Probable Interview Questions

Note: These questions are mostly related to the finance domain job interviews like
Investment analysts, business analysts, and equity analysts.

1. What is the difference between the NPV and IRR?

2. Explain XIRR?

3. What is the difference between PV and FV?

4. What is multiple IRR?

5. What is capital rationing?

6. Difference between non-discounted payback and discounted payback.

7. Difference between IRR and ROI.

8. Difference between capital-intensive and labor-intensive.

9. Difference between bond and debenture.

10. What is a Junk Bond?

11. Difference between the convertible and non-convertible bonds.

12. What is lock-in period?

13. What is amortized bond?

14. What is Angel bond?

15. What do you understand by 'Straights'?

16. What is YTM?

17. Explain the bond valuation procedure.

18. What Is the Yield Curve and Its Significance?

19. Explain yield to call.

20. Difference between the levered beta and unlevered beta.

21. What is cost of retained earnings?

23. Difference between the operating leverage and financial leverage.

23. Explain operating cycle.

24. Explain the effect of operating cycle on working capital.

25. Difference between the gross working capital and net working capital.

26. What is cash budgeting?

27. Difference between the DPS and EPS.

28. Explain the effect of dividend on stock price.

29. Difference between the risk appetite and risk averse.

30. What is risk tolerance?

31. What is credit risk and how is it calculated?

32. What is net worth statement?

33. What type of risk is associated with LIBOR?

34. What does positive alpha values results in?

35. Explain the types of risk associated with stock price and exchange rate.

36. Discuss the effect of exchange rate on economy.

37. Explain the mechanisms of exchange rate.

38. Discuss the relationship among exchange rate, oil price and stock market.

39. What is CAPM?

40. Define Fama-French model.

41. Tell us a bit about investment analyst reports of equity research?

42. What are key factors financial analysts should consider when evaluating prospective
investments?

43. How do increasing accounts receivables impact the company’s balance sheet?

44. Please tell us about the characteristics of a successful research analyst?

45. What does solvency implies?

46. What is indicated if, in last year the current ratio was 3:1 and quick ratio was 2:1.Presently
current ratio is 3:1 but quick ratio is 1:1.

47. What is the purpose of equity research?

48. Blue chips are issued by which type of companies?

49. How do you value a stock?

50. What does Efficient Market Hypothesis states?

51. What does Doji represents?

52. Using the moving averages, when will a trader buy or sell?

53. Give some examples of charting software.

54. When should a company buy back stock?

55. When should a company issue stock rather than debt to fund its operations?

56. Why would an investor buy preferred stock?

57. Why did the stock price of XYZ company decrease yesterday when it announced increased
quarterly earnings?

58. Can you tell me about a recent IPO that you have followed?

59. What is insider trading and why is it illegal?

60. Who is a more senior creditor, a bondholder or stockholder?

61. Explain the types of debt market.

62. Difference between systematic and unsystematic risk.

63. Explain DOW’s theory.

64. What does defensive trading means?

65. What is the difference between intrinsic and extrinsic value?

66. What is the right time for selling one’s existing shares?

67. What do you understand by capital market line?

68. What is short sell in equity trading?

69. Explain what is capital loss?

70. Explain the term double bottom?

71. What is bridge equity?

72. What is Net Asset Value (NAV)?

73. What is global depository receipt?

74. Difference between the FDI and FII.

75. Explain Participatory notes (PNs).

76. Why is FDI so sensitive?

77. Does FDI work?

78. What Is Growth Investing?

79. What Is Value Investing?

80. What Is Hedging?

81. Difference between the hedge fund and private equity fund.

82. What Is Passive Investing?

83. Difference between the open-end fund and close-end fund.

84. How Are Mutual Funds Classified?

85. What Are The Different Plans That Mutual Funds Offer?

86. How Does One Calculate The Expense Ratio For A Fund?

87. What Is an Ex-dividend Date?

88. What Is Load in mutual fund?

89. What Is an Asset Management Company (amc)?

90. What Is A Daily Dividend Fund?

91. What Is An Asset Management Fee?

92. Who manages the deliveries and receipt of units of a mutual fund?

93. What is the monetary policy?

94. What is Money laundering?

95. What is the difference between Commercial and Investment Banking?

96. What is a deferred tax asset?

97. What is the main difference between cash-based and accrual accounting?

98. When should a company issue equity, rather than debt, to fund its operations?

99. Difference between a Dividend or Growth Plan?

100. What is SIP?

101. Difference between mutual fund and ETF.