Recruitment/Research Analyst Question: Download Questions PDF
What is the purpose of equity research?
Answer:
The purpose of equity research is to study companies, analyze financials and look at quantitative and qualitative aspects, helping investors of varying degrees to make an informed decision.
As the name suggests, 'research' plays the most important role here.
Over the years, research methods have changed but the sole intention of research remains the same.
The number of investors is booming and so is the need for exploring the nature of investments.
Investors wish to take calculated and informed decisions, and this is where the role of equity research begins.
The purpose of equity research and the researcher is manifold.
To begin with, one gathers and analyses industry data and financial models of a specific company or an industry.
It also involves understanding current market trends, both from the perspectives of macro economy and micro economy, and report findings. Since the equity research targets a specific audience, it is necessary to tailor the findings to the audience demand.
Further, adequate stress is laid on the accuracy of information. If investors take actions based on any kind of misinformation or misrepresentation, losses are tremendous and harmful to both the investor and the company. Therefore, equity analysts spend a considerable amount of time analyzing stocks and valuating estimates.
As the name suggests, 'research' plays the most important role here.
Over the years, research methods have changed but the sole intention of research remains the same.
The number of investors is booming and so is the need for exploring the nature of investments.
Investors wish to take calculated and informed decisions, and this is where the role of equity research begins.
The purpose of equity research and the researcher is manifold.
To begin with, one gathers and analyses industry data and financial models of a specific company or an industry.
It also involves understanding current market trends, both from the perspectives of macro economy and micro economy, and report findings. Since the equity research targets a specific audience, it is necessary to tailor the findings to the audience demand.
Further, adequate stress is laid on the accuracy of information. If investors take actions based on any kind of misinformation or misrepresentation, losses are tremendous and harmful to both the investor and the company. Therefore, equity analysts spend a considerable amount of time analyzing stocks and valuating estimates.
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