Invesco Mutual Fund Interview Questions and Answers

The Sharpe Ratio measures risk-adjusted return by comparing the excess return of an investment to its volatility, while the Treynor Ratio measures risk-adjusted return by comparing the excess return of an investment to its systematic risk.

• Sharpe Ratio considers total risk (standard deviation) in the denominator, while Treynor Ratio considers systematic risk (beta).

• Sharpe Ratio is more suitable for evaluating diversified portfolios, while Treynor Ratio is more suitable for eva...read more

Open-ended funds allow investors to buy and sell shares at any time, while closed-ended funds have a fixed number of shares and are traded on exchanges.

• Open-ended funds issue and redeem shares based on demand from investors

• Closed-ended funds have a fixed number of shares that are bought and sold on exchanges

• Open-ended funds are priced based on the net asset value (NAV) of the underlying securities

• Closed-ended funds can trade at a premium or discount to their net asset value

• Ex...read more

Compliance refers to adhering to rules, regulations, standards, or laws set by an organization or governing body.

• Compliance involves following guidelines to ensure ethical and legal practices within a company.

• It includes meeting industry standards, laws, and regulations relevant to the business.

• Non-compliance can result in penalties, fines, or legal actions against the organization.

• Examples include adhering to data protection laws, workplace safety regulations, and financial ...read more

Call options give the holder the right to buy an asset at a specified price, while put options give the holder the right to sell an asset at a specified price.

• Call options are used when the investor believes the price of the asset will rise above the strike price before the expiration date.

• Put options are used when the investor believes the price of the asset will fall below the strike price before the expiration date.

• Options are contracts that give the holder the right, but ...read more

Callable bonds are bonds that can be redeemed by the issuer before the maturity date.

• Callable bonds give the issuer the right to call back the bond before the maturity date.

• Investors receive a premium for accepting the risk of early redemption.

• Callable bonds typically have a call schedule outlining when the issuer can call back the bond.

• Examples of callable bonds include corporate bonds and municipal bonds.

Financial services refer to the services provided by the finance industry.

• Financial services include banking, investment, insurance, and other related services.

• These services help individuals and businesses manage their money, invest in assets, and protect against financial risks.

• Examples of financial services include checking and savings accounts, credit cards, loans, stocks and bonds, and insurance policies.

• Financial services are essential for the functioning of the economy...read more

A capital market is a financial market where companies and governments can raise long-term funds.

• Capital markets facilitate the buying and selling of long-term financial instruments such as stocks, bonds, and derivatives.

• They provide a platform for companies and governments to raise funds for investment and growth.

• Investors can earn returns on their investments through dividends, interest payments, or capital gains.

• Examples of capital markets include the New York Stock Exchan...read more

A futures contract is a legal agreement to buy or sell a particular commodity or financial instrument at a predetermined price and date in the future.

• Futures contracts are traded on exchanges and are standardized in terms of quantity, quality, and delivery date.

• They are used by traders and investors to hedge against price fluctuations or to speculate on future price movements.

• Examples of futures contracts include those for commodities like oil, gold, and wheat, as well as fin...read more