Global Automation Financial Analyst Interview Questions and Answers

A bond is a debt investment where an investor loans money to an entity which borrows the funds for a defined period at a fixed interest rate.

• Bonds are issued by governments, municipalities, corporations, and other entities to raise capital.

• Types of bonds include government bonds, corporate bonds, municipal bonds, and convertible bonds.

• Government bonds are issued by national governments and are considered low-risk inves...read more

Options are financial instruments that give the holder the right, but not the obligation, to buy or sell an asset at a specified price before or on a specified date.

• Options can be used for hedging, speculation, or generating income.

• There are two types of options: call options (which give the holder the right to buy an asset) and put options (which give the holder the right to sell an asset).

• Options have an expiration d...read more

Options Greeks are a set of risk measures that help traders understand the sensitivity of an option's price to various factors.

• Options Greeks include Delta, Gamma, Theta, Vega, and Rho.

• Delta measures the change in the option price for a $1 change in the underlying asset price.

• Gamma measures the rate of change of Delta.

• Theta measures the change in the option price with the passage of time.

• Vega measures the sensitivity o...read more

Dividend is a distribution of a portion of a company's earnings to its shareholders.

• Dividends are typically paid in cash or additional shares of stock.

• Journal entry for cash dividend: Debit Retained Earnings, Credit Dividends Payable.

• Journal entry for stock dividend: Debit Retained Earnings, Credit Common Stock or Paid-in Capital.

• Dividends reduce the company's retained earnings and are recorded on the balance sheet.

• Div...read more

Accrued income and expenses are revenues and expenses that have been earned or incurred, but not yet received or paid.

• Accrued income is revenue that has been earned but not yet received. It is recorded as a debit to an asset account and a credit to a revenue account.

• Accrued expenses are expenses that have been incurred but not yet paid. They are recorded as a debit to an expense account and a credit to a liability acco...read more