory turnover rate indicate?
A.
Market expansion
B.
Increased sales velocity
C.
Strong demand
D.
Potential overstocking
Correct Answer:
D
A declining inventory turnover rate may suggest overstocking or declining sales, which can raise concerns about inventory management.
#Question
If a company sees a rise in churn rate, what adjustment might analysts recommend?
A.
Increase marketing spend
B.
Reduce product offerings
C.
Cut costs
D.
Raise prices
Correct Answer:
A
A rise in churn rate typically necessitates increased marketing efforts to boost customer retention and address the underlying causes.
Series 86/87 – Research Analyst Exam
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