Apex Group Private Equity Associate Interview Questions and Answers

A journal entry for a buy transaction involves debiting the asset account and crediting the cash account.

• Debit the asset account for the cost of the purchase

• Credit the cash account for the amount paid

• If the purchase was made on credit, credit the accounts payable account instead of cash

• Example: Debit Equipment for $10,000 and credit Cash for $10,000

Incentive fees are calculated based on a percentage of the profits earned by the investment manager.

• Incentive fees are typically calculated as a percentage of the profits earned by the investment manager

• The percentage charged can vary depending on the terms of the agreement between the investment manager and the client

• For example, if the investment manager earns a profit of $100,000 and the agreed-upon incentive fee is...read more

The capital market is a financial market where individuals and institutions trade financial securities.

• It facilitates the buying and selling of stocks, bonds, and other long-term investments.

• It provides a platform for companies to raise capital by issuing stocks or bonds.

• Investors can earn returns through capital appreciation or dividends.

• Examples of capital market institutions include stock exchanges, investment banks

Time decay in options and derivatives refers to the decrease in the value of an option as it approaches its expiration date.

• Time decay is also known as theta decay, as it is represented by the Greek letter theta in options pricing models.

• Options lose value over time due to the diminishing likelihood of the option being profitable for the holder.

• Time decay accelerates as the expiration date approaches, especially for op...read more