20+ Gems Education Interview Questions and Answers

Using the given numbers, estimate the total number of runners in a marathon.

• The numbers given are likely bib numbers assigned to runners.

• Look for patterns or gaps in the numbers to estimate the total number of runners.

• Consider the size of the event and typical number of participants in marathons.

• Assuming no duplicates, the highest number gives a rough upper bound on the total number of runners.

Indian IT sector has a positive outlook with growth drivers like digital transformation and cloud adoption, but faces challenges like talent shortage and increasing competition.

• Growth drivers include digital transformation, cloud adoption, and increasing demand for automation and AI solutions.

• Challenges include talent shortage, increasing competition from global players, and regulatory changes.

• Stock picks include TCS, Infosys, and Wipro, which have strong financials and a tra...read more

The shortest path between two diagonally opposite corners of a solid (10X10X10) cube is the space diagonal.

• The space diagonal can be calculated using the Pythagorean theorem.

• The formula for the space diagonal is √(a² + b² + c²), where a, b, and c are the lengths of the sides of the cube.

• In this case, a = b = c = 10, so the space diagonal is √(10² + 10² + 10²) = √300 ≈ 17.32 units.

Valued Suzlon using DCF and ratios. Assumed growth rates based on industry trends and company performance.

• Used DCF to estimate the intrinsic value of Suzlon based on future cash flows

• Used P/E ratio and EV/EBITDA ratio to compare Suzlon's valuation with industry peers

• Assumed growth rates based on industry trends and Suzlon's historical performance

• Took into account Suzlon's debt levels and interest expenses in the DCF calculation

• Adjusted the discount rate based on Suzlon's risk...read more

A dividend payout by a 50% JV affects the parent company's financial statements through the equity method.

• The parent company will record its share of the JV's dividend income as a decrease in the investment account on the balance sheet.

• The parent company's income statement will reflect its share of the JV's earnings, including the dividend income.

• The parent company's cash flow statement will show an increase in cash from the dividend received.

• The dividend payout may also impa...read more

Delta is the measure of an option's price sensitivity to changes in the price of the underlying asset.

• Delta is a Greek letter used to represent the degree of change in an option's price relative to the change in the price of the underlying asset.

• Delta ranges from 0 to 1 for call options and -1 to 0 for put options.

• A delta of 0.5 means that for every $1 increase in the underlying asset's price, the option's price will increase by $0.50.

• For a future on 1000 stocks, the delta wo...read more

Depreciation is the decrease in value of tangible assets over time, while amortization is the decrease in value of intangible assets over time. Derivatives are financial instruments that derive their value from an underlying asset.

• Depreciation applies to tangible assets like buildings, machinery, and vehicles, while amortization applies to intangible assets like patents, copyrights, and trademarks.

• Depreciation and amortization are both methods of allocating the cost of an ass...read more

A new litigation liability can negatively impact the enterprise value.

• Litigation liability can lead to financial losses for the company

• It can also damage the company's reputation and affect future earnings

• The impact on enterprise value depends on the severity of the liability and the company's ability to manage it

• Investors may also perceive the company as riskier, leading to a decrease in stock price

• Examples include lawsuits related to product defects, environmental damage, o...read more

Ratios like gross margin, inventory turnover, and return on assets are used to evaluate a manufacturing unit.

• Gross margin ratio measures the profitability of the manufacturing unit by comparing the revenue and cost of goods sold.

• Inventory turnover ratio measures how efficiently the manufacturing unit is managing its inventory.

• Return on assets ratio measures how effectively the manufacturing unit is using its assets to generate profits.

• Other ratios like debt-to-equity ratio, c...read more

Prepaid expenses are written in the assets side because they represent future economic benefits.

• Prepaid expenses are expenses that have been paid in advance but have not yet been incurred.

• They represent future economic benefits that the company will receive.

• As per the accounting equation, assets = liabilities + equity, prepaid expenses are recorded as assets.

• They are gradually expensed over time as they are incurred.

Yes, I am following the euro zone crisis closely.

• The crisis began in 2009 with Greece's debt crisis and has since spread to other countries in the euro zone.

• The European Central Bank has implemented various measures to address the crisis, including quantitative easing and low interest rates.

• Brexit has also added to the uncertainty in the euro zone.

• Recent updates include the approval of a €750 billion recovery fund to help member states recover from the COVID-19 pandemic.

• There...read more

To ensure drawing same color, minimum number of draws is max(n1, n2, ...)

• Calculate the maximum number of shoes of a single color

• Draw that many shoes to ensure at least one color is repeated

• Example: Box has 3 red, 4 blue, 2 green shoes. Minimum draws = 4 (to get 2 blue shoes)

• Formula: Min draws = ceil(2/(1 - (max(n1, n2, ...) / total shoes)))

Credit appraisal of SME units involves assessing their financial health, management capabilities, market position, and repayment capacity.

• Analyze financial statements, including balance sheets, income statements, and cash flow statements

• Evaluate management team and their experience in the industry

• Assess market position and competition

• Review credit history and repayment capacity

• Consider collateral and guarantees

• Use credit scoring models and ratios to determine creditworthiness...read more

EV/EBITDA is a valuation metric used to evaluate a company's financial performance and potential for growth.

• EV/EBITDA compares a company's enterprise value (EV) to its earnings before interest, taxes, depreciation, and amortization (EBITDA).

• It is useful for comparing companies in the same industry or sector.

• A lower EV/EBITDA ratio indicates that a company may be undervalued, while a higher ratio may indicate that a company is overvalued.

• EV/EBITDA can be used in conjunction wi...read more

If the interest rate in the market goes up

• The cost of borrowing increases

• Bond prices decrease

• Stock prices may decrease

• Inflation may decrease

• Currency may appreciate

Fill a 5X5 matrix with numbers 1-25 such that each number is average of adjacent numbers.

• Start with the center number and fill the adjacent numbers with consecutive odd numbers

• Fill the remaining numbers in a spiral pattern, using the average of adjacent numbers

• Check for edge cases and adjust the numbers accordingly

• Example: 13 12 11 10 9, 14 3 2 1 8, 15 4 center 6 7, 16 5 18 19 20, 17 22 23 24 25

The value of CDS changes based on market conditions and creditworthiness of the underlying entity.

• CDS value increases when the creditworthiness of the underlying entity deteriorates.

• CDS value decreases when the creditworthiness of the underlying entity improves.

• CDS value is also affected by market conditions such as interest rates and liquidity.

• CDS value can be used as an indicator of market sentiment towards the underlying entity.

• For example, if the CDS value of a company in...read more

I would carefully evaluate the new job offer and consider factors such as career growth, salary, benefits, and work-life balance before making a decision.

• Consider the potential for career advancement in the new job

• Compare the salary and benefits package of the new job with the current one

• Evaluate the work-life balance and job satisfaction in both positions

• Seek advice from mentors or career counselors to make an informed decision

Investment banking is a type of financial service that helps companies and governments raise capital by underwriting and selling securities.

• Investment banks act as intermediaries between issuers of securities and investors.

• They provide services such as underwriting, mergers and acquisitions, and securities trading.

• Examples of investment banks include Goldman Sachs, JPMorgan Chase, and Morgan Stanley.

Debt is money borrowed by a company or individual that must be repaid with interest. Equity is ownership in a company.

• Debt is a liability that must be paid back with interest

• Equity represents ownership in a company

• Debt holders have priority over equity holders in case of bankruptcy

• Examples of debt include loans, bonds, and mortgages

• Examples of equity include stocks and shares