Interview questions: finance
1. What is net worth/ net block/ preliminary expenses?
2. How is return on equity calculated? Is it different from cost of equity for the firm? 3. What is PE ratio? What does it indicate?
4. What are the important ratios for investors?
5. Which ratios will you consider for gauging a company’s performance? 6. What is dividend discount model? What are its limitations in valuing a company? 7. Dividend yield / pay out ratio
8. BCR/NPV/ IRR
9. What is bond yield?
10. List the various sources of working capital finance?
11. What is the difference between Primary and secondary market 12. Capital asset pricing model
13. What is beta coefficient?
14. What is MM model for capital structure?
15. Describe Gordon and Brown model for dividend policy
16. List few differences between future and forward contract 17. What are call and put options?
18. What is mark to market settlement?
19. What is hedging / arbitrage?
20. CRR/ SLR/ Bank rate
21. Repo and reverse repo
22. Monetary and fiscal policy
23. Fundamental analysis
24. Sensex and nifty
25. Market capitalization
26. Free float share
27. Book building process
28. Green shoe option
31. Bonus/ split/right issue
32. Open ended and close ended mutual funds
33. Term policy and ULIPs
http://www.investopedia.com/articles/optioninvestor/07/swaps.asp#axzz1eK9BcfDK 36. Blue chip company/ large/medium/small cap
Blue chip stocks are seen as a less volatile investment than owning shares in companies without blue chip status because blue chips have an institutional status in the economy. Investors may buy blue chip companies to provide steady growth in their portfolios. The stock price of a blue chip usually closely follows the S&P 500. Large Company A term used by the investment community to refer to companies with a market capitalization value of more than $10 billion. Large cap is an abbreviation of the term "large market capitalization". Market capitalization is calculated by multiplying the number of a company's shares outstanding by its stock price per share Medium Cap : A company with a market capitalization between $2 and $10 billion, which is calculated by multiplying the number of a company''''s shares outstanding by its stock price. Mid cap is an abbreviation for the term "middle capitalization".
Small Cap : Refers to stocks with a relatively small market capitalization. The definition of small cap can vary among brokerages, but generally it is a company with a market capitalization of between $300 million and $2 billion.
Read more: http://www.investopedia.com/terms/s/small-cap.asp#ixzz1eKYk1YsF
37. Sectoral verses diversified fund
A mutual fund which invests entirely or predominantly in a single sector. Sector funds tend to be riskier and more volatile than the broad market because they are less diversified, although the risk level depends on the specific sector. Some investors choose sector funds when they believe that a specific sector will outperform the overall market, while others choose sector funds to hedge against other holdings in a portfolio. Some common sector funds include financial services funds, gold and precious metals funds, health care funds, and real estate funds, but sector funds exist for just about every sector.
38. Banks asset and liability
39. Forex and treasury
40. Money market instruments
the Money Market is an instrument of the fixed income market. Generally speaking, the term "fixed income" is synonymous with bonds. In reality, a bond is just one type of fixed...
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