100+ Wealth Clinic Interview Questions and Answers

Financial markets are platforms where buyers and sellers trade financial assets such as stocks, bonds, currencies, and commodities.

• Stock market - where shares of publicly traded companies are bought and sold

• Bond market - where debt securities are bought and sold

• Foreign exchange market - where currencies are traded

• Commodity market - where raw materials or primary agricultural products are exchanged

A derivative is a financial instrument whose value is derived from an underlying asset or group of assets.

• Derivatives can be used for hedging, speculation, or arbitrage.

• Common types of derivatives include options, futures, forwards, and swaps.

• Derivatives allow investors to take on risk or hedge against risk in the financial markets.

• Example: A call option on a stock gives the holder the right to buy the stock at a specified price within a certain time frame.

Derivatives are financial instruments whose value is derived from an underlying asset or group of assets.

• Derivatives can be used for hedging, speculation, or arbitrage.

• Common types of derivatives include options, futures, forwards, and swaps.

• Derivatives allow investors to take on risk or hedge against risk without owning the underlying asset.

• They are often used by financial institutions, corporations, and individual investors.

• Example: A call option on a stock gives the holder...read more

Types of capital markets include primary and secondary markets, equity and debt markets, and money and capital markets.

• Primary market: where new securities are issued for the first time, such as through an IPO

• Secondary market: where existing securities are bought and sold among investors, such as stock exchanges

• Equity market: where stocks or shares of companies are traded

• Debt market: where bonds and other debt securities are bought and sold

• Money market: where short-term debt ...read more

Derivatives are financial instruments whose value is derived from an underlying asset or group of assets.

• Types of derivatives include futures, options, swaps, and forwards.

• Futures contracts obligate the buyer to purchase an asset at a specified price on a future date.

• Options give the buyer the right, but not the obligation, to buy or sell an asset at a predetermined price within a specific time period.

• Swaps involve the exchange of cash flows between two parties based on a spe...read more

EBIT is earnings before interest and taxes, while EBITA is earnings before interest, taxes, and amortization.

• EBIT excludes amortization, while EBITA includes it.

• EBITA is a more comprehensive measure of a company's profitability.

• Both EBIT and EBITA are used to assess a company's operating performance.

• Example: Company A has EBIT of $1 million and EBITA of $1.2 million due to $200,000 in amortization expenses.

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

• Trade initiation: The trade is proposed and agreed upon by both parties.

• Trade execution: The trade is carried out through a broker or trading platform.

• Trade confirmation: Both parties confirm the details of the trade.

• Trade settlement: Payment and transfer of securities are completed.

• Trade reconciliation: Any discrepancies are resolved and final records are updated.

The 3 golden rules of accounting are the rules that govern how transactions are recorded in financial statements.

• 1. The accounting equation must always balance: Assets = Liabilities + Equity

• 2. Every transaction must be recorded in at least two accounts: one account will be debited and the other credited

• 3. The accounting period assumption states that financial statements should be prepared at regular intervals, usually monthly, quarterly, or annually

Financial instruments are assets that can be traded, such as stocks, bonds, derivatives, and currencies.

• Stocks: Represent ownership in a company

• Bonds: Represent debt owed by an entity

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

• Currencies: Used for trading and investment purposes