Arcesium Analyst Interview Questions and Answers

General aptititude including finance questions , mathematics

Q1. General finance and accounting related questions
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Q1. Same as round 2
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It was a finance test topics covered were bonds corp finance derivatives etc it was on hackerrank

Q1. How is bond prices related to interest rates
Ans. 
Bond prices and interest rates have an inverse relationship.
• When interest rates rise, bond prices fall.

• When interest rates fall, bond prices rise.

• This is because existing bonds with lower interest rates become less attractive compared to new bonds with higher rates.

• Investors demand a discount on existing bonds to match the higher rates available on new bonds.
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Q2. Explain option greeks
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Option Greeks are a set of risk measures used in options trading to assess the sensitivity of an option's price to changes in various factors.
• Option Greeks include Delta, Gamma, Theta, Vega, and Rho.

• Delta measures the change in the option price relative to the change in the underlying asset price.

• Gamma measures the rate of change of Delta.

• Theta measures the change in the option price over time.

• Vega measures the change ...read more
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Q1. Related to financial markets, money markets, derivatives, technical tools.
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Q2. Reconciliation related topics,
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It was relatively easy compared to other rounds

Q1. A discussion around my present role and how I will fit for their role...
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Q2. Financial derivatives, hedge funds, bonds.
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Q1. Discussion around the present round and situation based questions
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Q2. Financial derivatives, bonds and hedge funds.
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Q1. Why a jump from sales role....
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Q1. What is credit back securities
Ans. 
Credit-backed securities are financial instruments backed by a pool of credit assets, providing investors with income from these assets.
• Asset-Backed Securities (ABS): These are securities backed by a pool of loans or receivables, such as auto loans or credit card debt.

• Mortgage-Backed Securities (MBS): A type of ABS specifically backed by mortgage loans, providing cash flow from mortgage payments.

• Risk Diversification: I...read more
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Q2. What is meant by swaption
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A swaption is an option granting the right to enter into an interest rate swap agreement at a future date.
• Types of Swaptions: There are two main types - payer swaptions (right to pay fixed rate) and receiver swaptions (right to receive fixed rate).

• Usage: Companies use swaptions to hedge against interest rate fluctuations, allowing them to lock in rates for future borrowing.

• Example: A company expecting to borrow in the ...read more
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Q1. Clean price dirty price
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Q2. What is span margins
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