n NISM Certifications
XV NISM Series XV
Medium

Which statement correctly describes a limitation of the quantitative approach to fundamental analysis?

Practice question from NISM XV Mock Test 3 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Investing is an intuitive art with very limited scope for quantitative analysis

  2. B

    Quantitative approach cannot be used to analyse economy

  3. Changes in accounting standards, business structures, and regulations limit the effectiveness of quantitative analysis in forecasting future

    Correct answer

  4. D

    None of the above

Why this is the answer

Quantitative analysis uses financial and operational metrics. Its effectiveness is limited due to changes in accounting standards, business models, and regulations, making historical data less reliable for forecasting.

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