Acuity Knowledge Partners Equity Research Analyst Interview Questions, Process, and Tips

Q1. What is financial modeling? What is enterprise value? Name some of the Valuation methods ?
Ans. 
Financial modeling is the process of creating a mathematical representation of a company's financial situation.
• Financial modeling involves using historical data and assumptions to forecast future financial performance.

• It helps in analyzing the impact of various factors on a company's financials.

• Financial models are used for budgeting, forecasting, valuation, and decision-making.

• Enterprise value is a measure of a compan...read more
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Q2. Definitions, formula etc
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Q1. What do you understand by Beta
Ans. 
Beta is a measure of a stock's volatility in relation to the market.
• Beta measures the sensitivity of a stock's returns to changes in the market.

• A beta of 1 indicates that the stock's price will move with the market.

• A beta greater than 1 indicates the stock is more volatile than the market.

• A beta less than 1 indicates the stock is less volatile than the market.

• Beta is used in the Capital Asset Pricing Model (CAPM) to ca
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Finanical modelling to be done slected companies or sectors

Q1. Describe dcf valuation models in financial modelling process.
Ans. 
DCF valuation models are used to estimate the intrinsic value of a company based on its future cash flows.
• DCF stands for Discounted Cash Flow

• It involves projecting future cash flows and discounting them back to their present value

• The discount rate used is typically the company's cost of capital

• The resulting present value is the estimated intrinsic value of the company

• DCF models are commonly used in equity research to d...read more
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Q2. What do mean by beta and how to calculate it.
Ans. 
Beta is a measure of a stock's volatility in relation to the market. It indicates the stock's sensitivity to market movements.
• Beta is calculated by comparing the stock's returns to the market returns over a period of time.

• A beta of 1 indicates that the stock's price moves in line with the market.

• A beta greater than 1 indicates that the stock is more volatile than the market.

• A beta less than 1 indicates that the stock i...read more
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Q1. Why do you want this role
Ans. 
I am passionate about analyzing financial markets and helping investors make informed decisions.
• I have a strong interest in finance and enjoy analyzing financial data

• I have a knack for identifying investment opportunities and predicting market trends

• I enjoy the challenge of conducting in-depth research and providing valuable insights to clients

• I want to contribute to the success of a reputable equity research team

• I am ...read more
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Q2. GDP and GNP difference
Ans. 
GDP measures the value of goods and services produced within a country, while GNP measures the value produced by a country's residents, regardless of location.
• GDP only includes production within a country's borders, while GNP includes production by a country's citizens regardless of location.

• GDP is used to measure a country's economic output, while GNP is used to measure a country's economic strength.

• For example, if a ...read more
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