10+ Interview Questions and Answers

Collateral is an asset pledged by a borrower to secure a loan. Margin call is a demand for additional collateral.

• Collateral is a form of security for lenders in case the borrower defaults on the loan.

• Types of collateral include real estate, stocks, bonds, and other assets.

• Margin call is a request for additional collateral when the value of the collateral falls below a certain level.

• Margin call is common in margin trading, where investors borrow money to buy securities.

• If the ...read more

To stop and start JVMs in a WAS backend, use administrative console or scripting. Best practice is to perform rolling restarts.

• Use administrative console to stop and start JVMs individually or in a cluster

• Use scripting (such as wsadmin) for automation and bulk operations

• Perform rolling restarts to minimize downtime and ensure high availability

• Monitor JVM health and performance before and after restarts

AML stands for Anti-Money Laundering. It is a process designed to prevent criminals from disguising illegally obtained funds as legitimate income.

• AML involves implementing policies and procedures to detect and prevent money laundering activities.

• The process includes customer due diligence, monitoring transactions, and reporting suspicious activities to regulatory authorities.

• Examples of AML measures include verifying customer identities, conducting risk assessments, and train...read more

Duration and convexity are measures used in fixed income investing to assess the sensitivity of bond prices to changes in interest rates.

• Duration measures the sensitivity of a bond's price to changes in interest rates. It is a weighted average of the times until each cash flow is received, with weights proportional to the present value of the cash flow.

• Convexity measures the curvature of the price-yield relationship of a bond. It provides additional information about the bond...read more

I would assess the risk triggers, analyze the potential impact, develop a mitigation plan, and communicate with stakeholders.

• Assess the nature and severity of the risk triggers

• Analyze the potential impact on the project or organization

• Develop a mitigation plan to address the identified risks

• Communicate with stakeholders to keep them informed and involved in the risk management process

Script to delete files older than 7 days in a Linux VM

• Use the find command to locate files older than 7 days

• Pipe the output of find to the rm command to delete the files

• Make sure to test the script in a safe environment before running it on important files

Paying a fixed amount does not determine if you are long or short risk.

• Paying a fixed amount does not indicate the direction of the risk.

• Being long or short risk depends on the specific investment or position taken.

• For example, buying a stock is considered long risk, while short selling a stock is short risk.

Bootstrapping is a statistical technique for estimating the sampling distribution of a statistic by resampling with replacement.

• Bootstrapping involves repeatedly sampling with replacement from the original data set to create multiple 'bootstrap samples'.

• The curve in bootstrapping is built by plotting the distribution of the statistic of interest from the bootstrap samples.

• It helps in estimating the variability and uncertainty of a statistic without making assumptions about th...read more

Building a DCF model involves projecting future cash flows, determining the discount rate, and calculating the present value.

• Start by forecasting the company's future cash flows.

• Estimate the discount rate, typically using the weighted average cost of capital (WACC).

• Calculate the present value of each projected cash flow by discounting it using the discount rate.

• Sum up the present values of all projected cash flows to obtain the intrinsic value of the company.

• Perform sensitivi...read more

Instruments of capital market are tools used for raising capital and trading financial securities.

• Stocks: Represent ownership in a company and can be bought and sold on stock exchanges.

• Bonds: Debt securities issued by governments or corporations to raise capital.

• Mutual Funds: Pooled funds from multiple investors to invest in a diversified portfolio of securities.

• Derivatives: Financial contracts whose value is derived from an underlying asset.

• ETFs (Exchange-Traded Funds): Inve...read more

Enterprise value is a measure of a company's total value, including its market capitalization, debt, and cash.

• Enterprise value represents the theoretical takeover price of a company.

• It is calculated by adding market capitalization, debt, and minority interest, and subtracting cash and cash equivalents.

• Enterprise value is often used in financial analysis to compare companies of different sizes and capital structures.

• For example, if a company has a market capitalization of $1 b...read more

A CDS is valued based on its credit spread, risk-free rate, and time to maturity.

• The value of a CDS is determined by the credit spread, which represents the difference in interest rates between the CDS and a risk-free bond.

• The risk-free rate is also a factor in valuing a CDS, as it represents the opportunity cost of investing in a risk-free asset instead of the CDS.

• The time to maturity of the CDS is another important factor, as it affects the likelihood of default and the pot...read more

Lifecycle of a trade involves several stages from initiation to settlement.

• Trade initiation by the buyer and seller

• Negotiation of terms and price

• Execution of the trade

• Clearing and settlement of the trade

• Post-trade activities such as reporting and reconciliation

Derivatives are financial instruments whose value is derived from an underlying asset or security.

• There are four main types of derivatives: futures, forwards, options, and swaps.

• Futures and forwards are contracts that obligate the buyer to purchase an asset at a specific price and time in the future.

• Options give the buyer the right, but not the obligation, to buy or sell an asset at a specific price and time in the future.

• Swaps are agreements between two parties to exchange c...read more

Understanding regulatory requirements in different countries is crucial for compliance and success in global markets.

• Research and stay updated on regulatory frameworks in target countries

• Understand differences in regulations related to data privacy, product safety, labeling, etc.

• Consider cultural and political factors that may influence regulatory decisions

• Work closely with legal and compliance teams to ensure adherence to regulations

• Examples: GDPR in EU, FDA regulations in t...read more

KYC process involves verifying the identity of customers to prevent fraud and money laundering.

• KYC stands for Know Your Customer

• It involves collecting personal information from customers such as ID, address, and financial information

• Verification can be done through documents, in-person verification, or electronic verification

• KYC helps financial institutions comply with regulations and prevent illegal activities

Entities can be classified into different types based on their characteristics and functions.

• Entities can be classified as individuals, organizations, or groups.

• Individual entities refer to specific persons or objects.

• Organizational entities refer to companies, institutions, or agencies.

• Group entities refer to collections of individuals with a common purpose or characteristic.

• Examples include individuals like John Doe, organizations like Apple Inc., and groups like the local ...read more