10+ Suntel Global Interview Questions and Answers

Structured finance involves creating complex financial instruments by pooling assets and selling them to investors.

• Structured finance is a way to create customized financial products by pooling assets like mortgages, loans, or bonds.

• These assets are then divided into tranches with different levels of risk and return, and sold to investors.

• Parties involved in structured finance include originators, underwriters, rating agencies, investors, and servicers.

• Examples of structured ...read more

CLO stands for Collateralized Loan Obligation. It is a type of structured asset-backed security.

• CLOs are created by pooling together a group of loans, usually corporate loans or bonds.

• The loans are then divided into different tranches based on their level of risk and return.

• Investors can buy into different tranches based on their risk appetite and investment goals.

• Day to day activities involve monitoring the performance of the underlying loans, managing cash flows, and making...read more

Special purpose vehicles (SPVs) are entities created to isolate financial risk and facilitate complex financial transactions.

• SPVs are commonly used in structured finance to securitize assets such as mortgages, auto loans, and credit card debt.

• They are designed to protect investors by separating the assets and liabilities of the SPV from those of the parent company.

• SPVs can issue bonds or other securities backed by the assets they hold, allowing investors to invest in a divers...read more

Hedge funds and mutual funds are investment vehicles that pool money from multiple investors to invest in various assets.

• Hedge funds are typically only available to accredited investors and use more complex investment strategies, such as short selling and derivatives, to potentially generate higher returns.

• Mutual funds are open to all investors and typically invest in a diversified portfolio of stocks, bonds, and other assets.

• Both hedge funds and mutual funds charge fees for ...read more

DFC is a valuation method that estimates the intrinsic value of a stock based on future cash flows. Dividend discount model values a stock based on its future dividend payments.

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

• Dividend discount model values a stock based on the present value of its future dividend payments

• Both methods are used to determine the intrinsic value of a stock

• DFC is more commonly used for companies that do not...read more

Bond prices and yields have an inverse relationship.

• When bond prices go up, yields go down and vice versa.

• This is because the yield is the return an investor receives on their investment, while the bond price is the amount they pay for the bond.

• For example, if a bond has a face value of $1000 and a yield of 5%, the investor would receive $50 per year in interest. If the bond price goes up to $1100, the yield would decrease to 4.55% ($50/$1100).

• Conversely, if the bond price go...read more

Bond price is calculated based on the present value of future cash flows.

• Bond price is affected by interest rates, credit rating, and time to maturity.

• The present value of future cash flows is calculated using a discount rate.

• Bond prices move inversely to interest rates.

• For example, if a bond has a face value of $1000, a coupon rate of 5%, and a maturity of 10 years, the bond price would be calculated as the present value of the future cash flows, which would be discounted us...read more

Collateralized loan obligation (CLO) is a type of structured asset-backed security. As a Senior Analyst, my day-to-day activities would involve analyzing and monitoring the performance of CLOs.

• Analyze and monitor the performance of CLOs

• Assess the creditworthiness of the underlying loans

• Evaluate the risk associated with the CLOs

• Create financial models to project cash flows

• Prepare reports and presentations for clients and senior management

Embedded options are features in financial instruments that allow the holder to take certain actions at specific times.

• Embedded options are commonly found in bonds, mortgages, and other debt instruments.

• They can include call options, put options, and convertible options.

• Call options allow the holder to buy the underlying asset at a specific price, while put options allow the holder to sell the underlying asset at a specific price.

• Convertible options allow the holder to conver...read more

Trade life cycle refers to the stages involved in a trade from initiation to settlement.

• Trade initiation - Trade is proposed and agreed upon by parties involved.

• Trade execution - Trade is executed on the agreed terms.

• Trade confirmation - Confirmation of trade details by both parties.

• Trade settlement - Actual exchange of securities and funds.

• Post-trade activities - Reconciliation, reporting, and risk management.

Types of corporate actions include dividends, mergers, acquisitions, stock splits, and spin-offs.

• Dividends: Payments made by a corporation to its shareholders

• Mergers: Combination of two companies to form a new entity

• Acquisitions: One company purchasing another company

• Stock Splits: Division of existing shares into multiple shares

• Spin-offs: Creation of a new independent company through the sale or distribution of existing assets

Golden Rules of accounting are basic principles that guide the process of recording financial transactions.

• There are three Golden Rules of accounting: Debit what comes in, Credit what goes out; Debit the receiver, Credit the giver; Debit expenses and losses, Credit income and gains.

• These rules help ensure that financial transactions are accurately recorded and classified.

• For example, when a company receives cash from a customer, the cash account is debited (increased) and the...read more