Morningstar Junior Research Analyst Interview Questions and Answers

IPO stands for Initial Public Offering. It is the process by which a private company becomes a publicly-traded company by offering its shares to the public.

• IPO is a way for companies to raise capital by selling shares to the public.

• It allows private companies to become publicly traded on stock exchanges.

• During an IPO, shares are offered to institutional investors and individual investors.

• The company's valuation and sha...read more

Bonds are debt securities that are issued by companies, governments, and other organizations to raise capital.

• Government bonds: Issued by governments to finance their operations

• Corporate bonds: Issued by companies to finance their operations

• Municipal bonds: Issued by local governments to finance public projects

• Treasury bonds: Issued by the US government to finance its operations

• Junk bonds: High-risk, high-yield bonds i

Capital markets are where financial instruments such as stocks, bonds, and commodities are traded between investors and institutions.

• Capital markets are a platform for companies to raise capital by issuing stocks and bonds.

• Investors can buy and sell financial instruments in the capital markets.

• The capital markets are divided into primary and secondary markets.

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

Short term liabilities are debts or obligations that are due within a year or less.

• Short term loans

• Accounts payable

• Accrued expenses

• Current portion of long-term debt

• Unearned revenue

Depreciation, tangible and intangible assets, balance sheet, and capital budgeting are called financial terms.

• Depreciation is the decrease in value of an asset over time.

• Tangible assets are physical assets like buildings and machinery, while intangible assets are non-physical assets like patents and trademarks.

• Balance sheet is a financial statement that shows a company's assets, liabilities, and equity at a specific po...read more

Depreciation is the deduction of recorded cost of a fixed asset in a systematic manner.

• Depreciation is a method of allocating the cost of a fixed asset over its useful life.

• It is a non-cash expense that reduces the value of an asset over time.

• Depreciation can be calculated using various methods such as straight-line, declining balance, and sum-of-the-years' digits.

• For example, if a company purchases a machine for $10,0...read more

Finance is the management of money and investments.

• Finance involves managing money, investments, and financial risks.

• It includes activities such as budgeting, investing, and financial analysis.

• Examples of finance include personal finance, corporate finance, and public finance.

Fixed income securities provide a fixed return while variable income securities provide a return that fluctuates based on market conditions.

• Fixed income securities provide a fixed rate of return, such as bonds or CDs

• Variable income securities provide a return that fluctuates based on market conditions, such as stocks or mutual funds

• Fixed income securities are generally considered less risky than variable income securit...read more

Bonds are financial instruments that represent a loan made by an investor to a borrower, typically a government or corporation.

• Bonds are debt securities that pay interest over a fixed period of time.

• They are used by governments and corporations to raise capital.

• Investors who purchase bonds are essentially lending money to the issuer in exchange for regular interest payments and the return of the principal amount at mat...read more

Different types of bonds include government bonds, corporate bonds, municipal bonds, and convertible bonds.

• Government bonds are issued by national governments to finance their activities and are considered low-risk investments.

• Corporate bonds are issued by corporations to raise capital and typically offer higher yields than government bonds.

• Municipal bonds are issued by local governments to fund public projects and are...read more

NIM is the difference between interest income and interest expense on a bank's balance sheet. NII is the income generated by a bank's interest-earning assets.

• NIM is a measure of a bank's net interest income as a percentage of its interest-earning assets.

• NII is the difference between interest income and interest expense on a bank's income statement.

• NIM is affected by changes in interest rates and the composition of a ba...read more

The banking sector earns income through various sources such as interest on loans, fees and commissions, and investments.

• Interest on loans is a major source of income for banks

• Fees and commissions charged for services such as account maintenance, ATM usage, and wire transfers also contribute to income

• Investments in stocks, bonds, and other financial instruments generate income for banks

• Foreign exchange transactions and...read more